Hits and misses of retail marketing

MISSES

QR CODES

Just six years ago, the hyper­bole around these boxy bar codes was breath­less. A Retail Week colum­nist bab­bled: “An inva­sion seems to be under way, spread­ing across posters, print ads and now into retail­ers’ stores, and on to the very pack­ag­ing of prod­ucts. What am I talk­ing about? QR codes, those small box­es full of black and white dots that seem to have spread like a virus across the UK.” Well, like a virus, QR codes in mar­ket­ing are debil­i­tat­ing and best avoid­ed. Why? QR codes are slow. The con­sumer has no idea where the embed­ded link takes them. They look ugly and take time to scan. For air­craft check-in and logis­tics pur­pos­es, QR codes work pret­ty well. But mar­ket­ing? Alas, no.

Les­son: A prod­uct can look futur­is­tic with­out being the future.

PROXIMITY PUSH ADVERTISING

Retail­ers loved the idea of send­ing vouch­ers to con­sumers’ phones as they walked past a store. Of course they did. The prospect of tar­get­ing a con­sumer when they are in posi­tion to buy is mouth­wa­ter­ing.  For exam­ple, in 2011 Red Bull pinged out coupons to any­one pass­ing by dig­i­tal sig­nage at point-of-sale ter­mi­nals via Blue­tooth. Con­sumers saw it dif­fer­ent­ly. Get­ting mes­saged by ran­dom brands is annoy­ing. Leav­ing Blue­tooth on for third par­ties to con­nect to is a secu­ri­ty risk. Push adver­tis­ing still isn’t dead. Apps are using GPS to adapt behav­iour and trig­ger noti­fi­ca­tions. Google Near­by ser­vice makes it sim­ple for devel­op­ers. Get­ting it right though is seri­ous­ly hard.

Les­son: Spam via Blue­tooth is still spam.

GROUP BUYING POWER

Buy in bulk and you can nego­ti­ate a dis­count. This con­cept led to a pletho­ra of group buy­ing dot­coms which promised con­sumers mar­vel­lous dis­counts. The prog­en­i­tor was LetsBuyIt.com. This Swedish web­site allowed con­sumers to gang togeth­er to buy music sys­tems and clothes at reduced prices. The site raised stag­ger­ing sums in the orig­i­nal dot­com bub­ble. Imi­ta­tors arose, such as Comu­nia and Mob­Shop. None pros­pered. Lets­Buy­It went bust in 2001. Since then the idea has tempt­ed entre­pre­neurs, but the only mod­el to work has been based on pro­duc­er-craft­ed dis­counts. Groupon, Wow­ch­er and Liv­ing­So­cial are doing well.

Les­son: Not all retail busi­ness mod­els will work.

HITS

CHECKOUT-FREE SHOPPING

The biggest pain of going to a shop is the check­out; stand­ing in line, then scan­ning goods and repack­ing. What if we could just walk out the store hold­ing our pur­chas­es? Ama­zon Go promis­es just that. Accord­ing to the com­pa­ny: “Our check­out-free shop­ping expe­ri­ence is made pos­si­ble by the same types of tech­nolo­gies used in self-dri­ving cars: com­put­er vision, sen­sor fusion and deep-learn­ing.” The result is “just-walk-out tech­nol­o­gy”. Let’s be clear. This is a real­ly dif­fi­cult goal to achieve. Amazon’s approach requires com­plex algo­rithms to fuse cam­era footage togeth­er. The neur­al net­work approach is beyond most retail­ers. Ama­zon is also exper­i­ment­ing with radio-fre­quen­cy iden­ti­fi­ca­tion or RFID tags to cor­rob­o­rate the sen­sor read­ings. There are losers, includ­ing the army of staff made redun­dant. How­ev­er, when this tech­nol­o­gy comes of age, it’s a pro­found game-chang­er for retail.

Les­son: Queues will soon be his­to­ry.

DRONE DELIVERY

In Feb­ru­ary, UPS test­ed an eight-rotor drone called Horse­Fly able to car­ry pack­ages of 10 pounds for 30 min­utes. It’s an autonomous unit as no human needs to steer it. Horse­Fly recharges on the roof of an elec­tric deliv­ery vehi­cle. Dur­ing dock­ing the UPS dri­ver can load it up with pack­ages. Fans say drones like this are the future of last-mile ful­fil­ment. The Unit­ed Nations has used drones to drop con­doms in rur­al Ghana. A Swedish exper­i­ment test­ed the deliv­ery of defib­ril­la­tors by drone. The study author said: “We may increase chances of sur­vival sig­nif­i­cant­ly by deliv­er­ing a [defib­ril­la­tor] with­in the very first min­utes.” There are hur­dles. Bad weath­er can affect drones. The law is restric­tive. And house­holds may resent the whirring over­head. But the ben­e­fits are obvi­ous, includ­ing rapid deliv­ery, low­er envi­ron­men­tal impact and new busi­ness mod­els unlocked. The tech­nol­o­gy is ready to go.

Les­son: Drones are on the cusp of going main­stream.

PROGRAMMATIC ADVERTISING

eMar­keter esti­mates near­ly four out of five US dig­i­tal dis­play dol­lars will be pro­gram­mat­ic this year. The mar­ket will rise by 50 per cent to $46 bil­lion in 2019, com­pris­ing 84 per cent of online ads. And to think, with­in recent mem­o­ry adver­tis­ers relied on untar­get­ed ban­ner ads placed by humans. Pro­gram­mat­ic auto­mates the media-buy­ing process. A sub­set is real-time bid­ding. With this, spaces are auc­tioned off in mil­lisec­onds. Buy­ers fac­tor in dozens of vari­ables into an auto­mat­ed bid. Fac­tors include the consumer’s oper­at­ing sys­tem, cook­ies, loca­tion, com­pa­ny inven­to­ry and even the weath­er. The key is the stag­ger­ing amount of infor­ma­tion con­sumers offer retail­ers; brows­ing his­to­ry is eeri­ly acces­si­ble. It is even pos­si­ble to do “state­less track­ing”, with­out cook­ies, instead using things like bat­tery lev­el, avail­able fonts, exten­sions and oth­er seem­ing­ly irrel­e­vant fea­tures.

Les­son: Ad buy­ing will keep get­ting more per­son­alised.