Peter Jones Head of Marketing, Digital Solutions Information Systems Group, Hitachi Europe Ltd.
Peter Jones explains how digital technology is transforming retail, while at the same time empowering consumers.
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Read the transcript of Peter Jones interview on how digital technology is being applied to retail.Show transcript
Anna Delaney (interviewer)
Can we move on to smart retail now? It’s obvious that more people are doing their shopping online. But how can we entice people back onto the high street?
Peter Jones, Hitachi Europe
It’s a very good question. I mean, if we think about what the online retailers are doing. They know an awful lot about your shopping habits. They know what you looked at and how long you looked at it for, whether you looked at the reviews for that product, how many reviews you read, whether in the end you bought or not, which site you went to after you left their site. So we have a lot of information about behaviour. One of the challenges with bricks and mortar is that people will want to go there and look at product, then go away and buy online, because perhaps they get cheaper, more quickly, the size they want, the colour they want.
Retailers have the challenge of how to respond in a better way to the needs of the people using their facilities. How to respond better, it means they have to have better data about what people are doing. They have to have a better way of enticing people in the environment to come and look. In the retail world, we’re doing a lot of work with new kinds of sensors. So we’re working with a 3D laser diode technology which allows retailers to set IoT sensors in strategic places, either in the shopping mall, in the doorway of the store, inside the store.
And what these sensors allow the retailers to do is to collect real data, statistics about what’s really going on. It means how many of people come in at what times, which route you go through in the store, which products they look at, what they pick up, what goes in their basket, what they put down. It allows retailers to have a more one-to-one experience with the customer, because the retailers want to have some direct marketing.
It is difficult to be targeting smart phones with adverts and so on, because people are getting fed up with being targeted. However, if you go to a store and you want to buy a product. It could be a watch. It could be DIY. It could be skin care products. Maybe you’re just browsing. You want to see what’s going on. You have some idea. If retailers are able to equip you more easily with the real information that you want to know about that product, perhaps there’s a better way to convert you to be their customer.
So what this means is bringing together sensor technology which can detect what you look at in the store, how long you look at it for. Without touching, the retailer’s system would know you’re looking, but you haven’t touched. The system could automatically put up a video onto a screen in front that starts talking or showing the product. So you have a way of uniquely engaging one-to-one marketing with the customer. So I think retailers need more data of what’s going on in their bricks and mortar establishments. So what we do is we provide tools on the data and analytics engines to allow them to do that.
And what sort of retailer would benefit most from that kind of technology?
Imagine many kinds of retailers. It could be a chemist, a chemist chain. You have products for well-being and so on. It could be any retailer who wants to know. I’m launching some promotions. I want to know whether those promotions are effective, which stores are seeing the big success rates from that promotion. Am I doing my geopositioning of those offers correctly? Should I be doing things differently, in different locations, at different times of the day? And really you can’t decide those things unless you have data. So you need to have the data that backs up really what’s going on.
So of course, you have to get the people to come in the first place. I think we’re going to see far more digital signage on the streets, on the shop fronts, funky things that are going to get people to come and look and see what’s going on. Again, if we’re using IoT sensors, we can ascertain how successful we are in converting people who walk past the store storefront to actually come in and take a look. We start to build those analytics that let us see those kind of conversion rates.
And then if we’re able to link that to the POS data, which talks about what people buy and how they pay, we start to get some great insight into conversion from outside the store, to looking at products, to actually what gets bought.
You mentioned geotargeting just now. And so I’m interested to know more about the marketing opportunities for the smart technology, geotargeting, geofencing, can you talk more about that?
Sure. I think that there’s two sides to geotargeting. There’s one side is really looking at how people are responding and behaving. And one good way of doing that is by looking at social media data. So there’s an awful lot of marketing that goes on now via the main social media sites, the websites where people are spending all their hours each day looking at stuff. So if retailers can tap into that rich source of data and start to see what people are thinking about and use that data from a geoperspective, so for example, if we can work out that certain kinds of tweets that say certain things about our offer or our new product launch are coming from a certain place, we start to work out the sentiment of the people and how they react to that. So really one side of the geofencing question is how people react.
