The Era of Contextual Shopping

Digital technologies are transforming the way we shop. E-commerce and smartphones have raised the expectation consumers have about their shopping experience. One of those expectations is around personalization. Amazon knows what brands I buy, what type of product I’m searching for, what special events I have in my life, what types of new products I might find interesting, and many other things. This allows Amazon to create a very personalized experience for me as a shopper. Product recommendations and deals often resonate very well with me, and encourage me to make a purchase.

Until recently, this type of personalization could only be expected in the e-commerce channel.  But, as technology evolves, and smartphones continue to saturate the market, even the physical venue is becoming more of a digital shopping experience. Shoppers use this technology to find the right product, at the right price, at the right time. This has lead to the showrooming phenomenon that has been a concern for physical retailers everywhere.

But new technology is emerging that will enable the physical retailer to turn the smartphone from foe to friend. This technology is called iBeacon. It is essentially a very small device that allows physical products in the store, to speak to the consumer through their smartphone, based on proximity. The capability is built in to the majority of iPhones in the market today, and is now being deployed by many retailers in an effort to turn the in store shopping experience to one just as personalized as provided by Amazon.

Retailers such as Walgreens, Macy’s, American Eagle, and of course Apple, are piloting or rolling out the technology today. The essence of these pilots are creating a very custom shopping experience through mobile apps. A consumer can create a profile on the mobile app, and then as they walk through one of these retailer’s stores, they will get notified of potential products they might be interested in, or given promotions and incentives to buy products they have previously expressed an interest in.

For example, if I create my profile, and add a pair of jeans to my wishlist, when I am near, or in the retailers store, I might get a notification that the jeans I want are 30% off today. This of course brings me into the store, and encourages to make a purchase. I may also get a notification that there is a sale on belts, which might be a good accessory for the jeans I purchased the previous week.

In the words of industry expert, and shopper extraordinaire, Tasha Wiehe:

 “I spend lots of time tracking price and location of specific items that I want.  If I were notified that I was walking by the perfect white summer dress, and it was on sale to-boot!…my closet would be full of them.”

There are challenges that remain of course. The ability for a shopper’s profile to be “portable” across retailers, for example. Another is the amount of product information that manufacturers and retailers will be required to aggregate, manage, and distribute. Today much of that data is locked in silos within those organizations, and not in a format, or readily accessible, by the systems enable technology like iBeacons.

These challenges are not insurmountable, and are being addressed by the industry as I type. One thing is certain, iBeacons are yet another example of how retailers can use the technology that has brought them great concern in the past half a decade, to a technology that can allow them to differentiate, and provide more value to consumers.

About Ken Sickles

VP of Global Product & Strategy - "Crafting a better world with technology."

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