Contextual Retail: Insight at the Point of Action

While revenue from physical stores is still more important than online shopping, various drivers are forcing retailers to use technology more innovatively to understand the shopper’s context and provide a tailored shopping experience that more closely resembles the online one. Accenture Technology Labs delves into the issues and provides scenarios of how context-based retail could work.

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Over the past decade e-commerce has emerged as a widely used method for purchasing products, and now provide an array of useful shopping tools (e.g., product recommendations), that create an efficient shopping experience all from the comfort of home. And yet, despite its popularity and convenience—and the large number of innovations it has developed—e-commerce only accounts for a small portion of retail revenue for many retailers.

Because it is so important, retailers have resisted changing the retail store experience. However, e-commerce-only operations are becoming credible competitors by offering greater selection, cheaper prices, product ratings and reviews, not to mention convenience. And tech-savvy consumers are increasingly using stores as a way to evaluate products and then purchasing them online.

To compete, retailers will need to leverage the strengths of the physical store by using technology to deliver tailored content and support social interaction in order to increase the likelihood of in-store purchase. They can do this by leveraging the record of the customer’s online shopping and the fact that they are in store to provide real help in locating the right product.

This may be defined as context-based retail using a combination of personal and social data: customer characteristics, past shopping/purchase behavior and current behavior to assist in identifying and selling a product or service.

Such an approach is now possible for real-world retailers thanks to the new capabilities of mobile phones, which offer not only computing power and networking but also location-based services, barcode scanning and so on. Secondly, the online experience has raised customer expectations, and customers are more willing to share personal information in order to obtain a tailored shopping experience.

Context can be used to enhance the in-store shopping experience and also further to improve the online shopping experience—in this way, the total shopping experience can be integrated across channels. Context can also be expanded across domains, and may play a role in product repair, financial advice and education.