On the other side is what we offer to who and where. If the retailers can blend this data– so it means using tools which tap in social media to see what’s going on and see what is happening and almost in real time work out actually, we’re seeing that people are buying this from these kind of stores. We have a competing product. If we can do some promotion on that, perhaps we’ll get them to come into our store. They could almost in pseudo real time start showing some videos of their product launch or their competing products in their stores in that area to entice people in. So you would start to see some really reactive things.
IoT and big data analytics allows you to do that. If you have the data, you can decide how to act on that data. So it’s all about knowing what’s going on and reacting to that. If we think about these two sides, we can both decide what to show and promote and look at how it’s going down, how it’s going down on social media.
And are there examples of this already put in place?
There are examples of retailers now starting on this journey because this is quite new, really. Trying to work with the retailers on both angles on what people are thinking and what we can push to them is really quite new. So we’re working with a number of retailers who are looking to do some of these things. But it’s kind of a step-by-step process. So the retailers are interested in seeing really does it really work, this technology? Can I really get that kind of information?
So they start off at the beginning by saying to us, we’d like to have some kind dashboard from you that really shows us that what you’re saying is true. We want to see are you able to show where the people go within the store? Are you able to show how they move in the store? Where they stop? Where they spend time?
So I think to say to you: it’s happening is a one off. It’s not true. It’s going step-by-step. And at the moment, retailers are not good at knowing where people go, whether they go past the door, if they stop for some reason and come in, why. They don’t know that kind of information. So if they’re able to build that data and analyse that data on a regular basis and if they have, let’s say 5 or 10 metrics that they say are important, and start to use those 5 or 10 metrics as a set of levers to work the business, then you start to see we can see some quite interesting changes happening.
The benefits seem obvious. But for the consumer who is perhaps not happy with being monitored all the time, how do you make sure that they’re not suffocated by it and it’s an easy experience for them?
Well, I think one of the key challenges is when you sign up to online marketing, you get continued push to your smartphone. I think in the end people start to fed up with that. So when I talk to you about my IoT sensor, I’m talking about privacy compliant tools, which don’t expose people’s faces or gender. It’s really collecting data about how people behave in the store to try to give them more information that can help them.
If I pick up a skincare product and I want to find out about it and I’m standing reading, it’s quite nice if a video comes up and shows me something about my product, how it’s being used, what the USPs are, why I should use that. If I’m not interested, I’ll just walk away. I won’t look and walk away. So really if I’m really interested, then I could stand and watch and perhaps think, oh, yeah, that’s for me. And I’ll buy it.
I think we have to be less intrusive than the kind of constant pushing of adverts to phones, because in the end people get fed up with that. So it has to be a subtle approach to providing the right amount of information. So the retailers can’t provide that unless they have data flow. So how to collect that data in a way which isn’t intrusive, that’s the challenge. And in the end, if you don’t like being marketed to in such a direct way, you walk out of the store. And the retailer learns very quickly, actually that’s not interesting.
But kind of discussions we’re having with them show that this kind of unobtrusive more subtle approach than pushing adverts directly is something they’re very interested in exploring. And that’s a real cross section of retailers from health care, through to telecoms companies wanting to learn how to push their communications products, through to stadiums who want to have better experiences for their customers, through to events management companies who want to make sure events run smoothly. So there’s a real cross section of the kinds of organisations who want to use that tech.
If you think about how we can link together these technologies, not just by retail perspective, but going back to the kind of smart city perspective and thinking about how to make experience better for the people. If we think about the tourism case, we all have experience of going for a weekend to a place like Rome where there’s lots of nice attractions. But we find we get there and it’s too busy. It’s a huge queue outside St. Peter’s or the Vatican. How long do we stay for? When should we come back?
If we’re able to collect together data for the city that allows them to build a picture of what’s going on, it means we can start to give that information through some kind of tourist app to people, which makes their whole experience better. If they know there’s a two hour queue, they go somewhere else. So we can start to build a picture based on the real events and real data of what fits for the people. So we’re starting to kill several birds with one stone, as well.
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