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Digital tools play an increasingly important role for retail stores

  • Posted on November 20, 2020
  • Estimated reading time 4 minutes

We've gotten used to getting valuable help and guidance when shopping online, based on purchase history and personal preferences. Now there is growing interest in how this same data can be used in the physical store as well, using it to develop new and better relationships with customers. 

Imagine you’re grocery shopping and your phone sends you a reminder as you pass the ketchup section. Maybe you'll get suggestions for a new variety with less sugar that fits better with your dietary requirements or a warning that the catchup product you're holding in your hand contains something that someone in the family is allergic to. When you scan the code to find out more about the product, you can also read how many grams of carbon dioxide the product has generated, whether the plastic in the bottle can be recycled in your municipality and how well the manufacturer lives up to its sustainability goals and codes of conduct. Maybe you decide it’s time to try a new brand that better meets your requirements and wishes as a consumer. Or why not try a recipe from your favorite chef and make your own ketchup. 

These are examples of what retail companies mean when they talk about Hyper Contextual Information, that is, personal and relevant information at the right time in the exact place you are. It’s similar to when you shop online but adding on the physical experience of being able to see and try the product and turn to someone who works in the store if you have any questions. 

Although more and more transactions are taking place online, there is also a growing understanding of the importance of physical stores to the overall brand. In recent years, the big chain stores have become increasingly interested in how to collect and use data to enhance the customer experience. We’ve learned that customers are often willing to give up this personal information if they feel they are getting something for it in return.  

But that’s not necessarily limited to discounts and vouchers. It could be services, such as home delivery and installation. Or perhaps it’s something completely different like a free workout with a personal trainer at the gym. It can also be as simple as the store keeping track of what a customer has purchased and their personal preferences as a help when they do their shopping online.   

Customers are also becoming aware of the value of their data, and in many cases, they are open to it being resold. But many are demanding a share of the profits and that any such transaction is handled in a safe way that gives them full transparency and control. The stores therefore have everything to gain from explaining how they collect data and how it is used. When customers themselves experience the personal benefits that data collection creates, the resistance to the idea generally decreases. 

Here are three key insights to build out data-driven stores and increase the customer experience: 

1) Think of the physical and online store as a single digital entity. Digital tools your employees use online can be implemented in the store as well. Without access to the same data, the store will have difficulty coping with its tasks.

2) Invest in your staff. An increasing proportion of sales starting online means the staff in the stores must take on new responsibilities and tasks. They are being asked to guide and inspire customers. This places higher demands on service and treatment, which in turn requires greater knowledge and experience. 

3) Use the data you already have. The customer data readily available is not being used to its full potential. Start by embedding the data you already have in digital tools and then add on new data and more sophisticated solutions to meet each customer's unique needs. 

Better data provides opportunities for stores to understand customer needs more easily, which is especially important with the outside world changing so rapidly. Those companies that think they can still plan things six months in advance will find it difficult to survive. Instead, it's about constantly experimenting and searching for new ways within the framework of the brand to create the best customer experience at any given moment.  

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