The future of retail engagement lies in biometrics

By Chris Jones, Managing Director of Icon UK Ltd.

The Retail Business Technology Expo 2016 closed last week after another successful show. Over the two days of the show, retail industry leaders and suppliers debated the future of the industry and how best to tackle their most challenging issues. One of the highlights of the show was the panel discussion that focused on retail innovation with industry captains including former BRC chairman, Stephen Robertson, and Executive Vice President of the Boots Walgreens Alliance, Simon Roberts, amongst others.

The challenges of "managing retail innovation, becoming customer-centric and the role of digital" were debated amongst the panel with an emergent theme of omnichannel 'bricks and clicks' retailing presenting the most value for retail organisations. More opportunities to use customer service, create value and grow profit to create competitive advantage exist in-store than through retailing in the highly-competitive, digital space.

With managers and senior leaders across the retail world increasingly relying on data to drive key business decisions, there comes a significant challenge with store-based strategies: the first time a customer identifies themselves in-store is often at the checkout.

The Customer Journey

Online retailing presents opportunities to identify, understand and engage customers as they 'walk through the (virtual) door' with all manner of data, measurements and analytics providing us with information that shapes how we generate online sales. The digital customer journey is mapped precisely and we can now identify patterns before they become trends. We know when someone accesses our website, we know what they do when they're there and we know when they drop-off and when they purchase. Such insights are precious views into how customers perceive our brands, products and the shopping experience.

Back in-store however, what do we know about our footfall? We have a rough idea of numbers coming into stores and we can deduce some data from the back-office systems that power our EPOS. What's missing from our in-store data, however, is the breadth of measurements and precision of data. Without counting visitors in to stores, closely monitoring their movements and what they put into their baskets, this information is scared. Short of conducting exit surveys at the door with every customer, the data we get in-store doesn't give us even a snippet of the information we get from our online customers and we simply don't have the means to collect meaningful or, for that matter, precise data. Like I said earlier, often the first interaction we have with our customers is at the checkout and by this time it is often too late to alter behaviours.

The importance of seamless omni-channel interaction was evident in the show theme at RBTE. Enabling customers to switch between engagement mechanisms (such as online self-service, call centre assisted, mobile and in-store) and their associated media types (electronic or physical), all as part of a single, logical purchase or service process is essential. For most, customer journeys can be frustrating and full of repetition, unwanted and time-consuming identity provision and with a lack of understanding of the breadth of current customer interactions and needs. It is clear that efforts to create coherent, data-driven customer journeys across digital and physical retail spaces are required in order to gain significant momentum in retail business growth. But how?

For me, customer biometrics hold the key to revolutionising the way we engage with consumers.

What are 'biometrics'?

Put simply, biometrics is the measurement and analysis of physical or behavioural traits and characteristics. Technology in this area has rapidly developed over the last decade and, whilst many people immediately associate biometrics with security, the opportunity to deploy this technology across commerce - particularly retail - is huge.

Use of our biometric data could enable businesses to add capabilities at the cornerstone of convenient identity provision and the development of biometric approaches to transforming the customer journey will provide new technologies with which we can measure our individual customers across entire retail estates, both on and offline (think Tom Cruise and 'Minority Report').

If the panel at the 'Innovation in Retail' seminar is a representative sample of our retail business leaders, then it would appear that many senior executives in the industry are unaware of the potential of biometrics. Icon UK sees a future with multi-modal biometrics at the core of personalised service, driven by customer choice, changeable at a whim and delivered in a way that is secure and sits within an appropriate business context.

Using Biometrics in Retail

Examples of biometric use might include customer identification on entry to stores, where automated systems can recognise the number or frequency of visits the customer made to stores or the website, what products they bought, the marketing materials (such as email and social campaigns) they have viewed and interacted with and much more. Tailored promotions, product suggestions and even queue-avoidance could be offered to customers whilst staff receive notifications that will help them to approach and assist shoppers in ways that could provide up- and cross-selling opportunities that, previously, have not existed in stores.

Most of the technology to do this is available today and innovators are utilising this. First Direct Bank are introducing voice recognition, Tesco's One Stop have installed smartphone iBeacons and Carphone Warehouse are benefitting from biometric signatures with faster on-boarding, service and reduced fraud. As was pointed out by panellist Dharmash Mistry (co-founder and CEO of Blow), "disruptive Innovation needs to be shown to customers in order for them to understand it". If they like it - or better, love it - then competitive differentiation is achieved.

Take this across the spectrum of channels and you could see responses to marketing materials triggering calls to contact centres where voice biometrics (which automatically recognise individuals from natural speech) could identify customers quickly, allowing them to place orders without repetitively providing details already held against their profile, such as their home address, local store or perhaps even their payment method.

Such biometrics are more secure than current alternatives when correctly implemented and can be used online or remotely subsequently for additional service provision. The best ones like voice and biometric signatures dynamically map individuals uniquely to their known variable patterns, rather than using static measures (like a fingerprint or signature image) or the fast-disappearing password and pin. They also do this in the background, with the customer informed but not interrupted.

Using Data from Biometrics to Gain Advantage and Support Change

All of a sudden, we're collecting a constant stream of data on our customers from a range of authoritative and reliable sources. Importantly, it's data we can analyse, manipulate and use to gain advantage over competitors. True omni-channel retailing relies on not only only knowing our target customers, but knowing who it is that actually spend money with us in order to provide personalised and memorable shopping experiences that encourage repeat business and - crucially - brand advocacy.

With true customisation and customer value being a 'hot topic' for retailers, this personalised approach to customer loyalty and recognition will revolutionise the way we shop. Biometrics embedded in omni-channel experiences, with customers able to reveal their identity through multiple methods, is the next logical step in developing retail for the future. The benefits will attract consumers to participate in a fair exchange (their information for enhanced, personalised value) and every customer will receive their own very personal experience, continually enhanced as their data profile is built.

We will say goodbye to generic customer journeys and the winners in this race will enable a common brand identity to be promoted in an appropriate manner, correctly formatted for the channel in question, firstly for the customer's perspective and then their own.

Behind the scenes, a total overhaul may be required. In the race, many retailers will fail - unable to change their processes, technology or both. A lot of consolidation is expected and, for some retailers, their core asset value will be driven in the future not only from their store assets but more from their systems of customer understanding, recognition and engagement.