This insight can help retailers provide what customers are looking for, but it’s critical to establish a strategy, rather than looking for niche and one-off opportunities to use AI, Warner said. “Many retailers typically employ a fast-follower or even laggard strategy when it comes to adopting new technologies,” she said.
Instead, they should focus on targeted testing and learning across the retail value chain. “The biggest risk to retailers is not acting fast or aggressively enough to define and execute against the best-fit AI use cases,” she said.
The Retail Compass Points Toward Geolocation
Geolocation technology points retailers toward remarkable capabilities. The list includes dynamic pricing, highly personalized marketing and promotions, and entirely new types of services. It’s possible to create breadcrumb trails that lead customers to specific products in a store, and establish business partnerships to drive traffic into stores. Taco Bell, for example, partnered with ride-sharing service Lyft to allow customers to go through a restaurant drive-through while on their ride. This pushed visits up by 8% on weekends.
“A retail customer’s smartphone provides multiple ways for geolocation information to be collected,” according to Tim Zimmerman, research vice president at Gartner. “Wi-Fi, BLE, and UWB are indoor options that vary by the necessary granularity, while cellular and GPS provide outdoor location options.”
Geolocation, particularly when combined with AI, makes it possible to harness data at a far more granular level and establish micro-strategies that are based on the specific needs of a store.
“Geolocation applications not only provide personalized marketing to users, they also provide valuable information such as the path that all users, or a specific subset, travel through the store, or how long they typically spend looking for what they purchase,” Zimmerman noted.
This means retailers can design and build stores that are suited to a specific location—and replace “manager intuition” with sound evidence. Using GPS information to determine how far users travel to get to a store helps retailers also determine the physical location of new stores. In the end, this makes it possible to use location to optimize a retailer’s global brand marketing strategy.
However, for geolocation to be most effective, retailers must adopt a far more granular view of the market. This means crafting a different strategy for each store based on local needs, plugging in the right data and analytics tools, and using AI and automation to manage tasks. Retailers must then overlay all of this with global rules and dashboards that tie all the threads together.
Next comes the ability to separate the signal from the noise. When every price point a retailer collects is multiplied by the number of stores it has, specialized technology is required to handle the volume and acquire more precise data on competitor prices.
Digital Wallets Are About Dollars And Sense
Digital wallets are quietly ringing up gains in retail. They not only offer a way to purchase things with a phone or smartwatch, they’re evolving into full-fledged ecosystems that unlock customer insights and forge loyalty by providing convenience, value, and security.
“Adoption of digital wallets in the U.S. is advancing as retailers build out a variety of features, such as ease of checkout—especially for omnichannel orders—access to loyalty and reward programs, coupons, personalized offers, receipts, order history, and more,” said Capgemini’s Warner.
Greater trust and value are at the center of the equation, Warner said. “Digital wallets, through the use of facial recognition, have become an important tool to enable seamless, convenient, fast, and secure transactions.”
It’s a fact that hasn’t escaped Starbucks, Target, Ticketmaster, and Five Guys, which all offer increasingly sophisticated features tied to orders, payments, tickets, promotions, rewards, gift cards, and more. In September 2019, Walgreens announced that Apple Pay users would receive 3% daily cash on purchases made at stores and online. The digital wallet is tightly integrated with its loyalty program.
The concept is expanding. Auto manufacturers are dropping digital wallets into cars, which will further drive changes in consumer behavior. For example, Honda Motor Corp. has introduced a system, Honda Dream Drive, which uses the vehicle’s onboard infotainment display to enable payments at gas stations, smart parking lots, grocery stores, and drive-through restaurants.