By Matt Schmitt, Co-Founder and President, Reflect Systems
When shopper marketing and digital advertising circles discuss the future of retail, there’s inevitably a mention about the movie “Minority Report.” Remember the scene when Tom Cruise’s character walks into a Gap store and is immediately identified by cameras and shown a personalized greeting and product recommendation? Though hyper-targeted advertising was a futuristic Hollywood fantasy in 2002, today we’re beginning to see similar computer-user interface concepts realized in technology, such as Microsoft Kinect.
That advancement leaves people asking, “Where does this technology stand with the use of video analytics in retail?” and, “How will consumers’ concerns for privacy be considered in relation to the desires of marketers?”
The Evolution Of In-Store Analytics
The use of analytics and measurement techniques is not new to retailers. Traditional methods of gathering data on shopper behavior and engagement included manual shopper counting, exit interviews and hours of observation.
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Technology-based solutions have grown in their capabilities and rate of adoption. From automated people counters to more advanced video analytics, there are now a number of sophisticated solutions for studying traffic flow, dwell time, shopper intent and conversion rates based on display effectiveness. In some cases, vendor solutions are leveraging existing surveillance camera networks to go beyond loss prevention to track real-time and historical analytics on shopper behavior.
Shopper marketing is no longer just an art, but also a science. When video analytics capabilities are combined with emerging neuro-marketing practices, retailers and CPG brands are able to explore new frontiers in the science of shopper marketing.
Is That Screen Watching Me?
Retail’s swift adoption of digital signage and in-store digital media technologies combined with innovative advances from tech industry players like Intel, are moving the needle on analytics capabilities. Video analytics technology has reached a point where it can detect how and when a shopper is actively engaged by promotional messaging, determine basic demographic data, such as gender, and then use that information to push relevant content to the shoppers in real-time. This allows retailers and brands to discern what messages resonate with what shoppers, so they can adapt messaging on the fly to better communicate with shoppers and increase conversion.
What about analyzing and targeting to a specific individual, like the Tom Cruise khaki pants pitch in the movie? Technology vendors and retailers are careful to stress that video analytics are anonymous in nature. No iris scanning and database of personal preferences here. At this stage of the game, it appears that personal targeting, like offers based on knowledge of the shopper’s profile, is less suited to video analytics and in-store displays and more applicable for use in mobile devices. The coming age of embedding near field communications (NFC) technology in smart phones will undoubtedly bring a whole new set of capabilities and challenges to analyzing and targeting the shopper. The science of shopper marketing has a lot of fast-moving techniques and tools, so the challenge remains in coming up with practical methodologies for application.
Lessons From The Internet: Privacy And Relevance
Facebook recently learned some painful lessons on the boundaries of privacy and trust with its users. The lessons learned in the online world can be applied to shopper marketing. There is a reason technology solution providers are careful to stress that video analytics in retail are anonymous in nature — retailers know any use of technology carries with it the responsibility of maintaining the trust of their shoppers. Brand loyalty and trust are hard-earned in the retail world and are too valuable to jeopardize.
Even so, it is amazing to witness the way individuals have become much less paranoid about personal privacy when using their own computers and smart phones. There is no question the majority of consumers have become more open to the idea of technologies that “know” more about them when they are provided with a better, more relevant experience.
The shopper marketing tools available to retailers today have come a long way and continue to advance rapidly. Determining how and when to use them is critical. Experimentation with in-store video analytics and message targeting is not only effective, but significant in shaping tomorrow’s shopper marketing strategies. If high standards of respect and trust are maintained, an authentic and practical approach that rewards both brand and shopper alike can be realized.
Matt Schmitt co-founded Reflect in 2001 to provide Fortune 1000 companies an enterprise broadcasting software application to power in-store digital media networks.Today, Reflect’s software powers some of the largest in-store digital media networks, including Best Buy’s On Network, GameStop, Target and Verizon Wireless. In his role as president, Schmitt leads the company’s efforts in its mission to empower consumer-facing companies through the strategic use of in-store digital media solutions by positively impacting sales and brand equity.
Schmitt also serves on the Advisory Board for the Digital Screenmedia Association.
