IoT and Marketing: Driving Customer Loyalty

The shift of customer experience from physical to virtual shopping is possibly about to change again. How to lock a customer from “shopping around” and remaining loyal to a brand is the main challenge faced today by many retail shops.
Do you really feel a difference?
I am confident that many you can related to this fact: when you travel around the country or around the world, the retail shops you have access to, are mostly of the same brand. What is the value of bringing back that pair of sneakers or this new electronic gadget from a far destination across the world? In a few cases, the experience and, in most cases, the price (currency exchange rate value or tax free purchase). There are a few niche cases of differentiation that still apply, mostly in the culinary or art market, but even there, most choices are available on a global basis via internet shopping. Customers expect more and require a significant differentiation to alter their choices.
Self-Checkout: the new experience
Retail supermarkets have tried self-checkout as a way to save on personnel and provide a different experience while shopping. An interesting article from the CBC News published early this year explains clearly the fact that self check out has seen a rapid expansion, making the customer think that it is faster and they are in better control.
Nepresso, a Nestle brand, has also introduced self-checkout within their store where you pick your coffee capsules, put them in a Nespresso bag and proceed to self-checkout by putting the bag on a scale/RFID system that is able to identify the picked articles and create the checkout bill.
However, some customers are feeling that the saving is clearly for the company you are shopping at rather than for themselves. With the exception of Italian gas stations where the gas price is dramatically higher is you are being served (large stations have a number of pumps for self-service and a few where your served), as a customer, you are rarely getting a discount for doing checkout work.
What’s next?
Amazon Go is a great example of retail market disruption using IoT as its experience backbone, providing customers with a sense of freedom by not having to pass through a cash register. Based on the information provided by Amazon, the test store in Seattle is currently open to Amazon’s employees and will go public early 2017. This new type of
grocery stores could become the next step in “Stop, Shop and Go” experience as you decide on what you wish to buy and your account is being charged as you walk out of the store, using your smartphone as your identifier. Amazon Go was also featured in a BBC article with a few more details about its inner workings.
Driving the customer experience
The convenience of ordering via your smartphone and picking up an article in the shop already exists via many retailers (mostly in the electronic and household goods area like Apple, Best Buy...). Amazon is looking in taking it a step further into the grocery aisles with pre-prepared menus, bakery and primary necessities products. Grocery home delivery already exists but you get what has been picked for you, you do not have the choice of picking those apples or grapes yourself or are not able to deviate from your shopping list because you are ordering from home and you are not exposed to the visual environment of temptation.
The focus on the customer, the fact that you can experience the shopping, see the produces and walk out with your choices without a line at a cash register (or even feeling the fact that you have done a purchase) is an enticing customer reward.
Gathering more marketing signals
The Amazon Go experience reminds us that IoT and Marketing supporting each other (see Marketing Considerations for the IoT World). New technologies are being leveraged to create additional marketing signals and gather customer behaviour statistics through the value of service.
The IoT continues to feed “Big Data” with the necessary information to create customer loyalty and differentiation into established markets like groceries. IoT and marketing keeps driving the evolution of customer experience.
The essence of success is:
  1. Create customer loyalty by applying a closed loop process between the value provided to
    the customer and the data gathered with the consequence of constantly improving the
    provided value
  2. Use the acquired data to evaluate new services and values that can be added over time to
    expand the customer base and market penetration
As the process repeats, customers keep discovering new values and reasons for loyalty to your brand.
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© STIFFAN Consulting December 2016