Why are stores waiting until checkout to ID shoppers?

Discussion
Photo: RetailWire
Feb 27, 2017
Tom Ryan

According to Boston Retail Partners’ 18th Annual POS/Customer Engagement Survey, retailers are still struggling to find the best way to identify customers as they walk through their doors.

More than 500 top North American retailers were contacted in November and December of 2016 for the survey.

Seventy percent of retailers indicate customer identification is their top customer engagement priority, up from 62 percent last year.

Currently, however, most retailers still use “traditional methods” to identify customers which entail the customer providing information at the point of checkout. More than 80 percent use the customer’s telephone number, name/address and e-mail for identification, with about half using a loyalty or credit card.

Boston Retail Partners noted that first identifying the customer at checkout puts the in-store experience a step behind online, where website visitors immediately receive personalized offers and recommendations based on their purchase and browsing history.

Seventy-five percent of retailers plan to use Wi-Fi to ID customers by way of their smartphones in the store by the end of 2019. Also via smartphones, by 2019, 71 percent plan to identify customers in-store via a mobile app; 64 percent through a mobile loyalty program; and 60 percent from a mobile website.

Yet the current use of such methods is low and the performance is poor. Of the 43 percent who have piloted or implemented a Wi-Fi method of customer identification, 27 percent said it “needs improvement.” Only 26 percent have piloted or implemented a mobile app method, with 14 percent indicating it “needs improvement.”

The survey also found that “there does not seem to be one technology choice that is ‘winning’.” Many retailers are also testing or planning to pilot MAC address, NRC, Bluetooth, mobile wallet, social media listening and beacons.

customer-id-chart
Source: Boston Retail Partners’ 18TH Annual POS/Customer Engagement Survey

Post-identification, the survey found 36 percent of retailers saying they were able to look up a previous customer transaction, up from 20 percent the prior year. Contact information availability and shopping history access increased in similar fashion. Yet only 21 percent were able to provide customer attributes/preferences and product recommendations to associates pre-checkout.

DISCUSSION QUESTIONS: Is the limitation of technology or shopper apprehension the bigger issue preventing retailers from identifying customers as they walk into their stores? Do you see a practical path to ID’ing shoppers by way of their mobile phones?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"At this early stage of the use of the technology, shopper apprehension would be the bigger issue. "
"Using shoppers’ smartphones to identify them is overcomplicating the issue with technology when a much simpler solution already exists."
"Mobile phones are the key to customer identification, as this a ubiquitous and unique identifier for consumers."

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23 Comments on "Why are stores waiting until checkout to ID shoppers?"


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Mark Ryski
BrainTrust

Shopper identification is a challenge because of both shopper apprehension and technology. As noted, there is not one consistent, reliable way to identify shoppers as they enter the store. The ubiquity of mobile phones makes them the most likely way to accomplish shopper identification, but this is not yet foolproof. The other issue is shopper apprehension. Shoppers need to want to be identified when they enter a store and clearly not every shopper desires this. Ultimately, the solution will need to be a combination of formal shopper opt-in combined with a reliable identification mechanism.

Ross Ely
Guest

The issue with in-store shopper identification has more to do with technology than shopper apprehension. Shoppers are already accustomed to self-identifying at checkout and they know their purchase habits are being tracked.

Shoppers will be willing to allow retailers to identify them in the store if they feel they are getting fair value from the retailer in return, such as special promotions and personalized offers.

Dr. Stephen Needel
BrainTrust

I’ll disagree with Ross (above). I think shoppers do not really want to be identified. We have, I believe, the technology to identify them if they give permission via app. The fact that they don’t give permission indicates to me that what we want and what the shopper wants are likely two different things.

Jasmine Glasheen
BrainTrust
Jasmine Glasheen
Principal Writer & Content Strategist, Jasmine Glasheen & Associates
2 years 9 months ago

Agreed. Most shoppers are only comfortable being identified when shopping online. Mandatory in-person identification still creeps most people out.

Ralph Jacobson
BrainTrust

There are some innovative retailers that have actually been identifying shoppers BEFORE they arrive at the store. If you think about the inherent advantage other industries like airline and hospitality have, these companies know ahead of time what their influx of customers will be via reservation systems. We absolutely have technologies that could transfer this advantage to brick-and-mortar retailers today. This will dramatically help demand forecasting, store staff scheduling and myriad other business functions. The time is now for more retailers to start trials and adopt this capability.

Lyle Bunn (Ph.D. Hon)
Guest

Identification provides the pivot to personalization and so is just a milestone for the in-store experience. As personalization delivers value, ID is increasingly acceptable. Shoppers will weigh the costs/benefits, and I believe will accept being identified as the cost of a higher quality visit.

Cathy Hotka
BrainTrust

This is a huge missed opportunity. CVS has already addressed this, with a kiosk spewing coupons at the entrance of the store. Technology isn’t holding retailers back — it’s only the willingness to use it.

