The Electronic Retailing Association

Article: The Impact of Human Emotions & Behaviour on Omni-Channel Retailing: the Mix of Real and Digital

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Dr. Emanuele Frontoni is Associate Professor, Vice Rector for Digitalization at the Università Politecnica delle Marche, Ancona, Italy.

 

Emanuele Frontoni received his doctoral degree in Electronic Engineering from the University of Ancona, Italy, in 2003. In the same year he joined the Università Politecnica delle Marche to research "Intelligent Artificial Systems", obtaining his PhD in 2006 with a thesis on Vision Based Robotics. At present he has a Post Doc position in the same Department of Information Engineering. His research focuses on applying computer science, artificial intelligence and computer vision techniques to mobile robots and innovative IT applications. He is a member of IEEE and AI*IA, the Italian Association for Artificial Intelligence.

Dr. Frontoni has several international cooperations with SMEs and companies on innovation and future trends, has published more than 120 papers and has been a speaker at more than 40 international conferences, including the MCMS 2017 in Venice.

by Dr. Emanuele Frontoni

with thanks to Marina Paolanti

Nowadays, savvy consumers are becoming increasingly informed, empowered and demanding. They expect a tailored, personal shopping experience as well as they expect to be able to shop anywhere, at any time, and from any location. On top of that, consumers are thorough in searching for the right price and want multiple, exible delivery options. Retailers want to meet these demands, regardless of the channel the consumer is using.

Leading retailers are also expected to be able to offer comprehensive product information, product reviews, inventory visibility and availability. In other words, if they are not meeting these expectations business development should be top priority in order not to lose market share. This is changing the shopping scene that we are all accustomed to.

Consumers, retailers and e-tailers are all playing their part in the move towards omni-channel retail. They are shopping across product segments and demand a consistent shopping experience with one consolidated delivery, regardless of the channel through which the order is placed. Mobile shoppers are not excluding the in-store experience by combining the use of their tablet or mobile device to compare prices, product offerings, and purchasing terms. Retailers should review their omni-channel strategies to stay up to date with consumer needs and the technological advancements are becoming key components to win new customers. In fact, the increased deployment of new technologies such as smart mobile devices and social networks and the growing importance of in-store technological solutions create new opportunities and challenges for retailers. Therefore, the evolution of new technologies, the changes in the consumer’s behaviour are the main factors that determine changes in the business model in the distribution field. 

Heatmaps in retail planning allow to gain a visual overview of product data and to improve for example the planogram strategy decreasing the shelf out of stock situation.

The more information retailers can collect, analyse and understand about various areas of their organization, the easier it is for team members to make proper business decisions and achieve the goals they have in place.

Retailers look to business intelligence software to analyse raw data in various areas, including in-store management, merchandising, supply chain operations, employee retention and recruitment, customer support and the e-commerce site. In some instances, retailers use numerous business intelligence technologies at once to empower employees to understand the excessive amount of data that flows through each process. 

Using real data in real time to analyse store environment in a novel way. Observing, measuring, and informing clients on store performance indicators as shelf availability, out of stock, planogram respect, consumer behaviours and, of course, about all interactions between players involved.

To stay competitive in this big data context and in this multi-channel environment, businesses need to identify and leverage the most relevant data along the entire path to purchase. In the past, companies have developed channel or product-specific support models which compete for supremacy. However, in the eyes of the customer, it’s a single organization and the result is a diminished customer experience. Instead an omni-channel customer service approach is required that blends both digital channels (mobile, social) and traditional channels (call centre, branch/stores).

In this approach, the different support touchpoints are designed to complement each other, allowing users to switch between channels without the need to repeat information. Furthermore, multiple channels can be used simultaneously (for example, browsing a physical store while ordering the goods for home delivery from a mobile device).

The explosion of digital services mean that organizations need to understand the entire customer journey and not just optimize contact points individually. Building unified and pro-active cross-channel services will deliver differentiated customer experiences that drive loyalty and repeat sales. 

Out-of-stocks are the most important overall element that impact satisfaction with the grocery trip experience. Out-of-stocks situations cost retailers and brands sales, with 50% of those shoppers going to a different store to purchase the item; 38% foregoing the item; 14% buying a different item at the store instead; and 12% buying a different brand or size.

Connected devices enable service teams to monitor equipment remotely and analyse device data to predict possible failures. Advanced analytical techniques offer valuable opportunities to deliver better services and improve efficiency.

The mainstream adoption of technology has created greater transparency of business practices. Organizations can better leverage their customers as a resource. A customer community can act as a self-help network, generate valuable user content and provide a wealth of product development ideas. Service teams should play their role in stimulating and growing customer communities.

Today, online channels are a critical aspect of the customer journey. The quality of user interfaces in this channel significantly influences customer perceptions. Investing in user experience throughout the implementation of digital initiatives can improve customer satisfaction and brand recognition. Moreover, different customers will have different communication preferences.

Measuring the consumer habits is a crucial part of any business. It is important to know what the consumer wants and how he acts is vital in terms of product design, and later marketing.

Omni-channel must enable these different touchpoints to work together in multiple ways in order to support the customers preferred journey.

Another feature that has been taken into consideration in the last years is the emotion. Emotions are a key part of all stages of the retailing experience, and retailers have to not only understand and predict customers’ emotions, but also shape retail environments to cultivate desired emotions and eliminate undesired ones, to deliver brand-consistent experiences. To do that, retailers need to understand consumers’ emotions, their disposition as well as the emotions triggered in the shopping process and how those emotions affect shoppers’ behaviour.

For this purpose, the devices are able to track micro-expressions using facial recognition, as well as decoding race, age and gender. By monitoring biosignals, such as blood pressure and heart rate, these are able to build an emotional profile of the wearer. A specific software scrutinises shoppers’ movements and facial expressions for surprise, dissatisfaction, confusion or hesitation. They also need to recognize the impact of the emotional aspects of employee-customer interactions, employees’ emotions, and the emotional culture of staff teams given that the customer-facing staff members are a crucial part of the customer experience delivery.

...retailers need to understand consumers’ emotions, their disposition as well as the emotions triggered in the shopping process and how those emotions affect shoppers’ behaviour.

In addition to emotions, using social media, it's now possible for retailers and tech companies to understand the sentiment of their customers in real time, finding out how they feel about the products on store shelves, store layouts and commercials. With sentiment analysis using natural language processing (NLP), businesses have the opportunity to find out what their customers are saying and how they feel about the products they’re offering. Sentiment analysis relies upon NLP, text mining and data mining capabilities to find information on consumer demand. 

A field of machine learning and artificial intelligence, NLP allows machines to read and derive meaning from human language. However, because it's done through machines, it develops a way to analyse millions of posts that are uploaded every day to social media platforms like Facebook and Twitter. Sentiment analysis reads through the text to see whether it's positive, negative or neutral. It can also take into account the meaning of the words as well as the specific context of what was said.

The reason that sentiment analysis is becoming popular for retail and technology businesses is because customers increasingly express their desires, thoughts, preferences and frustrations online. Sentiment analysis can tell businesses how deeply customers feel about products, as well as which features are responsible for those feelings. These insights will ultimately help retailers to achieve sales and branding goals by optimizing their marketing, employee management and training, and thus customer experience.