In the era of reinvented retail, the idea of building the proper personalized experience for the consumer has become such a common piece of the conventional wisdom that at times it risks becoming a cliché — or, at least, a rote response.
Question: “What do we need to do to attract customers?”
Answer: “Present them a personalized experience.”
Question: “OK — how do we do that exactly?”
Answer: “With digital and other stuff, they all have smartphones.”
Question: “OK — but how exactly?”
And therein lies the rub.
While making every consumer feel like an especially high-value unique snowflake packed with commerce potential would be ideal, merchants — especially large-scale physical players like Sears, Kohl’s, Target and the like — are dealing with a ton of consumers. Consumers that 95 percent of the time don’t have the specially designated app of the store they are shopping in and who move in and out of stores (or fail to move in and out of stores), largely invisible to the shops that cater to them.
Now, this is not to say the situation is hopeless or unsolvable; in fact, helping physical merchants build that better experience by giving them better access to data has more or less been the name of the game for RetailNext since its inception. Its MO is to provide merchants with actionable insights via its SaaS platform that collects and interpolates a wide variety of shopper-centric data streams.
“Our focus has always been in in-store analytics. We had all this data around the total number of people coming in, where they go, where they spend time,” Alexei Agratchev, RetailNext CEO told MPD CEO Karen Webster in an interview on Monday (Oct. 12). “We see customers who are willing to opt in, and we know a lot about where they went, what they did and how they used their phone while they were [in the store]. We want to make the retailers able to use that data to interact one on one.”
The problem, Agratchev told Webster, is even with all that data in hand, interacting personally is not so easy.
“Retailers don’t always know how to do that well.”
But, he said, when he encountered Pikato for the first time, there was the proverbial head slap: the knowledge that there was a solution to fill that gap for the retailer, without the steep learning curve or internal IT hurdles to overcome.
“[Pikato] creates a frictionless platform that could quickly take whatever data was available — the CRM data, Web traffic app use, social media participation — and use all of that to enable retailers to create a better, more personalized in-store experience in a matter of days. It was pretty awesome, and we found it really fit our story and our strategy really well.”
Agratchev further explained that since RetailNext delivers “trillions of data points from over 3 billion anonymous shopper visits annually,” with the addition of Pikato, those data points can now empower the delivery of relevant, personalized communications and promotions to shoppers as they shop.
What those personalized communications and promotions look like — what form they will take — depends heavily on both the merchant and the consumers they are courting. Pikato is all about personalization and eschews the one-size-fits-all approach that turns off consumers. For some retailers, that will mean leveraging their internal Wi-Fi networks to connect with consumers and communicate with them; for others, Pikato creates SMS-based calls to action. It depends very much on what the retailer is, where it is in its process, whom it is already working with and what it is going for, Pikato Cofounder (and former CEO) Jesus Sanchez told Webster.
“The platform is URL-based,” Sanchez noted. “The retailers have an ecosystem of vendors. We are vendor-agnostic. We say whatever you’re using, we can work with. Every interaction is personalized to the user through all the channels.”
Moreover, Sanchez noted, the Pikato platform is a smart piece of learning software that gets smarter the more often it engages with consumers. Every time the consumer logs in, Sanchez further explained, the information becomes more and more relevant, something he feels is critically important given all of the data and promotions swirling around the shopper in and outside of the store.
Pikato makes it possible for their retail partners — with millions of SKUs, items and promotions all on their websites at any time — to cut through it all and identify the small number of things that a consumer is likely to engage with. Then, present them with a different set of items for each individual consumer.
“The opportunities to acquire consumers are all there. The Facebook pages, the local pages, it’s all there. The retailer has to make sure that when the customer engages with those assets, the consumer gets a relevant call to action,” Sanchez said, “and converts interest to sale.”
Sanchez says that the proof is in the conversion. According to its AB testing (which stacked Pikato’s personalization platform against more traditional mobile offerings that show all customers the same thing with weekly variations), the company is getting pretty good at getting those 20 objects up and in front of the customer.
“[Pikato] is the 1,100 percent conversion rate pick-up — that is how many more people following through on the mobile offers buy items they are presented in the store.”
And, it bears mentioning, those are big conversion pick-ups for big merchants; Pikato didn’t achieve 1,100 percent because its typical partner only had two customers and so a big growth rate was easy to snag. Sears, Kmart, Target and Kohl’s are all on its customer list, and those big conversion pick-ups translate into mega-sales.
And though all those merchants are different, the lesson for all of them is the same, Alexei Agratchev noted.
“We can not treat everyone as one market segment.”
And, Sanchez noted, you also can’t expect the marketing departments at major retailers to suddenly morph into tech enthusiasts who want nothing more than to enter the IT black box and spend the next 18 months to two years designing and implementing a complex personalization platform.
“We give one marketing automation system, one personalization engine that is very easy to deploy. We don’t have 10 different integration points and 10 different APIs. We have some URLs,” Sanchez explained. “We can get this live and fast. We don’t require IT involvement. A retailer can get [Pikato] up and running in a week and not even mention it to IT.”
Though the acquisition has been announced, there are details still to settle. Financial terms of the deal have not been disclosed as of yet but are expected to be settled by the end of the quarter. The two firms anticipate working closely together, particularly as the most wonderful time of the retail year — holiday shopping — is set to start any minute now.