The In-Store Boomerang Strategy

American consumers walking around shopping malls this holiday season will start to see the first visible signs of retail merged channel strategies. All kinds of hooks into—and from—online, cellphones and call centers will start to percolate through store aisles and checkout lanes.

But in what could be called the Boomerang Strategy, what consumers will see in-store this season will be quite far removed from the utopian epitome of merged retail channels, with the customer shopping through whichever channel is most convenient and store management apathetic about that customer choice.

No, what stores will be doing is using non-in-store technologies to get consumers into the stores and to make them buy in-store-only. In effect, to boomerang them from in-store to the Web (or mobile) and then back into the store. It's the retailer's paraphrased version of the AAA pledge: "What you see here, what you hear here, what you want to buy here, stays and gets paid for here."

Consider:
  • Some Wal-Mart customers fighting among the throngs for that special something this season will find themselves with an edge, if they have their cellphone with them. Customers who opt-in will get text messages alerting them to short-duration (typically about one hour long) sales on a handful of merchandise. The alerts may come in through the phone, but it's only good for in-store purchases. The people providing that Wal-Mart service—Air2Web—are doing similar mobile in-store projects for Sam's Club, Office Depot, Dominos and Footlocker.
  • At Bloomingdale's in New York City, customers there may get a chance to see the mirror experiment the department store has been playing with. A customer goes into the dressing room and tries on a new potential outfit. She walks over to the magic mirror and models it. But the mirror is broadcasting these images live to a Web site, where the customer's friends—and quite a few strangers—can IM reactions back to the customer, who can then make an instant in-store-only purchase decision.
  • In Madison, Wisconsin, customers of the Fair Indigo clothing store—the latest project of the former Lands End E-Commerce wizard, Bill Bass—will be able to walk into a store and grab an item off the shelf. The customer will be able to walk over to a kiosk, have the apparel's barcode scanned and instantly see all of the online user comments about that product. "Online customer reviews are something that our audiences love," said Bass, the store's CEO.

    Even though these are all examples of cross-channel communications, these are not examples—nor do many such examples exist—of data moving back and forth between channels. Even today, very few major retailers have been able to put in place databases that can cleanly exchange data across channel lines.

    For example, blasting out a special promotion to a list of cellphone numbers is a straight-forward one-way communication. But allowing a store associate to see the Web activity logged in by an in-store customer—or a list of the questions asked of a customer service representative or order clarifications phoned into a catalogue call center or tech support incidents—is much more difficult, from an IT perspective.

    Such true merged channel data exchange would also require political changes, with senior management ordering that walls between channel business units be either brought down or at least made ultra-porous.

    Not all of the new technology that will be deployed in-store this holiday season, however, will be related to merged channel. Some apparel chains will be using handheld mobile devices—not phones—to give their on-floor salespeople a realtime look into inventory, with the ability to ask that a runner bring out merchandise in a particular size and color.

    Why? Karen Sharma, representing a software vendor called iCongo that makes such a mobile device, pointed to "studies that show that 25-30 percent of footwear customers leave the store as the sales associate goes to the back room to retrieve the specific size footwear for the customer."

    Another technology that will making its national retail debut this holiday season is one that is unlikely to be noticed by most consumers, but it's leveraging retail equipment that is decades old: security closed-circuit video cameras.

    What the technology—coming from a vendor called Intellivid—is doing in several major chains is coordinating multiple store cameras together, coupled with analytical software that examines store movement. But how it's being used is where things get interesting.

    For example, several months ago, according to Intellivid CEO Patrick Sobalvarro, they were testing the system in a large department store when store security received a report of a missing child. The store was able to use the system to rewind images to find a point where the mother and child were together. Then they played the images forward, telling the system to piece together camera images to follow the child when the pair separated. Within minutes, the computer-aided tracking cross-camera footage found the boy hiding behind a display.

    Sobalvarro said it was no abduction attempt and was apparently a mischievous boy. But of potentially greater interest to retail IT is its business potential to analyze traffic flow for optimal product placement, track theft much more precisely and even help with customer service.

    How can it help with customer service? Sobalvarro has one warehouse club customer that has programmed the system to watch high-cost items—such as bigscreen TVs—and to send a "realtime alert to customer service is a customer lingers in an area too long," suggesting that the customer might need sales help. "We're trying to fix problems before they become problems. It's watching customer flow, identifying deadzones where customer service needs to be," he said.
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