Female customer shopping in online fashion store with mobile phone. Woman buying shoes or boots with smartphone. Internet sale on website in cellphone.Getty
For years marketers have harped on the need for personalization in advertising and content. With all of the data tools available today, there’s no excuse for serving irrelevant content to a consumer.
As you’re all aware, just over a month ago we were all being inundated with U.S. Midterm Election news and advertising. I was shocked to see that even with such high stakes and lots of ad dollars, some still hadn’t figured out the need to target appropriately.
A colleague of mine was expressing her frustration after being served an ad encouraging her to vote for a candidate in New Jersey while scrolling through her social media feed. She is a resident of Pennsylvania, so this ad was both annoying and ineffective. Frustration is something we don’t want someone to feel when experiencing an ad, whether it be for an election or a product or service.
Thanks to data and technology, we’re seeing this idea of targeted, dynamic pricing and promotions growing in the retail industry.
This idea certainly isn’t new. Think about airline ticketing and ride-sharing. Prices fluctuate based on demand. In retail, too, it all starts with demand, and retailers and brands win by ensuring we have the right products in the right locations to meet that demand. However, with historical and forward-looking voice of the customer data, organizations can better target specific prices and promotions than ever before.
Let’s walk through how this might work. By leveraging a customer-centric merchandising solution, a retailer or brand may know that a particular segment is very interested in a new winter jacket that is coming to market.
That retailer or brand would be able to look at historical sales of this segment. In reviewing this, they could see that traditionally, this persona is not willing to purchase winter outerwear unless he or she is given 40 percent off.
The retailer or brand could then jump back to the forward-looking data and see what demand looks like at that price point. This data allows them to understand where to price the product initially to be able to capture the most demand at that 40-percent-off price point.
By working with the marketing team, they can ensure that segment receives that specific promotion, while others who are more willing to pay full price receive a different promotion.
I think we can expect to see even more of this as technology continues to evolve and expand. The future of in-store dynamic pricing will incorporate beacons – small battery-operated wireless devices that transmit Bluetooth signals to nearby smartphones.
Someone shopping in Target, for example, who also has the Target app on their phone, could be pinged by the beacons with certain promotions as they are passing the products in the store. The offers will be tailored to each individual, because Target would have data on previous purchases and future interests.
This may all sound very futuristic, but the truth is, it’s not far off. In late October, Sam’s Club announced the opening of its new testbed for the latest retail technology, Sam’s Club Now. In the Dallas-based store, the company will test out new concepts like mobile checkout, a camera system for inventory management, electronic shelf labels, wayfinding technology for in-store navigation, augmented reality and artificial intelligence-infused shopping.
That may just sound like a lot of buzzwords, but some of the plans are actually realistic and would be helpful for the shopping experience. For example, Sam’s Club already has its successful “Scan & Go” app. At Sam’s Club Now, the app will be integrated with a mapping system that will use beacon technology and will be tied to a customer’s shopping list to map their best route through the store.
Add in AI technology, and a user’s shopping list will be pre-populated with a customer’s frequent purchases. While the news didn’t discuss integrating promotions into this, it doesn’t seem far off.
It will be interesting to see how this all evolves. As mentioned earlier, it is important to avoid frustrating people with irrelevant content. Additionally, tailored pricing adds increased complexity for retailers and brands in ensuring they have the right product, at the right price and at the right time. Retailers and brands who are equipped with voice of the customer predictive analytics will be best prepared to serve up what their customers want most.