Using visible light communication to improve instore experience and customer satisfaction
In a recent interaction, a week before Thanksgiving, I remember talking to a retailer friend effusively on looking for better ways to improve customer experience. My friend also pointed how the industry must contend with low single digit margins; while finance and technology companies operate in double digits. That’s where it struck me and I started to wonder if this double trouble is the same across the industry?
For starters, I wanted to handle them as two separate issues and then look for a common technology thread that can bind them together. Firstly, retailers have invested in resources, brain power and technology might over the years for bettering customer experience. Starting with improving store layout, technology enabled productive associates, unifying customer experience across multiple touch points, maximum attention has been grabbed in creating personalized experiences. But, what are the proof points that demonstrates these have resulted in a forward leap in customer experiences? Few independent researchers suggest that investments in customer experience projects can result in revenue growth as high as 15%~18% over two years and can contribute up to a 50% jump in customer satisfaction.
Now let’s look at the second issue. The retail industry operates with average profit margin levels of 3% ~ 7%. As retailers look to get these numbers up, any initiatives that has potential to drive down operating expenses attracts easy adoption. Labor, rent, marketing and energy are the top four contributors to this pile. For example, when switching to LED lighting promised huge energy savings potential, it wasn’t surprising for many retailers - small and big alike - to embark alike.
The growth in Visible Light Communications (VLC) in the last few years have added a fillip to the retailer’s double trouble quest. Retailers now see an opportunity where they can leverage their existing investments in LED plus one more additional means to improve customer experience.
LEDs are essentially semiconductors; light sources with a two-lead and emits light when activated. The current and output can be modulated at high speeds flashing on and off; virtually unnoticeable to the human eye. The customer’s phone camera detects the light’s modulation, which can then be accessed by the retailer’s application on the phone. A wireless technology variant, VLC supports high-speed bi-directional mobile communications, akin to Wi-Fi.
Now imagine the possibilities for Rachel, the shopper:
Rachel enters the supermarket. A unique ID emanating from the LED light at the entrance is detected by the camera in Rachel’s smartphone. The indoor positioning app identifies her location. It welcomes her with a message. Rachel gets a curated shopping list derived out of her past preferences, affinity, frequency and quantity of purchase. As soon as Rachel appends the shopping list, from her current location in the shop, a map pops up and guides her to maneuver the store with ease. Rachel suddenly remembers the new wafers that her toddler Josh liked. She searches the online catalog. The indoor positioning advises her to walk two aisles down and turn right. She also gets information on a promotion that’s applicable with the wafer purchase. She has a query regarding the promotion. She clicks on the assistance icon. The closest store associate gets an alert along with the location of the customer. He immediately proceeds to assist Rachel.
In summary using VLC, data enabled LED systems receive and send relevant information on specially built mobile applications carried by customer, with data & insights residing on the cloud to provide immersive experience in the store.
Alternative technologies like Wi-Fi has performance limitations in high dense environments; while Bluetooth requires hardware in form of beacons and a source to power them. VLC technologies are a better bet in terms of its ability to operate in high dense areas, data transfer speeds and maintaining secured transmissions. What is holding against VLC is the magnitude of extra investment required to leverage existing infrastructure. Not to forget the costs of integration. Manufacturers are making their LED lights smarter to improve their affordability and usability for VLC. Indeed, bright times ahead for retailers.