Mobile technology - Influencing customer shopping behaviour via physical location tracking emerges

For the last few years industry analysts and experts have been declaring that the future is mobile and that using this channel for shopping will soon be the most popular method used by online consumers. While this may not yet be fully realised, there is an emergence of a different use of mobile technology which will offer retailers another way to influence their customers' shopping behaviour - and it's all about tracking their physical locations. 

Technically, how can this be done?

On this evening's commute, I may be sat opposite someone with a very desirable briefcase from a well known brand. I decide that I want one so I take out my mobile phone, go to that particular retailer's website and find the bag I want. At this point I see the price and realise that as payday is a while away I will come back to this purchase at a later date, so I add the item to my wish list or my basket. A few weeks later I visit a large shopping centre during a busy Saturday afternoon, when I receive a message on my phone stating that the briefcase I saw a few weeks ago is nearby and I have been given a promotional code that will give me 15% off the current retail price.

As the message has the store location, I go and make the purchase. This may sound like a straightforward shopping journey that just happens to be spread over a period of a few weeks, however there is a lot more going on in the background that creates this experience and the control is fully in the hands of the retailer's merchandising team.

In this instance, a number of events and triggers are occurring across both the website and mobile device which provides a personalised and segmented experience. An online merchandiser can thus create a customer segment to target and customers can be added to this dynamically. For example, a merchandiser could create a rule which states "when a customer has added a product to their wish list and is browsing on their mobile phone, add them to a group called 'nearly bought on mobile' group". Along with adding them to this group, an identifier for that mobile device can also be stored. A merchandiser can then setup certain rules based on the proximity of that customer to known stores or concessions where their products are sold. The rule could state that should this customer be within a set distance of certain stores, a message should be sent along with a discount code, to prompt the consumer to buy.

How can retailers understand their influence over customer behaviour and how does this effect the purchases of those customers?

In the current climate of primetime television sponsorships, there are a number of large brands who have their name attached to the latest reality or entertainment programmes as an official sponsor. A sponsor will tend to have a number of advertisements for specific items as part of its deal during peak viewing times. These  sponsorship deals can cost retailers in excess of seven-figure sums, but many are unsure of exactly what effect these advertisements are having on their sales and what the correlation is between a customer viewing them and making an actual purchase.

This is now possible using a different technique to that of the mobile phone network: using the mobile handset's microphone.

For the sake of this example, let's assume that a particular grocery retailer is sponsoring a programme and each week they have a campaign that targets a certain category of products they are advertising. Let's also assume that the retailer in question has a loyalty program and a mobile app that allows customers to view their points and redeem coupons.

A customer settles in for a Saturday night to tune into their current favourite programme.  During the ad break the grocery retailer's advertisement for frozen pizzas is shown. At the same time as the images, voiceover and music are shown, there is also a specific message being transmitted via the speaker of the television. This message is not audible to the human ear, however, this sound, which may only last 2 or 3 seconds, will be picked up by the microphone of the customer's mobile phone. Unbeknownst to the customer, the mobile app is listening and acknowledges it has heard this message, by storing an internal flag of the message which the phone has been set to recognise.

A few days later the customer enters a store of the grocery retailer in question. As part of their shopping trip, they pass by the frozen pizza aisle. Just above this aisle is a speaker that is omitting a sound similar to that sent by the television advert. At this point the mobile app again recognises this message and acknowledges that it has heard this message.

At the checkout, the customer uses their loyalty card to pay and then leaves the store. The grocery retailer now has data that correlates to when the customer may have heard an advertisement, where they may have visited an actual store and thus can position where this item was sold. With this data, the grocery retailer can understand more about its customers' shopping behaviour. It can show the retailer how its customers walk around their store and what products or offers they are attracted to. This therefore allows the retailer to target them with specific offers  and campaigns.

Today's pioneering retailers now have the ability to merge the distinct and separate behaviours of the online digital and offline "bricks and mortar" customer behaviour

Of course all of these examples presume that the retailer has the correct technology and capability in place to allow such scenarios to happen, and there is an emerging set of retailers and technology vendors who are starting to use this today. However, there is another barrier to all of this which will also start to worry the more savvy customer - privacy.

There has been a lot of press over the past year related to the EU Cookie Directive and this has brought the online privacy issue to the forefront for the less experienced online shopper. The crossover of these online and offline worlds creates a different challenge to privacy advocates and retailers who are harnessing this for merchandising purposes.

The application of these technologies and the shopping channel data sets they can provide, can give pioneering retailers the ability to merge the (up until now) distinct and separate behaviours of the online digital and offline "bricks and mortar" customer behaviours. This will hopefully get retailers that one step closer to the dream of achieving the Holy Grail of the 'single customer view'.

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