By Jukka Aminoff
Terrible gimmicks and revolutionary innovations. Bad investments and exceptional growth. This is the current landscape of the tech industry, which is like a rollercoaster. Everyone is searching for the magic bullet.
The tech industry is moving to a new stage and businesses must be able to adapt to change. Otherwise, they will be left behind. Department stores have received a vast number of disruptions. Increasing competition on the high-street and the rise of internet consumers. Market competition is fierce and department stores must stay relevant. Mid-level department stores are facing the fiercest competition and we have seen department stores confronting major challenges.
Luxury department stores like Harrods and Selfridges have understood the change very well. This is the reason why department stores have created spaces for concessions. This has meant the destruction of the old business model where department stores purchased products into the department store. Nowadays, brands can independently decide their offerings but in some cases, offerings are being coordinated with the management of the department store. Department stores are like market halls where brands compete against each other by giving ultimate customer experiences.
One of the challenges for department stores has always been staying up to date with market trends and collecting market data. Big data is the key for such challenges but big data should be collected quickly to give relevant market information.
This is the reason why artificial intelligence (AI) will play a key part in the department store sector because it can process market data quickly and accurately. AI is a very big landscape, therefore, this article is dedicated to facial recognition.
Most prominent facial recognition technologies can recognize individuals with 70-98 per cent accuracy. This means that eventually every single person can be recognized almost immediately if they have left enough of digital footprints on the internet. So what possibilities does this offer for modern department stores?
From a wider perspective department stores can easily monitor customer flows. Hence, where people are walking. They can see, which brands, products, and departments are the most popular ones. In contrast, they can see, which products, brands, and departments are not gaining customer flows. This helps decision making. How to direct customer flows to passive products, brands, and departments? Should they move, eliminate, or replace some products, brands, and departments?
When a customer enters a department store, the facial recognition system can identify the person and collect valuable information from the internet. Social media accounts can be easily analyzed and other digital footprints.
From an individual perspective, a department store can easily gather information from their clients. What sort of customers do they have? What are their interests and values? What are they buying? How many of them are buying?
VIP clients can be served extremely well because they have permitted access to more detailed pieces of information. Including buying histories. Salespersons will be informed through digital displays that a VIP client has entered their sales are. A salesperson will know their names, client status, and tastes. This will help, fluent customer experiences.
Facial recognition will also ease the pressure of salespersons because after marketing can be done effortlessly. When VIP clients have been browsing certain products without buying. The AI system can remind VIP clients by sending digital messages after they have left the department store. By this way, brands can easily increase sales but the digital buying process must be fluent and frictionless.
Reminder advertising can also be done inside the department store by using digital displays. They remind visiting customers of certain brands and products, which might interest them. For instance, when a VIP client has been browsing for certain brands and products on the website, then digital displays in the department store will remind them. This advertising method should be used delicately because other customers might quite easily see what the person has been browsing. Privacy must be honoured.
Facial recognition powered by artificial intelligence can be a powerful advisor for department stores because they can gather, slice and dice valuable information almost immediately. This helps decision making processes by giving real-time information. But with all collected information, every single collected data might have its downfalls and pits. Therefore, AI should not be followed blindly. Humans must control technology and make the final decisions.
This is the official blog of The Luxury Sales Academy. Articles have been written by Founder, Master of Arts Jukka Aminoff FRSA.