Ventana Research Analyst Perspectives

One aspect of living in downtown Chicago is that there’s always something going on. But as distasteful as the subject matter of certain local events can be, some proceedings can inspire perspectives on a number of topics. One that occurs to me is how the retail industry can apply the new generation of mobile and location-based technologies not only to shape the customer experience but even rescue it from challenging situations. On Nov. 30, 2015, the Chicago Tribune reported that the Black Friday protests on the city’s Magnificent Mile cost local businesses 25 to 50 percent of their expected sales. While protestors have a constitutional right to free speech, business operators also had an opportunity and a responsibility – to proactively engage customers before, during and after the tumultuous Thanksgiving holiday weekend.

As many of us will recall, the events that led up to the protests in Chicago on Friday, Nov. 27, 2015, were tragic. News was made when a dashboard camera video surfaced showing a Chicago police officer fatally shooting 17-year-old Laquan McDonald. As a result, the officer in question has been criminally charged and is awaiting trial. When the video was released, tensions permeated the city. Emotions ran high, and protests became a part of the city’s downtown landscape. But let’s be clear about that Black Friday on the Mag Mile in Chicago. Retailers and many other business owners in that high-end shopping district knew that protesters would take to the street that day in an attempt to halt commerce. Retail operators also knew that their customers would share that busy street. Nevertheless, I know of no business that chose to close in advance of the protests. Moreover, I’ve yet to learn of any business that made plans to protect their customers’ collective holiday shopping experience, let alone secure the revenue that might accompany it. In my opinion business operators on North Michigan Ave. failed their customers and stakeholders on that Black Friday.

Media reports claimed that the Black Friday protests in Chicago were peaceful, and a festive atmosphere even accompanied one local television reporter’s account, as she proclaimed that the stores were open and people are shopping! But in a few hours, the consumer shopping experience dramatically changed. As seasonal rains came that evening, protestors systematically cut off street-level access to retail locations, leaving bitter customers out in the cold. Stores began to lock their front doors. Many, including globetrotting tourists, stood confused and abandoned. If retail operators had anticipated this scenario, they could have thrown a lifeline to marooned shoppers by developing a technology-assisted customer experience plan that could have rescued the situation and even saved a substantial loss in holiday sales.

The retail industry’s keys to meeting the challenges presented by Chicago’s Black Friday protests should have consisted of five components: segmented and robust customer data; a strategy for mapping local consumer shopping territories via geo-fencing and real-time analytical insight into individual location information; two-way acceptance of mobile communications; a customer-centric technology infrastructure; and a consumer team that possessed the dedication and creativity to respond quickly to rapidly changing market conditions.

As Black Friday events began to unfold, affected retail operators should have executed a communication plan that immediately addressed known local customers. Advisory communications could have been sent via email or text message to local residents, holiday shoppers or not. Those personalized messages could have been reinforced by notices posted to all available social media channels. Moreover, retailer operators in tune with their mobile customers could have reaped the benefits of acting on customer proximity and location analytics. Retailers with robust mobile customer relationships could have utilized geo-fencing technology and intelligent consumer apps to immediately interact with those who were inside the protest zone and in close proximity to one of their stores. Any interactive mobile customer who became locked inside or outside a store, or who was connected to a retailer equipped with beacon technology and a customer experience platform augmented with real-time location analytics, could have been guided down alternate paths to open and accessible locations, optional online services or even a secure personal refuge.

For retail operators interested in the ability to quickly engage customers in the midst of any rapid change in local conditions or market dynamics, the overarching challenge has become threefold: securing a customer base that will opt in to mobile technology in advance of receiving real-time communications; employing talent that can creatively craft breakthrough notifications; and adopting a technology environment focused on making the most of opportunistic omnichannel customer experiences.

Indeed, retail operators who proficiently use next-generation location-based and mobile solutions can make the most out of every individual interaction and stand to benefit from measured increases in sales, service, customer satisfaction, organizational alignment and competitiveness. Vibes Media is one technology provider of products for GPS-enabled, location-aware mobile devices that can access latitude and longitude coordinates near stores in order to trigger important notifications. Contextual marketing tools from Pitney Bowes allow marketers to deliver messages to customers at any time and place, across preferred channels of communication. Moreover, one can imagine how geodemographic segmentation offerings from ESRI could have been used to proactively beat competing Chicago retailers to the punch in the hotly contested local shopping arena. Our benchmark research on location analytics finds a variety of ways in which such systems can benefit businesses; improving the customer experience is the one most often cited (by 20% of participants).

The pace at which retailers are using the new generation of interactive technologies to revolutionize the mobile customer experience must increase. The volatile situation in Chicago is far from over and may be replicated in other cities. It is only one example of what any retailer anywhere and its customers could face in the near future. Some mobile technology services have been designed to support customer loyalty initiatives, and they should be rolled out in the effort to generate sales and  revenue, as well as being implemented in the service and support of customer communities. For retail operators who possess the imagination and initiative to employ the mobile technology required to adapt to unforeseen business situations, there are no limits to what they’ll be able to do for their customers and accomplish for their business, even under seemingly insurmountable stress. The revenue they’ll be able to source and the customer loyalty they’ll be able to report as a result of these efforts will be proud measures of industry success.

Regards,
Tony Compton
Vice President and Research Director, Sales and Marketing

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