Dan Cantorna, Director of Data Innovation at Collinson.
Over the past year we have seen advances in facial recognition and next-generation voice technologies which provide an ever-improving Artificial Intelligence-based (AI) toolkit for loyalty programmes. These newer services have been embraced by consumers, making them attractive to retailers as useful tools to help improve their customer relationships and increase loyalty. While no piece of technology is in and of itself the facilitator of loyalty, the combination of these solutions offers a new way to communicate a meaningful loyalty strategy in the modern era of retail. AI-reliant technologies can change the retailer-customer game significantly and be a real differentiator for the smart brands that are early adopters.
Last year, smart, AI-powered speakers from Amazon and Google captured the imagination of consumers around the world and many homes now feature a digital assistant. Research house Ovum predicts that, globally, digital assistants will exceed 7.5 billion active devices by 2021 – more than the number of humans alive today. Clearly people like voice interaction. It’s unlikely that voice will become as common as touch, simply because of privacy concerns in shared spaces, but it is certainly changing how we interact with the digital world.
Fairly human interaction
There have already been some significant advancements in automated customer interactions. Chatbots have been deployed in call centres and when someone calls or opts for online chat they can have a human-like interaction with an AI-powered bot. Many customers would rather use a chatbot online than ring a customer care number where they can be put on interminable hold before reaching a person. Of course, all this technology needs to be managed and handled by highly competent human staff, but the volume of queries to be dealt with can be greatly streamlined via these automated solutions.
Increasingly we see machine learning and deep learning techniques creating algorithms that do specific things, and this will become very powerful, creating a host of possibilities in the retail loyalty industry. Retailers can ask questions such as “how many people are coming into my store?”, “how happy are they when they arrive compared to when they leave?” or “which parts of the store have the largest flow and attract the most people?” and gain insights from machines which will then become part of mainstream operations, allowing managers to optimise their stores accordingly. This is already being thought about for the near future, as in-store security cameras are ubiquitous and can help facilitate associated processes.
Blending online and offline profiles
Retailers also have the opportunity to link together someone’s offline profile with their online one through facial recognition, giving them the ability to recognise someone in store and immediately connect them to a whole load of online activity and behaviours. This will allow them to deliver a more personal experience in a much deeper and meaningful way than they’ve ever been able to before.
This is what could be seen as the first few steps in reaching the “holy grail” of seamlessly linking a customer’s online and offline customer experience – something that has been contended with for a long time in loyalty. Industry players have tried promoting QR codes and in-store apps, in-store Wi-Fi and a host of other tactics to get people to identify themselves. Now though, with their expressed permission, it’s possible to identify people and tailor the experience to them immediately.
To put this into context, imagine a customer arriving at a hotel and they are a platinum member of your programme. If you are immediately able to identify them as a more valuable and important customer as their car pulls up, it gives your staff the ability to quickly respond with a tailored experience that meets the expectations of that guest, and this is extremely powerful. It can make your brand easy to be loyal to and an obvious choice for repeat visits. Brands getting ahead of the curve with this are going to have a huge advantage over late adopters.
Privacy and consent
Obviously, there are several privacy and security implications as-well as GDPR challenges that need to be thought through and overcome, but I believe people will choose to opt in to closer retailer identification methods because they will see the value in the experiences it offers. I don’t think we’re quite there yet, though, and this will be something that will evolve over time.
GDPR spells out that consent must be given and that it must be specific. The regulations also mean that companies cannot sell the data they have from customers, which will improve trust and customers’ willingness to participate. The importance of trustworthiness in terms of data is obvious when considering the problems Facebook has been having. In contrast, Apple sells high-end devices and gathers vast quantities of data, yet it does not pass that data on; it is there to improve the experience of Apple’s customers.
Be open and honest
Brands need to be upfront about what data they are going to use and what benefits customers are going to see as a result. Brands shouldn’t ask customers for a profile picture in return for a discount voucher, then once they’ve complied with the request, tell them they are now going to use it for facial recognition in all their stores as it will send the wrong message.
As with any relationship, it’s important to be honest with people about what your intentions are for their information from the start. If the capabilities change, there is no foreseeable challenge in asking for permission again further down the line to use the data you have in a different way. If your loyal customers have seen value from what they have already shared, they will likely be happy to allow you to add new capabilities. It is about being clear, precise and honest about what the intentions are from early on in the process. This empowers customers to actively be a part of the conversation, rather than unaware recipients of it.
By cultivating customer trust in this way, while improving the service you offer through a targeted use of available data, customers will feel their favoured brands truly understand them and actively want them as customers and advocates. There are undoubtedly, challenges with customer data, but with the selective use of newer technologies, the opportunities are vast and are there to be ceased by savvy brands.