Hits and misses of retail marketing

Physicist Niels Bohr said, “It’s hard to make predictions, especially about the future.” Retail is dogged with false dawns and dodgy concepts. Here are three of the most notorious turkeys, plus three promising ideas which are proving that sometimes it’s the sceptics who are wrong

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.