Monthly Archives: July 2012
“If we wanted to figure out if a customer is pregnant, even if she didn’t want us to know, can you do that?”
This was the question posted to Target statistician Andrew Pole, as recounted in the New York Times article “How companies learn your secrets”. New parents have always been a boon for “one-stop” retailers like Target, as this life-change offers a small opportunity to alter engrained buying habits. “Coming in for diapers? Might as well pick up some supper too.” The competition for new parents’ attention is so fierce that Target wanted to get a jump on their competition and begin their marketing efforts before baby was even born.
And Pole delivered. He analyzed women’s purchase history and identified 25 products (pre-natal vitamins, maternity wear, etc.) that when considered together, generated a “pregnancy prediction score”. This allowed him to estimate who was a mommy-to-be, and approximately when she was due. Target then created custom “mommy-themed” flyers and coupons, disguised as regular flyers, and sent them specifically to these women, who were unaware of their data-gleaned origins.
And Target is not the only retailer doing this. As the article explains, “Almost every major retailer, from grocery chains to investment banks to the U.S. Postal Service, has a “predictive analytics” department devoted to understanding not just consumers’ shopping habits but also their personal habits, so as to more efficiently market to them.”
Does this story give you pause? Or does the prospect of a tailored-deal excite you? Either way, just wait. Those predictive analytics departments are about to get a whole lot more in-your-face thanks to mobile wallets.
The internet has been awash with talk of mobile wallets. (For the uninitiated, Jen’s post ‘The Next Step’ provides a great introduction). People are quick to talk about their convenience, the “coolness” of the technology, their lighter pockets. But less often do they mention the real reason for their existence; marketing.
A few weeks ago, I read an article that explained how RBC is poised to be the first Canadian bank to offer mobile wallets, possibly as a soon as October. Interestingly, this article also spoke at great length of the marketing advantages of the technology.
Retailers will now be able to collect purchase-data more easily than ever before, tailoring promotions to specific consumers. Combine this with your smartphone’s location-aware technology and retailers can now text you their latest flyer when you are near their store. Or alert you of their lunch special.
There are obvious advantages for both merchants and consumers alike, and it might be nice to walk into your favourite store and be provided with a list of on-sale items, or a coupon. We won’t know how this latest evolution of analytics will play out, but one thing’s for sure – we’ll all be watching. Oh, and so will they.
Do you think predictive analytics improve the retailer/customer dynamic? Or, are they an invasion of privacy?
For several months, I found myself suffering from an almighty headache almost every morning. It was generally accompanied by dizziness and a feeling of exhaustion. I genuinely thought I was coming down with something pretty serious. My diet hadn’t changed. My sleeping habits remained the same. I didn’t think I was experiencing any additional stresses at the office.
And yet – every morning – there it was. Within fifteen minutes of arising, I had this awful feeling, sometimes coupled with nausea. I changed to decaf. I ate right away. Nothing. It was still there. I woke up feeling great, but within fifteen minutes I felt like a small mallet was just striking at the back of my head. It lasted for about three hours, which presented a challenge to the rest of my day.
And then my eureka moment; I changed my morning routine by accident.
On one morning, upon waking, I made my coffee, then reached for my smartphone to check the 3,000 emails that I would go through. For the first time in a long time, I left it in my car. Not a problem. I opened up my laptop and flew through my messages, drank my coffee, read the news, ironed, showered, dressed, packed a lunch, hopped in the car and then started my trek to the… whoa. I felt great.
It became reasonably evident that I had no long-term disease for which I would need extended, intense treatment. I was just giving myself an iGraine every morning.
Yes. An iGraine.
My standard routine consisted of waking up, putting coffee on, then roaming through my abode with my head dangling completely off my neck, staring at my phone. It was to the point where my chest was getting a chinprint on it.
Was I spending the first fifteen minutes of every morning giving myself a staggeringly effective stress headache through neck strain while cutting blood-flow to by brain? It seemed like a possibility, especially in light of the fact that the one morning I didn’t have any symptoms was the one morning I didn’t have my phone.
