Sensors and analytics creating a competitive edge in retail

April 15, 2015

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What retailers need to consider before implementing sensors and data analytics to gain a competitive edge.

Imagine a customer entering a store and immediately being greeted with a personalized welcome message. Either a wall of screens near the entrance or the shopper’s smartphone delivers the delightful experience. As the customer traverses the store, her interest is piqued by highly targeted promotions beamed from strategically placed displays. What the customer sees is determined based on her past purchases and recent online activity. When she needs help, she touches any screen in the store or her phone to signal a salesperson. The salesperson is immediately aware via a wearable device of all the relevant information necessary to provide the customer with a  highly personalized experience. “I hope you’re enjoying the bike you purchased last month. How can I help you today?”

The ubiquity of smartphones and advances in lightweight communication protocols such a Bluetooth LE (Low Energy) are empowering retailers with the ability to use a customer’s physical location to deliver a customized shopping experience. Also known as Beacon technology, the platform consists of small devices that communicate their presence across Bluetooth to listening devices such as a consumer’s smartphone. These signals can then be used by a retailer’s smartphone app to identify customers, approximate their locations, and provide timely and relevant information or offers. Other potential consumer benefits include instant “check out” or at-home delivery without needing to tell a store associate your address. Even in-store navigation to a department or product via virtual reality on your personal device is possible.

For the retailer, this new approach opens up a rich dataset to help create a broader view of their customers across multiple channels. With a more contiguous view of customers, retailers can provide a more cohesive brand experience both online and offline. Providing customers with a more consistent experience can forge unbreakable bonds with customers.

Platform considerations

PwC’s Emerging Tech Lab recently developed a beacon prototype in which customers use in-store displays to make purchases, receive promotions and consume customized content based on their physical location. This simulated shopping environment was used to understand the capabilities and limitations of beacons and revealed some key considerations for any Beacon deployment.

Signal Range

The higher the signal strength the beacon can produce the larger the area it can cover and the more accurate the result. However, it will expend more power. If power consumption is a consideration (i.e., battery powered beacons), implement the lowest signal strength that covers the target area. If power consumption is not a consideration, deploy the beacon with the highest signal strength.

Power options

Beacons need a small amount of power to communicate their presence. Battery powered beacons offer better placement flexibility at a cost of lower signal strength (i.e., accuracy) and higher maintenance requirements (e.g., battery replacement every two years).   Wall-powered beacons generally provide better accuracy but must be tethered to a power outlet.

Device features

When choosing a vendor, carefully consider factors such as precision, signal strength and battery life of their beacon devices. Administrative functions such as the ability to remotely adjust power and ping frequency or the ability to check battery levels become increasingly important as implementations scale.

Beacon placement

LE Bluetooth packets emitted by beacons are much weaker than traditional Bluetooth and severely degrade when passing through solid objects such as walls or passing users. This can be countered by increasing the signal strength or the number of beacons deployed.

Beacon calibration

As the distance between beacon and receiver increases, the measured precision decreases. This can be addressed by normalizing the signal over a larger time period but this introduces a delay in the result. This can be an effective tactic if responsiveness is not critical and both beacon and receiving devices are stationary or relatively slow moving.

Experience design

When determining when and how to activate contextual actions, consider the frequency of notifications and inherent delays in the confirmation of entry and exit from different zones. In the end careful experience design will ensure receiving apps provide timely and useful content without being burdensome.

As sensors become cheaper and more prevalent in our surroundings, customers will grow more accustomed to personalized experiences. Now is the time for retailers to explore how to use sensors to enhance the shopping experience. If they don’t, they could potentially miss out on a great opportunity to leverage their physical spaces to lock-in customer loyalty.

Let us know how you are using sensors to create a personalized shopping experience and stay tuned for part two. We will explore the use of advanced video analytics to understand and optimize the customer journey.

 


Niko Pipaloff contributed to this post.

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Contacts

Chris Curran

Principal and Chief Technologist, PwC US Tel: +1 (214) 754 5055 Email

Vicki Huff Eckert

Global New Business & Innovation Leader Tel: +1 (650) 387 4956 Email

Mark McCaffrey

US Technology, Media and Telecommunications (TMT) Leader Tel: +1 (408) 817 4199 Email