The Future of Retail – Emotional Analytics

June 3, 2015 Chris Riddell

The Future of Retail – Emotional Analytics

Creating Incredible Experiences and Understanding Emotions. It’s the Future of Retail

Since the beginning of 2015, I’ve been talking to audiences around the world about the importance of creating incredible customer experiences. The context of this has been the massive shift we’ve seen towards online buying – online sales figures continue to grow by more than 10% year after year. And traditional retailers have been reeling. So, is this the death of ‘real world’ shopping as many have predicted? I don’t think so, but something DOES have to radically change. I believe that change is going to centre around creating unique, personalised customer experiences that bring the worlds of online and offline together.

The big question for retailers then is how do you create these experiences? Where do you start? I was a keynote speaker at a recent Retail Technology conference in Australia and this was one of the biggest questions of the day. There was absolute and unanimous agreement that bricks and mortar stores on our high streets have the greatest opportunity to drive some pretty exciting innovation and that there was no better time to begin innovating than today.

But the question remains – what IS that innovation? How DO you create those unique, engaging retail experiences for your customer?

As it turns out, the answers to those questions are written all over your customer’s face.


It’s still about Analytics

Big data and Analytics is the continual theme around supporting and creating customer experiences in Retail. The bit that is becoming increasingly interesting though, is the question of how and where to get the data to analyse from? This is about thinking and doing differently, which in this world of online and digital has to be at the top of your priority list.

Sure, you’ve been collecting data for years, about all kinds of things. Your P&L, Sales, Advertising spend, operational costs, the list goes on.  More recently you’ve been able to track the online habits and preferences of your customers through their interaction with your business website.

Using the power of predictive analytics you have begun to integrate information from wider sources like social media and statistical data. Each additional source has helped you to get to know your customer better and created the opportunity to relate to them in a much more personalised way. The challenge is – where ELSE can we go to gather data and most importantly, how can we connect this to a real-time, real-life retail environment?

Welcome aboard the Emotion and Gender Analytics train – a vehicle that is destined to take you to places you’ve simply not been before.


The evolution of Emotion Analytics

Let’s talk for a moment about emotions. Facial expressions are innate to all humans and have been proven to be one of the strongest ways we express our emotions. Charles Darwin actually theorised this way back in 1872, but the seminal research on this was published in the 1970’s by Dr Paul Ekman. He and his research partner, Wallace Friesen, developed the Facial Action Coding System (FACS) to taxonomize every human facial expression. Originally they argued that there are seven core emotions that are universally conveyed by facial expressions: happiness, surprise, fear, anger, disgust, contempt and sadness. They have since slightly expanded this list.

From a technological point of view, the first big step towards Emotion Analytics was the development of Facial Recognition Systems (FRS). Although they were initially very basic and struggled to cope with differences in lighting, poses and accessories like glasses, they have become increasingly sophisticated, particularly with the development of 3D technologies. Facial recognition is now used all around us on a daily basis, in all manner of ways. Border Control at the ports of entry to our country uses FRS to detect people of interest. Large casinos are well known for using FRS to detect high rollers and also potential fraudsters, the minute they set foot in the building.

The final step in this development is the evolution from basic facial recognition to being able to recognise age, gender and now, with increasing accuracy, emotions. Previously, the real challenge around FRS was the cost. They were prohibitively expensive, required a high degree of customisation, servers, processing power, expensive cameras… the list goes on. This meant FRS were only really being used by governments and very wealthy businesses, with a pretty watertight use case. Trialling or testing these platforms simply wasn’t viable for the majority of potential users.

However, as with all technology in this world we live in, time and increased processing power have made things cheaper and quicker, and now we are seeing some special things start to happen. The global Facial Recognition market is going to explode, generating an estimated income of US$6.5b by 2018. That is huge! And the penetration of this technology will be widespread and rapid. Fujitsu in Australia have recently started distributing licences for Facial Recognition software and it costs less than the price of a top end smartphone.

Emotion Analytics potentially has so many use cases across a variety of industries. Obviously, there are massive applications for our security and intelligence gathering organisations. But for today, let’s turn our attention to Retail, and by that I mean traditional bricks and mortar stores.