So on day two; skip the smartphone check again. Day two; symptom free again. Same thing on day three. And day four. And so on.
There have been thousands of studies on neck strain as a cause of headaches and exhaustion. There have been even more studies on the lack of circulation to the brain causing both. What I don’t know is if there has ever been a study on intense smart phone use (and head position) as it relates to these things.
If you find yourself suffering almost daily from a morning of exhaustion and a headache, I beg you to try this one small lifestyle change. Lift your head up, or – better yet – keep your phone in the car. The difference in my life has been astounding without a morning iGraine.
Do you find yourself suffering from exhaustion and headaches in the morning?
Our very first blog post “Get it in their hands: the power of demonstration” was written by Meagan, detailing her experience of buying a new camera. She told us all how it wasn’t until she had the camera in her hands that she knew it would be the one for her. Ever since that post, I’ve actually put thought into why I buy the things that I buy. If Meagan shops based on the feeling of holding that item in her hand and trying it out, what is it that drives me to the cash register?
It wasn’t until two months ago that I knew the answer. I went to a yearly sale at a well-known Nova Scotia yarn store, and as I was wandering through the rows of yarn and wool and books and people, I realized that for me, it’s all about appearances. I would pick up the yarn and get a sense of the weight, the texture, the comfort-level. But it wasn’t that overall need to touch that drove me to a particular aisle. It was the appearance. The décor. The display. It was only when I was attracted by the look of the aisle that I would actually walk down it and pay any attention to the wares that it held.
I’m well aware that I’m a very visual person, but I never really stopped before to think about how that particular trait has influenced my life outside of school and work. Now that I’ve put two-and-two together, I can see how my shopping habits are influenced by the visual cues that I get from the stores that I walk into.
All of my favourite stores – from clothing boutiques, to book stores and craft nooks – have very distinct similarities. They’re all laid out in a way that is very organized and easy to navigate; nothing crowded or hard to walk through. They’re all bright and well-light, and I get a feeling of comfort as soon as I walk through the door, like it’s a safe environment to spend time in. There are a lot of clean lines and displays are put together with a lot of care and thought. And there’s colour. So much colour. No matter which direction I’m facing, there’s something for me to look that invites me to take a closer look. I have a hard time walking out of these stores without buying something, even when there’s nothing that I went in to buy, just because I felt like I should make a purchase.
Now at this point in the post, you’re wondering what this has to do with you. So I like to judge stores by their cover. What does this matter to everyone reading this?
Most people probably don’t care why I buy the things that I buy. But a retail store owner trying to get my business is going to have to put a lot of thought into what she or he can do to get my attention. And now, all of a sudden, I’m starting to feel bad for that store owner. Now they not only need to appeal to me and my visual signals, but also to Meagan, the kinaesthetic shopper. And what about people who take in information through auditory cues? Now your store needs to be visually appealing, people need to want to pick up your wares, and you need good tunes to listen to. What happened to the good old days when you put an item on a shelf and if someone wanted to buy it they did, and if they didn’t they moved along? Now, with so many other stores in the mall, you need to put a lot of extra effort to get my sale, and Meagan’s sale, and everyone else’s. Retail has always had an element of competition. Now it’s just a competition for attention.
How do you appeal to different types of shoppers? What influences you to make a purchase?
Who doesn’t like a sale? I know I do! But did you know that not all sales are created equal (even when they are)? When it comes to sales, it turns out it’s more about perception than reality.
Last week, the Economist featured an interesting article which recounted the results of a University of Minnesota study on discounting. And because game-show-esque examples are more fun than regurgitating conclusions from a journal, it’s time to play:
Hmm. This is a tough one. Did you pick A? Most of the study participants did.
Unfortunately you have been misled, dear reader. The answer is…..
Both are equivalent deals.
This has interesting implications for retailers. If you are going to put a product on sale, science has clearly demonstrated that customers strongly prefer getting more of something for free, rather than saving money on a single item. In the study, the researchers sold 73% more of their product using the “more free” strategy.
