Over the past 6 months, I’ve had the pleasure of meeting a range of people from operations, business insight, marketing, technology through to the most senior executives from retailers across the UK, Germany, France, Denmark, Netherlands, US, Canada, Indonesia, Singapore, Hong Kong, Australia and New Zealand. That’s quite a range of different cultures, operating structures, tech systems and consumer challenges and opportunities.
Despite that variety, there are also a set of common themes and questions I get asked regardless of geography and size of the organisation. I view sharing knowledge on non-competitive topics as part of our mandate as a start up. We’re here to help advance as many organisations as possible as fast as possible. In that spirit, for those we haven’t had the pleasure of working with yet, here’s a baseline summary of answers to questions I already know you want to ask:
1. When do you think the Internet of Things is really going to take off?
This is most often the first question when we explain that what we do is use the location of connected ‘Things’ to provide a bridge between the online and physical worlds. As in ’sounds awesome, but when do you think the IoT is really going to arrive?’ Usually, the person asking this question is fidgeting with the number one Thing in the whole IoT - their smartphone. Nearly 1.4 billion [1] of these multi-sensor, connected and highly capable devices was shipped in 2014 alone. They are pretty much physically attached to their owners 24/7 and are used pretty much constantly for an increasingly wide array of tasks. Some of these tasks they do directly such as communication delivery, others they facilitate by their presence such as payments, location tracking etc. So, in short, you’re already well into the IoT age and if you’re only focussing on simple functions such as sending emails and text messages to these devices you are already being left behind. Start to panic, but not too much as you can still catch up if you’re quick.
2. I want to use location tech, but do I need it (or why should I care)?
“I’ve heard that [insert brand] are trialling beacons/wifi/whatever and I feel we should be investigating this too.” is a variant on this question. You want to use it because it’s cool and your company will be seen as innovative, however much more interesting to everyone is why you need it.
You need it and you should care because it will both make and save your company massive amounts of money in ways that are faster and more efficient than were previously possible.
John Lewis, one of our retail customers, has published stats [2] that customers who shop both online and in their physical stores spend 3x more than single channel customers. Connecting the customer experience across these different channels and being able to enable one fluid shopping journey provides massive returns.
The new revenue is big, however the business savings can be massive. The location of a connected device and who or what it is near to in the real world allows you to do three core actions - trigger content to the device or a separate screen; track the location and movement of an asset; and trigger a secure payment transaction. Knowing where their people and physical assets are relative to their customers is saving one of our UK clients £ millions per year with one simple use case of these actions.
3. Do I need an app?
Typically asked by a retailer who either doesn’t have a customer app, or has one and it’s rubbish.
The short answer is yes, you do. There are a number of use cases, including a version of Localz Click & Collect solution that doesn’t require a customer app, but you should plan to either leverage your existing app or start building one (we can recommend a number of our awesome partners to help!)
Why do you need an app? Your customers are now being educated by their experience in multiple different industries such as travel, restaurants and finance that highly personalised, relevant and rewarding experiences are the norm. This isn’t about promotional offers, but providing relevant information at exactly the right time and location and taking away points of friction such as payments. If I can get this from other industries, why can’t I get it from my preferred retailer.
We are well into the second generation of apps that provide genuine value to their users, not just a cut and paste of their online shopping experience. In fact, we’re already seeing the emergence of a third generation of apps that orchestrates events for a user without the need for any physical phone interaction at all, but more on that another time.
The groans I get from retailers about a need for an app is that they were burnt first time around. They rushed out with everyone else to have an app out there but gave little thought to why a customer would need and use it over their existing website. In fact, in many cases the app was much, much worse than their web offering and they were rightly swiftly dismissed from the phone. The result was ‘customers don’t want apps’ rather than stopping and revisiting the question ‘how might we use an app to add value to our customers?’
To have proactive location-based engagement, you need a native app. Apple’s ecosystem revolves around driving users to apps. They don’t want people freely roaming the web, there’s another small company called Google that has the most influence in that space. Google has brought out its own beacon standard called Eddystone. Android devices will automatically respond to these beacons and open a unique url/webpage. Great - no need for an app. Except if you have some customers with Apple devices. They will need to have Chrome installed (as an app) and as their default browser. Current penetration of Chrome on Apple devices is tiny and isn’t likely to grow significantly in the near future.
Finally on this point, what you are trying to achieve is highly relevant pro-active actions and communications at the right time and in the right location. If you’re not on the customers phone, either in your own right with your app, or embedded within somebody else’s app, at best you’re guessing whether you’re relevant to that customer right now. If you’re irrelevant more than a handful of times, expect to be deleted as you’re not keeping up and you’re just contributing to the noise.
4. Can I just use this to track customers?
Yes, but don’t. I know that you just want to listen and learn so that you can get your strategy in place and you promise not to use this for evil purposes, but your customer doesn’t trust you. They don’t trust you because you’ve done nothing to earn the right to track them. It takes surprisingly little for a customer to give you ongoing permission to track them anywhere they go. We’ve proven if you save them just a few minutes once or twice a week, customers will happily leave location services on. Apple is tracking the vast majority of their customers everywhere they go in exchange for one simple free service - find my iPhone.
So don’t just track in the background unless you’re confident that your response will read well in the newspaper when you’re inevitably found out. Do some rapid low-cost trials on using location to improve a very small part of your customers experience, then grow from there.
5. Who’s using location tech in production and what are they doing?
Check out our client and partner list and use cases ;) You’ll find global brands in retail, logistics and banking.
Not all of our production clients are shouting about it yet, because they rightly feel they have a window of competitive advantage, particularly where they are using this for internal business efficiency initiatives. What looks to be innovative right now will be standard customer expectation within the next 12 months. If you need some help catching up, get in touch with us and we’ll be happy to help you.
[1] Global smartphone shipments from 2009 to 2014 (in million units): http://www.statista.com/statistics/271491/worldwide-shipments-of-smartphones-since-2009/
[2] The John Lewis Retail Report 2014, How we shop, live and look: http://johnlewis.scene7.com/is/content/JohnLewis/johnlewisretailreport_2014_071014pdf