Technology and Marketing in Future Stores

With every new bit of technology that helps us connect the “online us” with the” real world us” there is a pledge to make shopping easier. When they really talk about stores, they always talk about how there’ll be smart shopping carts that will tell you what you have in the cart and how much money it will cost. While that will never really happen (at least not instigated by stores themselves, because stores bank on your impulse buys and poor math skills while you’re hungry) there are many other things that will make it to us.

For example, going beyond the Shop Savvy app is Stickybits app that tells you what things you can make with the item you see at the store. This is the sort of thing that we’ll be seeing more of, mainly because advertisers can get behind it, as the app will lead to more sales.

I think Stickybits is just scratching the surface of what can be done with the advertising-is-helping game plan. There are still some parts of the plan that need to be sorted out before it becomes really excellent. The big thing is that there needs to be a bit more push on the advertising side. Methods need to be able to reach out to consumers rather than waiting for them to scan every item they pick up. For that to work, there needs to be a way to figure out proximities to products and to broadcast the location of products.

Perhaps when RFID finally supplants bar codes there’ll be a way to connect to the customer as they pass the shelf to a product. The cart perhaps would have a display or something that shows the specials on each product being passed, thereby increasing the billboard space of each bit of packaging. Taking steps further, when items are placed in carts, the carts would then recommend items in other sections that would be relevant to the current selections.

If you had a system like this, it opens whole new realms of marketing. Products would then be marketed as groups of products and advertising would be targeted to that. Say if you picked up Spaghetti noodles, when you walk past the sauce, advertisements hiding behind ‘recommendations’ would show and in dairy, the cart wouldn’t forget either. There would be a recommendation for Parmesan cheese.

What this would eventually bring is a market for search terms for each grocery store. Vendors would compete at top billing in the recommendation category for sauces after that shopper picks up the noodles – kind of like the battle for shelf space now, only this would be more vibrant and fluid. It would be a battle for the impulse buy.

Not only will there be a battle for recommendations, there will also be a battle for who gets top billing for a certain location, like the seventh foot of aisle 3. We all know how important it is to get to at least the first page of a search engine ranking. It will be even more important to get on the first or second ranking on these store battle grounds.

There will be interesting strategies developed by when not so large vendors who cannot compete head to head with large companies. Many will have to be more savvy, probably using the recommendations and capturing lower volume items and owning their recommendation ratings.

This depth of advertising capability will become still more labyrinthine as temporal situations could take effect. Perhaps stores will sell the rankings and recommendations as a factor of time. The hour or so before sporting events will cause a rise in the ad costs for snack foods and beverages. These times can be set up by mining the already available register sales to determine such things.

The final customer connection will be with the interaction of the cellphone or personal media device or whatever it will be called. The cart will pick up on the phone’s proximity to it, there will be a handshake protocol through an app that will recognize the customer as a repeat customer, just like today with your swipe savings card only this will be instantaneous and hands-free. The savings program will be far more advanced than now. It will recognize you, but more importantly, it will recognize your shopping habits and tailor your experience to that while learning for your next shopping trip.

We as consumers will be come slightly aware, we will learn about how things will work dimly through the experiences we learn through pushing our augmented shopping carts through the stores. Hopefully there will still be ways to game the system.. Of course there will be, there probably will be more ways!

How to Save Department Stores

A friend of mine asked me earlier this week if I thought that department stores would become extinct. That thought is a distinct possibility, perhaps even a probability. Then I began to think about what could be done to save the department store. Curiously, my thinking lead me to the department store’s past.

If you go into most stores like this nowadays you can kind of see a shadow of what they once were – grand temples to consumerism, where shopping was an experience to save up for and even dress up for. Families would work up to a trip to the department store. It was exciting. They had everything. This sort of thinking was even poked at in the Brady Bunch movie “Put on your Sunday best kids! We’re going to Sears!”

That feeling is gone when you walk into a department store for the most part. The selection is really the same sort of things that you’d find manufactured in China for other stores. The difference between a trip to Macy’s and a trip to Kohls is not really that different anymore, except Macy’s has a bigger selection of pots and pans.

There is one place that still has that shimmer of the Olde Days. That place in the department store is cosmetics.( Now, I have to admit that I am a guy so I imagine all the best parts I can only imagine as better, but here goes.) Here is where Macy’s or whatever store is near you has the clear and distinct advantage. That advantage comes solely from the experience. People are fawned over by attentive and knowledgeable staff that listens and understands what you’re looking for. They spend time with you. They’ll go through the entire display of colognes with you. They’ll recommend scents based on what you like. They smile. They’ll even apply the makeup that they sell on you to show you how you will love it. Did I mention they smile?

Target’s makeup aisle is just that – an aisle. Cold, faceless gondolas of product ready for you to hunt through, hoping you’re buying the right thing and praying that what you want is in stock. If it’s not on the shelf, you’re screwed. Those associates don’t know any more if that lip gloss is in stock than if it’s raining outside. Buying cologne? You’ll have to buy the product at $35 to see if you like it – but first you’ll have to find an associate to unlock it from the case.

What does this mean for department stores and their future? It means that they have something that sets them apart from the big box stores. That thing is The Experience. Where does that come from? It comes from making a visit to the department store a destination event, not just a place to buy clothes.

A friend told me glowingly about her first visit to a Nordstrom’s. It was maybe 5 years ago. She still remembers it more than any other event that happened on her first trip to Seattle. Why? It was The Experience. She went in to browse. She came out with three bags of clothes. The reason for that was not the ‘low, LOW PRICES!!!’ it was that a member of their staff guides and assists you through the store and actually sells you things. They care, they listen, and they suggest. What do they get out of that attention and extra manpower? They sell someone who would have otherwise bought the cheapest item to get the souvenir bag.

Speaking of bags, that’s another point worth mentioning – brand cache. I remember when I was growing up and seeing the Marshall Fields bag walk past when I was in Chicago and you knew that the person carrying it was doing pretty well for themselves. Someday, I wanted to shop at Marshall Fields and be the person with the BIG Fields bag, too. It meant something to carry that bag. It meant far more than any Target bag can. It was a nice bag as well. It was double walled paper made strong and competent with a sturdy handle. The bag showed that the store cared about you even at that stage. Marshall Fields cared that your freshly purchased goods made it all the way home through the heavy, biting, rainy winds of late Fall.

Getting back to the experience aspect, what department stores need to do to survive and even thrive is to make going to their stores a destination event again. To do this, they need to make customer service paramount to the operation of the store. No more hiding behind cash registers, associates have to go out of their way to engage customers. It’s almost like making the journey to a department store into a shopping version of Disneyland where it becomes a special world of wonder unto itself.

The store has to build on that brand cache. The sale signs have to go. The two for one deals have to go, as do the cheap acrylic sweaters. Yes, you will loose the bargain hunter and the thrifty. But what difference does it make anyhow? You’re margins can’t take it anyhow. People will come to see the opulence. People will come to see the four storey tall gallery covered in gold leaf. People want to dream big, everywhere they go, they are surrounded by cheap. They want to feel special and they will buy when a sales associate actually listens and suggests. The customer wants to show off their visit afterwards and carry that branded bag with pride. It was an event. They will come back.

Department stores might be able to compete for a little while on price and maybe on location but not indefinitely and not especially when faced with battling on line retailers. The only thing they can count on is creating The Experience in person – something that no other store can do, neither brickĀ  & mortar or on line – through human interaction and actually caring about the customer.