Contextual Commerce Connects Shoppers and Places

by Raymond Pucci 0

Many merchants look to send offers and discounts to shoppers that happen to be in the right place at the right time. As the following article describes, sensors and beacon technology allow retailers to connect with their customers using a more targeted approach.

Last month, Amazon launched its long-awaited Amazon Go store in Seattle—a brick-and-mortar shopping experience that merges technology and physical reality in a whole new way. By scanning their Amazon Go app, shoppers can choose what they want and leave the store without ever stopping to pay for their items. A dream for introverts—and busy people—everywhere, Amazon Go allows shoppers to complete their shopping experience without ever having to interact with another human. But its impact is also much bigger: it’s symbolic of the fluid nature of today’s retail environment, one where online, mobile, and physical environments roll together to create an omni-channel experience for shoppers.

Can you imagine walking into your favorite store and getting a personalized notification on your phone with a coupon for something you regularly buy? Or pulling up an app on your phone that will tell you the exact location of a product you want to buy and how many there are on the shelf? More retailers are using the IoT to connect with consumers like this, which will ultimately revolutionize the way we shop—not just in Seattle, but all over the world. In fact, I’d say consumer demand has been heading in this direction for quite a while, and the IoT is giving retailers a way to catch up with their increasing omni-channel expectations.

Using sensors and smart beacon technologies in-store, retailers can connect with shoppers in a more personal way as they shop, tailoring their experience with coupons for items they typically use. They might even proactively alert a customer when their favored location is out of a certain product they regularly purchase—offering info on the next closest location to find it—or creating a “click to purchase” to instantly order the item and have it shipped directly to the user’s home. If you’ve ever used the painfully clunky, and now defunct, Target Cartwheel app, this might seem farfetched to you. But technology promises to create a more seamless experience for customers that will save customers time, while also building brand loyalty.

Contextual commerce leverages a shopper’s location and preferences with nearby retail shops and services. As the cost of beacon technology decreases and mobile phones now ubiquitous, merchants can target customers who are already in their immediate vicinity. For shoppers that agree to be enrolled, contextual commerce will become an additional sales channel for merchants to capture sales that may not previously have materialized.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisorygroup

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