Last Updated: Mon Jan 16, 2012 05:00 pm (EST)

Presence-Aware Stores Can Reach More Shoppers Than Can Mobile Apps Alone

Since there are many more shoppers than smartphone users, Known Presence looked for how stores could personalize each shopper's experience.  Innovating in-store was the key.
There are many more cellphone carrying shoppers than smartphone users. Retail businesses need to leverage both the "smartphone technology haves" and the larger number of "have nots". Innovating in-store is key to breaking through the App-download barrier.

The numbers tell a compelling story: Retailers who reach 100% of their smartphone customers are missing most of their market. Physical stores can be taught to reach-out to customers with every type of cellphone, not just the smart ones. And mobile equivalents of online technologies can let retailers know which phones belong to which customers in their loyalty programs, even for the cheapest phones. Since there is no cost to customers for giving them such a cardless loyalty card, why wouldn't retailers prefer to reach-out and serve every shopper instead of just those who remembered to download an App?

Not Enough Smarts

Let's agree that the "One World" syllogism is not true. At one time or another, computer vendors have argued for One World in every product category (e.g., mainframes, databases, personal computers, UNIX, thin client computing). Mobile's One World assertion glibly goes like this:

  1. Smarter phones are such compelling value propositions that consumers will prefer them over less-smart (and less-functional) devices;
  2. Production scale economies are so steep that high-function smartphones will be as inexpensive or cheaper to make than the lower function alternatives;
  3. Ergo, smartphones will fully penetrate the market for mobile devices, and so businesses should focus on behaviors in the smart mobile segment and ignore the rest as uninterestingly not the future.

That message is part of how vendors market to enterprise buyers, which includes retailers. IBM and Motorola marketers started using it for smartphones as early as 1992. And the One World syllogism means to convince chief information officers that endurance is their best strategy, in the face of growing costs and complexity, for better times are right this way. But the installed base of handsets continues fragmenting (see exhibit). Now, Apple's iPhone, Google's Android, and Nokia Nseries, Motorola, RIM Blackberry, et. al. all are seen to be smartphones. Applications for them have to be re-ported to each new device, and that applies equally to each manufacturer's different version of Android. Just managing the number of software configurations needed to service retailers' most technologically advanced customers is expensive. Unless you are a retailer who sells mobile phone service, the syllogism is neither true nor a useful shorthand.

Informed by more than 20 years of experience, we all should set aside the assertion that our customers -- the wireless carriers' market -- will soon be completely populated with smartphones. Instead as business users, we should move ahead with confidence in a more realistic future. That future includes finding ways of reaching customers who have less-smart phones and embracing the complexities of our customers' phone preferences. That applies to stores located nearly everywhere.

Let's get back to addressing retail's actual needs that mobile is uniquely suited to addressing. Let's make stores more aware whenever a customer is present. In addition to having every Associate eager and leaning forward to offer assistance, let's teach the store itself to be presence aware.

Retailers can satisfy their own needs using all the phones already in consumers' pockets, pocketbooks and carry bags. There we find smart and feature phones, CDMA and GSM network technology, some 2G lots of 3G and now 4G, pre-paid and post-paid carrier plans, and some with texting plans and most either without data plans or with such minimal ones as to belie price sensitivity. Engineers commonly respond to such device complexity by isolating it so it does not adversely effect other systems and operating costs. (This approach is what software architects call an "abstraction layer".) Known Presence makes such a network service offering, accomplishing precisely such a simplification of complexity in mobile, for retailers.

Retailers can put all of those mobile phones to use as a wireless loyalty card -- actually, as a cardless "loyalty card" -- without adding to or modifying consumers' phones one iota. Known Presence's service can have a "cookie" for each phone, so like online, retailers can know how to associate each phone with a customer account. And unlike online browsers, Known Presence's service cookies work while the consumer experience remains hands-free and eyes-forward. Such a non-physical card can put an end to the costs of printing and distributing the physical variety. It eliminates the searching-for-card and the may-I-borrow-yours time from the check-out process. And, uniquely, it can help capture the time value of information otherwise lost in the sales and service period of a shopping visit.

Having satisfied this most basic need to identify each customer (and respected the privacy of those who prefer otherwise), retailers can also know when and where individually identifiable cellphones are within a store. The technique for accomplishing this is a form of triangulation which was first proven effective nearly 70 years ago in World War II. What is relatively new is such location determination in a retail store and with mobile phones. Devices to do precisely that have existed for over a decade and have recently become more cost effective.

"Treat Me Well"

Being able to recognize and reach every store-visiting shopper is a powerful capability IF there is something positive that can be done to increase the shopper's spend at that retailer. Experience science suggests what we can do to treat customers well, and what we should avoid. If you were designing a store, you would never choose to deliberately discourage shoppers from looking at your merchandise and its presentation in the store. So helping shoppers to stay off their cellphones while in-store is a good thing. That way the store lay-out, signage placements, end caps promotionals, check-out line impulse displays, and shelf-stocking of high margin products at eye-level can do their part.

Individual shoppers respond positively to at least three classes of overt in-store marketing. First, "Digital Greeters" are store entry signage providing way-finding to a BOPUIS customer and shoppers-like-you suggestions to returning customers. Second, "Hotspot Dispatchers" are messaging systems for moving a Store Manager or the right Associate to a customer with high Lifetime Value. And, "Selling Assistants" help Associates follow a campaign that is personalized to the shopper standing before her/him. Those marketing applications use analytics that work best with cardless loyalty card systems and shoppers who "opt-in".

Presence-aware stores can reach-out to every shopper with the most relevant experience available. That is a more-and-better operating strategy than is trying to do something for a smaller niche. Each retailer will have its own list of actions which its presence-aware stores should take for every visiting customer. Known Presence applauds that kind of innovation in how best to serve real-world customers well.

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