Business Technology

5 ways smartphones will change your retail business forever – just look at Ted Baker

8 min read

14 April 2015

It’s fair to say that smartphone apps have completely underwhelmed the retail sector, unless you're Ted Baker. But that is going to change significantly in the next few years, with the introduction of a simple technology that changes the game: Beacons, sometimes known as iBeacons, that enable ultra-precise proximity marketing.

Fashion brand Ted Baker is just one company that understands proximity is no mere trend but here to stay. Using beacons in its Westfield London store, its app can now be ‘woken up’ when you are near or in-store.

On the simplest level, this engagement can be a voucher or other discount incentive to spend right away. But knowing exactly where a shopper is in-store opens up a wealth of other functions that will mean their favourite device, the smartphone, will almost certainly be the retail brand’s main communications channel going forward.

1. They want to pay, not queue

Very soon, the retail customer is going to expect to be able to pay for any item anywhere in-store. Mobile payments systems are not limited to just PayPal or WorldPay, and retailers can now deploy their own solution and link it to stock inventory control.

They could even use beacons as security devices – beacon ‘stickers’ are now small enough to be embedded in packaging – sending an alert when an item leaves the store that hasn’t been paid for. Unlike RFID tags, beacons can also be followed and tracked out of store, although there are complications.

Read more on how mobile is changing business:

2. They want to be inspired

A survey by leading ad agency McCann revealed that 66 per cent of consumers want to be inspired, whilst they are shopping. For a fashion brand like Ted Baker, the possibilities are almost endless: What’s trending in-store today, virtual catwalks, invitations to special events, all triggered by being in proximity to a particular dress or piece by a designer.

Proximity can also be a very powerful tool when combined with preferences. If you know a user has a preference for a particular designer or, moving away from fashion for wider examples, a type of cuisine in a food retailer, or film genre in a cinema, you can pull them towards an exact aisle or department.

In the cinema example, beacons and other proximity technology can be used in a shopping centre to inspire a film session at the optimum time during a shopping visit, once you know what the optimum time for delivering that message is, either on an individual user basis or generally.

Continue reading on page two to understand the data, relationship, and why you should think about the experience as though you’re Nike and not Sports Direct.

3. You want the data

Which brings us to the most significant way smartphones and the new breed of proximity enabled apps are going to change the game for retailers: data.

Huge amounts of data based on shopper’s movement patterns, dwell times, hot and cold spots and more are going to be combined with other known data, as simple as time of day or as complex as an individual’s purchase history, to create ever-more efficient ways to retail.

This will have a huge impact on store layout and design, staffing and even stock levels as retailers can watch in real time the impact shop-floor placement can have on shopper behaviour. But that doesn’t really even begin to scratch the surface, unlike preference data, which really is the holy grail of this new genre, in-store digital retailing.

Data fuels relevance. We don’t want to bombard our visitor with a series of useful but ultimately generic messages. The customer would, however, be open to knowing exactly where the designer handbag that they have looked at five times online but not yet purchased is located in-store. Especially if that message also came with an incentive to purchase the item today.

4. You can create a relationship

The more skilled marketers are now seeing that mobile’s promise of a more intimate relationship with the consumer is finally possible. And as we’ve seen here, the relationship has the possibility to become much richer than simply giving away revenue in the form of offers.

Location-aware apps will help deliver that connection. Knowing that a user has been in store but failed to purchase – the visitor hasn’t dwelt near the tills nor purchased through the app – doesn’t mean the relationship has ended. The final beacon by the door can be linked to the store’s loyalty programme, earning the customer rewards simply for having visited. Consumers will prefer shops that do this sort of activity to those that don’t.

5. You’re going to deliver ‘the experience’

Faced with ever increasing costs and falling footfall, high street stores have suffered at the hands of digital retailers and even their own websites. But that is set to swing back in the store’s favour as shops become experiences. By experiences I mean Nike Town, not Sports Direct and the difference in average spend per visitor.

Store experiences will become ever-more interactive, for example the ability to see what favourite shows look like on the store’s demo TV screens, via a favourite video-on-demand app. Help can be summoned only when needed, not awkwardly dismissed with a ‘just looking.’

Omnichannel is going to become a true reality, with click-n-collect being joined by tap-n-go where the customer pays via the app, selecting a delivery time to their saved address. Offline and online will be merged into something new that doesn’t even have a name yet: In-store-but-using-your-app-on-my-phone-line?

We may even see a nullifying of the dreaded ‘showrooming’ phenomenon as stores understand what product the consumer is looking at and compete against the online options with an incentive to purchase there-and-then.

Whilst all this digital activity threatens to swamp us and will undoubtedly be challenging for some retailers to deliver, it ultimately is there to create a much better experience for the consumer. And that will lead to more rewards for the retailer.

Ian Malone is the CEO of proximity marketing platform Airspace. A white paper on how the fashion industry will be using proximity marketing networks has just been published at http://airspace.cc/research