And discounts aren’t the only incentive for self-identification. Older customers and handicapped ones may want assistance as they shop. This isn’t hard to do. Why aren’t more retailers embracing it?

Frank Riso
BrainTrust
At this early stage of the use of the technology, shopper apprehension would be the bigger issue. There is a bit of a shock factor when your phone beeps a message to you upon walking into a store. The technology as I know it is very solid to be able to track a MAC address as long as the phone’s Wi-Fi feature is turned on. Most of us leave it on anyway. Those shoppers who have the retailer’s app, and they are few, expect to see a message upon entering the store. I do think more awareness on the part of the retailer may help but making good offers via the phone would also work to the retailer’s benefit. Do not just tell customers what is on sale but what special sale is there for them based on their shopping history. Most people like to be greeted by store staff and especially by managers. Retailers who use the Wi-Fi phone app to greet shoppers could be a more practical path to a more aggressive use… Read more »
Lyle Bunn (Ph.D. Hon)
Guest

As people wear their identity on their sleeve, do they really expect that this will not be used? Brands with a heart of service (versus exploitation) will make the suitable choice of how they use the information that ID technologies now make possible.

Lee Kent
BrainTrust

It’s not the limitation of technology or customer apprehension. It’s what’s in it for the customer. The customer doesn’t need to be identified just so someone can say hello to them. And, as is often the case, the customer doesn’t need to know what they shopped for at your website the last time. They already bought that or moved on.

If the retailer has something to truly help the shopper — make their life easier, let them go to the head of the line or offer a special courtesy — the consumer will gladly check in. It’s that simple.

And that’s my 2 cents.

Steve Montgomery
BrainTrust

I agree with Stephen, shoppers do not want to be identified in a store. They may not really want to be identified online either but may not have a choice. I believe that most people would opt out if they had a choice. I give the store my credit card and that is the only ID I share. No, they may not have my email, address or other information.

Brandon Rael
BrainTrust

Shopper identification, once it is a seamless and frictionless experience, will be am advancement that will provide significant dividends around curating a personalized and customized experience. The one thing holding this back is the technological maturity, in addition to the shopper’s trusting retailers enough to provide this information.

Once this is a mature part of the shopping experience and the value of identifying yourself once you enter the store is clearly articulated to the customer, then this will take off. Beacon technologies and SMS real-time messaging were the latest trends over the past few years, however, retailers have struggled in operationalizing this across their stores. What is most intriguing is the the roll-out of the Amazon Go convenience stores, where the customer identifies themselves freely when entering the store. How Amazon will leverage this information will provide the proof of concept we are all waiting for.

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
2 years 9 months ago
It’s not about technology limitations but about instilling a new set of behaviors by both retailer and shopper. The litany of technologies and use cases in the report speak to an inherent desire to design a passive technology solution that either does not require action by customers or identifies them indirectly when they take some other action such as logging on to the store’s Wi-Fi. Why not make customer identification a conscious step in store design and be clear about it with your customers? Let’s think about the Amazon Go store. The customers self-identify when they step into the store by scanning their mobile device. It’s an explicit opt-in action that gives the store the right to monitor and facilitate their shopping. For brick-and-mortar stores, they can make identification an explicit opt-in step. Instead of making the customer wait until they checkout to find out how much they saved, why not do the scan at the entry with a promise to deliver a more rewarding shopping experience? Customer apprehension is very real whenever you use… Read more »
Phil Rubin
BrainTrust
2 years 9 months ago

The biggest limitation with shopper identification in brick-and-mortar retail environments is neither technology nor shopper apprehension. It is retail strategy where neither customers nor customer-focused technology (which should follow customer strategy) have been top priorities, at least for most retailers. While there are exceptions, retailers have struggled to do fundamental things like accurately track real-time store-level inventories, so it’s not a surprise that in-store customer identification prior to a POS experience hasn’t been a top priority.

Retail technology is not easy, as there are a lot of moving parts. What is easy (or at least easier), is reprioritizing a business strategy that is more focused on customers and their customer experience.

Di Di Chan
Guest

Mobile technology will change how (and when) stores identify the shopper. The technology is here (e.g. FutureProof Retail’s line-free mobile checkout system). Moving the POS onto the smartphones gives brick-and-mortar retailers the chance to digitize and customize their customer experience in stores. But adoption of retail technology takes time (e.g., the barcode system took about a decade to take off and even the grocery shopping cart took about three years to really take off). With Amazon coming offline into the retail space with all of e-commerce’s successful use cases, I anticipate there will be a proliferation of adoptions the next two years.

