Geo-intelligent shopping to help retail revival

Published on Mon, 05/03/2012, 08:15:51

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Retail executives must ‘know their place’ if their businesses are to successfully emerge from the sector’s worst performing year in a generation, geo-retail specialist Esri Australia said.

Dama Kumarasingham, a leading consultant at location intelligence specialist Esri Australia, has urged the sector to exploit new location-based technologies to seduce shoppers back to their stores after recent ABS figures showed retailers suffered their worst year since 1984 – including a 0.1 per cent fall in turnover during December.

“Retailers have been struggling with poor trade for at least the last two years due to the flow on effects from declining global economic conditions, the increasing cost of operations and the rise of online spending,” Kumarasingham said.

“This trend continued with a very disappointing festive season and has been compounded by the strong Australian dollar, the Reserve Bank’s decision to hold the official interest rate this month, and several banks’ moves to raise their rates.

“Retailers can’t afford to rely on a respite from tough economic conditions to drive a revival in the industry – they must rethink their approach to how they draw in customers by leveraging the next wave of Geographic Information System (GIS) technologies.”

She also said the growth of online stores has changed customer shopping behaviour, and the only way retailers could compete was to provide a customer experience that could not be reproduced online.

“Geo-locator technology delivered through the well-established science of GIS can re-establish the store-front as a key advantage and critical point of difference,” Kumarasingham said.

“Australia has more smartphone users per capita than any other country in the world with the exception of Singapore and bricks and mortar retailers can take advantage of this.

“Retailers need to connect directly with customers and entice them into their stores by using GIS to deliver personalised marketing straight to the palms of shoppers’ hands as they move within the vicinity of their stores.”

For example, digital catalogues containing only items a customer has previously shown preference for can be delivered with more precision and timeliness than the traditional scatter-gun approach of home-delivered catalogues.

A shopper could receive a text when they walk past a cosmetic counter, alerting them to a special offer on their favourite brand of moisturiser or recommending a suite of complimentary products.

“The potential for this kind of targeted, personalised marketing is limitless,” Kumarasingham said.

According to Kumarasingham, retailers can use loyalty programs to their benefit to find information about their customers’ purchasing habits needed to make location-based marketing successful.

“With GIS technology, this type of individualised marketing is already possible – and necessary – for retailers wanting to take customer engagement to the next level,” she said.

“Much of the customer data retailers have access to is already location-related, such as where customers live and where they choose to shop.

“GIS technology can combine these geographic elements with other types of customer information, such as salary, age and purchasing decisions like what they buy and when they buy – exposing new insights into consumer spending habits and enabling more targeted marketing.”

Locally, KFC, Westfield and Commonwealth Bank have already started to trial this approach.

“Retail executives must explore new location-based technologies to reinvent the old-fashioned shopping experience into something fresh and exciting,” Kumarasingham said.

“We are on the threshold of a new, smarter era of location-based marketing which will transform the shopping experience and is the approach brick and mortar retailers need to drive sales through to the register.”


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