Don’t fret if you got it wrong because you have a chance to redeem yourself in round 2. It’s once again time to play:
So what do you think this time? Are these deals the same? Most of the study’s participants thought so. (They both reference 33% after all…)
Nope. In this case, B is by far the better deal.
In the first example, we saw that customers prefer getting more of something rather than saving money on a single item. In this case, we see the same behaviour again, even when they would have saved a lot more money by choosing B.
As a retailer, you would actually stand to make more profit by offering a bit more of something for free, rather than offering a steep discount. Customers generally view the deals the same, so you might as well offer the one that is more profitable for you.
Okay, time for round three. You’ve got one last shot to redeem yourself. It’s time to play:
Now this is something I see all the time when I’m shopping. A previously discounted item has an additional discount applied to it.
What’s the better deal? The study’s participants thought A was…
And if you did too…you’d be 0/3.
Yes, they are equivalent deals!
As a retailer, this is good to know. Multiple discounts applied to the same product seem like better value, even though the cost to you is the same as one larger discount.
So why is this the case? Are we all that bad at math?
Basically…yes. And when reason goes out the window, it seems we rely on other less-reliable clues (i.e. more is always better).
Knowing these tricks could make the difference between a successful sale, and a not-so-successful one. It also offers a sneaky opportunity to compete with other retailers. Is your competitor discounting their widgets this weekend? Offer the same deal, but instead offer an equivalent amount of free bonus products and you’ll be stealing their customers in no time.
So remember, when you’re planning a sale, customers always want to feel like they got “more” for their money, even if they really got less. But don’t worry; they’ll thank you for it.
Have you used any of these pricing strategies? What has worked in your store?
In the next few years, augmented reality (AR) is poised to take over retail. For the uninitiated, AR uses computer-generated sensory input to alter your perception of the world in real-time. Already we are seeing its potential being harnessed in all areas of retail, including in-store, online, and through advertising.
In-store Customer Experience
Retailers have introduced AR in-store in an attempt to improve the customer experience.
Starbucks Holiday Cups
In 2011, Starbucks introduced their entertainment-focused “Holiday Cups” campaign. After downloading an app, customers could use their smart phone to make their coffee cups come alive.
AR’s in-store usefulness goes beyond entertainment. Intel has developed an AR digital display, which has interesting implications for retailers. Installed at the store entrance, the 7ft transparent display shows customers a digital floorplan and recommends products after assessing their gender. Product location is superimposed on the screen, and products can be placed on hold and brought to the cash register for payment. The aim of the technology is to help customers shop more quickly and easily.
Traditionally, the problem with online shopping has been that you can’t truly get a sense of a product from a 2 dimensional image. With AR, customers are now able to hold products in their hand, and try them on virtually.
Tesco online shopping
Tesco has already made AR a large part of their online-shopping experience. Customers select a product online, and then print a copy of the AR marker. Holding the marker to their webcam, it is transformed into a 3d model of the product. As the customer turns the marker, the 3d image rotates on screen as well. In the video below, a customer views a TV, and is able to see the ports on the back of the unit as she turns the AR marker.
Holition’s AR is as luxurious as the products it promotes. Designed for high-end products, their AR experience allows customers to virtually “try on” jewelry and watches. Holition is also working on expanding their AR so that customers can smell, hear, and feel products.
Bodymetrics Virtual dressing room
Unsurprisingly, 50% of garments bought online are returned. But what if you knew how those jeans would fit before you place your order? Bodymetrics’ Virtual dressing room uses your in-home motion capture device (such as the X-Box Kinect) to assess your body shape and virtually project clothes onto your digital frame. If you like what you see, your purchase can be completed right through your console.
AR is also finding its place in advertising.
GoldRun has already launched several successful AR advertising campaigns. One of their most interesting campaigns was when they created a virtual shoe store for Airwalk. AR markers were secretly hidden in public places in Washington, New York, and Los Angeles. Customers used their smartphones to locate the markers, and were able to view limited edition versions of Airwalk classic shoes. They could then place an order from their phone for the shoe that they found.