IBM’s Stephen Laughlin encourages getting hyper-personal
Personalization has become the name of the game. Consumers continue to shop in stores, but they now are looking for an experience, and as Stephen Laughlin, IBM’s general manager of global consumer industry, highlighted at the recent Digital Disruption Innovation Summit, the new focus of retailers should be de-averaging the trip to the store, and in the process making an impression and a sale.
“In the United States in particular, there’s an awful lot of talk about apocalypse — and there’s some data to support this,” Laughlin said. “However, retail sales are up overall, so more importantly disruptor companies are grabbing share from established companies. We would argue that stores are the battleground — stores matter. But you have to make them matter.”
In this environment, Laughlin said that the imperative for retailers is to personalize the in-store experience — to move past simply knowing a customer’s demographics or even cursory behavioral analytics toward understanding various reasons a customer might step into a store. “Those journeys have different objectives or purposes, and when you understand those purposes, then you can understand how to interact across those journeys more effectively to capture loyalty and share across those journeys” he said. “That’s how you de-average the experience.”
De-averaging the consumer experience requires, at least partially, rethinking the store’s function. Laughlin highlighted such brands as Bonobos, which demonstrated that the store can be used a showroom, and Kohl’s, which fulfilled almost a third of its online orders in-store this past holiday season, fueling additional, ancillary in-store sales. “The reality is that the store is where you deliver the brand promise — one of the key places,” Laughlin said, noting that retailers and suppliers can use several strategies to bring shoppers into the store.
One of the strengths that stores have is their location in relation to other elements — schools, sporting events, churches and foot traffic, among other elements. Laughlin said that these elements, which also include weather and such seasonal events as allergies, present an opportunity for retailers to use proximity marketing to drive store traffic. It also can be used in-store, Laughlin said, pointing to Kroger’s use of its Kroger Edge digital shelf labels, which, in concert with the retailer’s mobile app, can use in-store location to help guide shoppers on their journey, delivering personalized ads and product suggestions.
Laughlin said that, though in the aftermath of Cambridge Analytica, consumers might be wary about using data, what matters is how the data is used. Indeed, he said, “They’re comfortable in general with you using it if you use it in a way that provides value to them. And so there’s tremendous opportunity to use this dark data — dark meaning simply you’ve never turned the lights to it — to further de-average the experience.”
Beyond data, retailers can use other tools to appeal to consumers, including the use of AI chatbots for guided selling — with such companies as L’Oréal in Europe and global hospitality and retail giant Lotte trying out AI-powered chatbots to offer personalized product recommendations.
“These opportunities to do guided selling — they’re right there. I always say, ‘Can you explain things to your mom?’ or ‘Have you taken your mom into a store to see if she can shop it?’ I think sometimes for those of us in the industry and in stores regularly, we don’t always realize the opportunities to simplify.”
And then there are associates, who Laughlin said have the opportunity to be in-store brand ambassadors. He highlighted Boots’ beauty advisors and IBM Watson’s work with City Furniture, whose associates now work off of tablets. “The opportunity exists to allow associates to engage with customers; perhaps it is a novel idea that associates aren’t supposed to do check out or stock shelves, but that they can actually be the brand ambassador again if we put information in their hands.”
“In the United States in particular, there’s an awful lot of talk about apocalypse — and there’s some data to support this,” Laughlin said. “However, retail sales are up overall, so more importantly disruptor companies are grabbing share from established companies. We would argue that stores are the battleground — stores matter. But you have to make them matter.”
In this environment, Laughlin said that the imperative for retailers is to personalize the in-store experience — to move past simply knowing a customer’s demographics or even cursory behavioral analytics toward understanding various reasons a customer might step into a store. “Those journeys have different objectives or purposes, and when you understand those purposes, then you can understand how to interact across those journeys more effectively to capture loyalty and share across those journeys” he said. “That’s how you de-average the experience.”
De-averaging the consumer experience requires, at least partially, rethinking the store’s function. Laughlin highlighted such brands as Bonobos, which demonstrated that the store can be used a showroom, and Kohl’s, which fulfilled almost a third of its online orders in-store this past holiday season, fueling additional, ancillary in-store sales. “The reality is that the store is where you deliver the brand promise — one of the key places,” Laughlin said, noting that retailers and suppliers can use several strategies to bring shoppers into the store.
One of the strengths that stores have is their location in relation to other elements — schools, sporting events, churches and foot traffic, among other elements. Laughlin said that these elements, which also include weather and such seasonal events as allergies, present an opportunity for retailers to use proximity marketing to drive store traffic. It also can be used in-store, Laughlin said, pointing to Kroger’s use of its Kroger Edge digital shelf labels, which, in concert with the retailer’s mobile app, can use in-store location to help guide shoppers on their journey, delivering personalized ads and product suggestions.
Laughlin said that, though in the aftermath of Cambridge Analytica, consumers might be wary about using data, what matters is how the data is used. Indeed, he said, “They’re comfortable in general with you using it if you use it in a way that provides value to them. And so there’s tremendous opportunity to use this dark data — dark meaning simply you’ve never turned the lights to it — to further de-average the experience.”
Beyond data, retailers can use other tools to appeal to consumers, including the use of AI chatbots for guided selling — with such companies as L’Oréal in Europe and global hospitality and retail giant Lotte trying out AI-powered chatbots to offer personalized product recommendations.
“These opportunities to do guided selling — they’re right there. I always say, ‘Can you explain things to your mom?’ or ‘Have you taken your mom into a store to see if she can shop it?’ I think sometimes for those of us in the industry and in stores regularly, we don’t always realize the opportunities to simplify.”
And then there are associates, who Laughlin said have the opportunity to be in-store brand ambassadors. He highlighted Boots’ beauty advisors and IBM Watson’s work with City Furniture, whose associates now work off of tablets. “The opportunity exists to allow associates to engage with customers; perhaps it is a novel idea that associates aren’t supposed to do check out or stock shelves, but that they can actually be the brand ambassador again if we put information in their hands.”