The smarter reseller's guide to savvy retail solutions

Radio waves

A surprising hookup was using data to target ads on internet radio – imagine people listening to Spotify and hearing an ad for your customer’s shop as they go past. 

And there’s no reason it can’t work in Australia, she says: “It does scale outside the US. It requires the right relationships; we did a pilot in India where things went very smoothly.”

Over the next year Schewel will run beta pilots with partners, “looking at how they use it, the value they create and value they see”.

“A year from now, we’ll have a web application for people to sign up as a subscription service to get data for the regions and corners they’re interested in.”

Such data is valuable for shop site selection and will put new metrics under retail strip leases.

Another vendor bringing analytics into the shopfront is video surveillance company, Axis, on which platform third parties have built systems to break down shopper behaviour. For instance, heat mapping and traffic flows show shopkeepers the busy parts of their store or where to improve their layout, says Axis Australia country manager Wai King Wong.

“Video systems can prove that certain areas have higher traffic flow so they can showcase it to vendors – that this aisle is more popular,” Wong says. “All this is because they’re trying to maximise the space.”

Face recognition may in future link private video surveillance to law enforcement to identify, for instance, known shoplifters or their behaviours. Following the recent Melbourne murder of ABC staffer Jill Meagher, which was solved with the aid of a store camera, voices were raised arguing for networking private cameras with police databases and the IP-nature of modern cameras now makes it technically feasible.

Wong says resellers have an opportunity to upgrade their customers’ black and white CCTV that records to analog tape with IP systems that backup over the network and offsite. A good time to have such discussions is as the NBN rolls through an area because it lifts upload speeds and provides quality of service.

“In future, we see them using cloud or hosting solutions, cameras or video footage all hosted in the cloud, just pay by a service,” Wong says.

Sentiment analysis, understanding a speaker’s attitude to a topic by analysing their language use, is another big data area that exercises the minds at Australia’s leading ICT lab, NICTA.

Technology strategist Dean Economou says broad demographics are giving way to an intimate understanding of the customer.

“Everyone is an individual and patterns of behaviour will tell you more about what someone is going to buy than the fact that they are 45-year-old male,” Economou says.

“The software is very good at detecting similarities and next time you see data that looks like a pattern you can (act on it).”

In another example, NICTA analysed reporting of the milk price war between Coles and Woolworths last year in a way not possible using, say, Google News alone.

“Coles gets mentioned a lot but the sentiment is negative; Woolies was mentioned less but the sentiment is positive so if you were head of marketing for Coles you would ask ‘What is Woolies doing right and Coles doing wrong?’

“So you can very quickly zero in on whether something is a negative or positive perception of you and for a beast as big as Coles or Woolies that’s (important).”

And the advent of Google MapReduce (Hadoop) has opened big data to those outside of the fast moving consumer goods (FMCG) giants and government, says NICTA researcher Scott Sanner. The challenge for resellers writing bespoke systems is adapting to a distributed, massively scalable methodology.

“You need to know how to make an algorithm run efficiently over 10,000 machines and then combine that,” Sanner says.

NICTA released its Scoobi library, used by the likes of Walmart, under an open source licence to help developers more easily code for Hadoop. Many retailers fall down because, having got a customer into the store, they don’t have stock.

“If you look at reasons why people don’t buy then out-of-stock is a major one; inventory control is vitally important,” says Motorola’s David Fenner.

Motorola has sold about 2500 of its handheld MC55 devices into Australian retail to counter showrooming’s effect because, once a customer leaves, they are unlikely to return.

“It empowers the employee to negotiate down to a certain level based on the company’s metrics or margin requirements and make a sale on the fly they may not have made previously,” Fenner says. 

Free in-store wi-fi is another way shops can claw back advantage by identifying which products the customer is browsing online and then, potentially, giving the retailer the chance to offer a special deal to close the sale. And customers’ MAC addresses are captured so they are identified on their return visit and a profile of their interests built up over time, allowing the retailer to proactively make special offers, Fenner says.

Loyalty marketing

Oracle is also wrestling with identification of customers, turning to the OAuth system favoured by the likes of Facebook and Twitter to ease customers’ interactions with brands, says the database vendor’s sales director Richard Watson. An example might be a company such as Virgin, which is a virtual provider of various services.

Watson says bigger retailers are branding services outside their traditional sectors, for instance, a supermarket providing credit cards, mobile phones or airline tickets. 

“If I’m a consumer shopping online I want to be able to buy with a loyalty scheme and then buy insurance as a loyalty customer,” Watson says.

“Those brands are needing a greater association with the customers they serve – they’re moving from an anonymous transaction into a relationship where they offer higher and greater levels of service but they need to build higher levels of customer data.”

Founder of e-tailer Kitchenware Direct, Peter Macaulay, is the first local user of NetSuite’s cloud system SuiteCommerce, which he uses to market to customers.

“The single view of the customer seems really easy but for us email marketing is important,” MacAulay says.

“We can put our customers into buckets that they haven’t purchased for zero to 60 days, 60 to 90 days and then test offers – do we need to send them a 5 percent offer, free shipping or bonus gift, and we can test against all the different buckets very easily but to do that with disparate systems would be complex.”

Such a system is light years ahead of creative entrepreneur Fox, but she sees the possibilities.

“We talked about writing down everybody’s email addresses when they’re in the shop so we could send them a newsletter or updates but we don’t and that’s a big downfall because stock’s always changing over and there are workshops to do and we’re looking to hold events,” she says.

“So we should build up a database of all these people.”

Macaulay says the big challenge in the Australian market is pure-play retailers working with brands to leverage themselves online. 

“We understand online marketing and really sell that to the wholesalers. We’re moving away from a discount website where people just want a bargain.

 “In terms of pure-play e-commerce we’re right up with the US but in terms of multichannel, we’re behind.”

He says that when big players like David Jones or even Harvey Norman get behind it, there will be widespread uptake.

“If Amazon comes to Australia, that’s a good thing, because with the halo effect of people becoming comfortable online, it’s going to be great.”