Martin Mehalchin
BrainTrust

This is an important element in maintaining brick-and-mortar’s relevance so retailers need to keep chipping away at it. The big challenges are around data integration and human capital. Identifying shoppers is one thing, having the data readily available to do something with your knowledge of identity is what is tying up most retailers. The stats in the last paragraph of the article show how far the industry has to go on this. Once the technology and data are in place, retailers should not forget that a significant training investment needs to be made to enable associates to act on the information in a way that creates value for the shopper and feels authentic and appropriate.

gordon arnold
Guest

Consumer apprehension and the limits of current technologies are arguments no more or less as authentic as weather conditions. In business, the only legitimate reason for or against anything is return on investment(s). People will give away anything and everything of perceived far lesser value than what they need when they want it. This may be for tangibles that own “need it now” status or something as simple as location for information gathering purposes. Using the information consumers are willing provide to the seller will create an impression of time saving value to the consumers. Adding to this value any and all relative promotions that make procurement cheaper and easier will make future transactions difficult to resist. All together we should formulate the irresistible condition known as differentiation. But this all starts with a keen understanding of sales, marketing and the tools we have access to. A great deal more effective than a vision or calling.

Craig Sundstrom
Guest

This is a privacy issue more than a technology one, and I expect it to become even more of an issue as people begin to realize the amount of data being collected, and the ways it’s being done (though offsetting this will be people becoming accustomed to the practices(s)). And is it even necessary? There are plenty of ways for retailers to reach (potential) customers already without bird dogging.

Kenneth Leung
BrainTrust

I think it is a combination of technology, shopper expectations, and ability to execute on the data. Shoppers know they are monitored as part of shrink management, they can be enticed to self identify with kiosks and coupons, but the problem remains, what can the retailer do in real time with the personnel on hand with that information? I have seen the demos a thousand times about the store manager greeting the customer if it is their birthday. I am sorry, unless it is a high-end boutique where where the basket size is large, what store has the execution capacity to do that? That’s the part of personalization that is so hard to do in the store, online it is easy because the cost of personalization is low, but in the store face to face, I haven’t figured out where you can execute with the personnel you have.

Min-Jee Hwang
Guest

Cathy brings up a great point. CVS has already been identifying shoppers at the door while addressing the privacy issue by allowing consumers to choose whether or not they want to be identified. Using shoppers’ smartphones to identify them is overcomplicating the issue with technology when a much simpler solution already exists. Granted, CVS is known for their comically long receipts but that can be easily amended to beaming the discounts to customer’s smartphones should they choose. Having a kiosk available at the entrance and allowing the customer to choose whether or not they want to be identified for personalized discounts is the simplest and easiest way to handle this problem.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
2 years 9 months ago
The biggest issue preventing retailers from deploying customer identification capabilities is not a lack of technology or shopper apprehension, it is probably a lack of understanding of what the best technologies are and how to integrate the new processes into their operations. There are many location-based services technology options and retailers want to make the right choice for their business and customers. And once they identify the best technology, they need to figure out how to integrate it with their current systems to tap into the appropriate customer and product information that will provide the insights to personalize the shopping experience. Mobile phones are the key to customer identification, as this a ubiquitous and unique identifier for consumers. The actual technology that retailers use may be different base on their unique situation, but it will likely involve the consumer’s mobile phone. Developing a strategy and roadmap for the customer identification process is the first step and we are seeing a lot of retailers just starting this process. The good news is that it is now… Read more »
Ricardo Belmar
BrainTrust
This is less about shopper apprehension and technology as much as it is about execution of the technology and how shoppers perceive the output. Most people don’t blink when they visit an online retailer and get a personalized greeting with recommendations. (Admit it, we’ve all clicked on at least one of those when we visit Amazon!) So why do we believe shoppers cringe at the idea of being identified when they walk in the store? These are the same shoppers who want and crave personalization in their in-store experience. That won’t happen if they aren’t identified until checkout — the very end of their experience. The issue is with “how” they are identified. Yes, people feel shocked when their phone suddenly beeps and they see a greeting from the store they just walked in to. Why? Maybe because it’s a faceless entity (the store) greeting them via another faceless entity (their phone). I suspect that same shopper would not blink if an associate at a store they frequently shop at greeted them by name when… Read more »
Geoffrey Ingall
Guest
2 years 9 months ago
Some years ago, the very wise McMillan Doolittle suggested that if you’re not spending 70% of your time trying to solve your customers’ problems, that may well be your problem. Or something like that. Looking at the table, it strikes me that the only people whose problems will be solved are technology companies. The customer does not appear to have been greatly consulted about his or her needs. And yet again, the argument for the technically possible overwhelms the argument for the behaviourally probable. Of course a collaborative customer could provide more commercially useful information on themselves. But with the ever-growing fear of identity theft and the dread of endless pestering, would they wish to? Probably not. Could they be beeped and zapped with offers from the moment they walk in the store, or even before? Of course they could. Would they want to be? Probably not. Of course technology will play a role, and a major one, but it will never substitute for great stores run by great retailers with a great value proposition.… Read more »
wpDiscuz
Braintrust
"At this early stage of the use of the technology, shopper apprehension would be the bigger issue. "
"Using shoppers’ smartphones to identify them is overcomplicating the issue with technology when a much simpler solution already exists."
"Mobile phones are the key to customer identification, as this a ubiquitous and unique identifier for consumers."

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