Retail must get Emotional

Fujitsu have very quietly nodded that yes, they are trialling Emotion Analytics with one of the big department stores in Australia. There’s a lot of interest from far and wide to see exactly how far this will go, so watch this space. But the question is, what could this technology and the real-time data it gathers, be used for?

Imagine for a moment that, by using a combination of Blue Tooth proximity and FRS, you could first of all identify your customers when they entered your store. Then you had the opportunity to identify the emotions they felt as they walked through your store. Of course, some customers keep a ‘poker face’ when they shop, but new software from Californian company, Emotient, can register ‘micro-expressions – the tiny flickers of emotion that show on people’s faces before they even know they have registered an emotion or are able to control it. It can even tell you if they are smiling, but not with their eyes.

How useful could this information be when it comes to understanding your customer and creating a unique, personalised experience for them? This kind of granular data is priceless. You can already analyse a customer’s online journey through your company website – discovering where they have come from, what they look at, how long they stay on the site, what grabs their attention and what motivates them to action. What if you could apply those same principles to their real-time journey through your real-world store?


Real-time Customer Journey Mapping

Let me ask you… How many customers are in your store right now? Don’t know? What about 3 weeks ago on a Tuesday at 2:30pm, how many then? Still don’t know?

Maybe you’ve got some form of movement detecting device at the door that counts people in and out, so you’re feeling ahead of the game? Let me ask another question. Do you know where your customers were when they were in your store? Or what they looked at? What grabbed their attention? What made them smile? What annoyed them? Were their interactions with your staff positive or frustrating? I bet you don’t know. But, I promise you, you should!

For any retail store, either online or offline, your future is based on your ability to find data and then make meaning out of it. You’ve got to get a hold of any possible opportunity to collect insights on everything – both within the walls of your business, and in the big world outside.

Identifying and analysing a customer’s journey inside a retail store, until now, has only been done on any significant and meaningful level by the big supermarkets. Their businesses are built on a number of long-standing and very ancient pillars, and understanding how customers move through their stores has been critical to a very large part of their business model.

What now exists is the technology to drive a revolution in consumer journey mapping in any store, small or large. Whatever your shape or size as a retail store, the playing field has now been very much flattened. The technology behind emotion analytics will allow you to not only have a real-time view of exactly how many customers are in your store, but also precisely where they are spending time and for how long. You can discover how they feel about your advertising, your displays and your staff. You can even compare how they felt when they entered your store with how they were feeling on the way out. The applications for this new technology are many and varied. Let me give you some examples…


Staffing when and where it’s needed

Knowing where your floor staff are needed on a second by second basis is a critical aspect of creating an exceptional customer experience in Retail. To be honest, in my experience very few stores today ever get this right. I was shopping in a department store recently and found it incredible that you’re either being harassed by store staff who ride you from the second you walk through the doors or it’s like an abandoned ship and you are left wondering if anyone knows you are even there in the first place.

There’s got to be a better way of doing this. Tracking your customer’s real-time journey through the store is that way. Not only can you know where your customers are, but soon you will even know when they are feeling frustrated, angry or happy and ready to purchase.


Emotion-based Advertising

When it comes to Emotion Analytics, no one is ‘just a face in the crowd’. Now every customer is a unique individual with his or her own needs, wants and responses.

Neuroscience tells us that ultimately most consumers make buying decisions based on emotions – rational thought is mostly used for justifying those emotional decisions! So…

Could you develop proximity-triggered advertising that appeals to a customer’s current emotional state? Certainly.

Could you identify a customer as they walk into your store, access their record of past purchases or even the items they showed an interest in when they browsed your website and then tailor your pricing and service accordingly? Soon you will be able to do exactly that.

Could you identify a shopper who is feeling sad and delight them with a free coffee voucher or the spontaneous gift of a flower? Absolutely! And in each case you would create an exceptional, individualised customer experience that would not be forgotten.


Ambient Intelligence is the future

Wikipedia describes Ambient Intelligence (AmI) as ‘electronic environments that are sensitive and responsive to the presence of people.’ This is the future. Like fish in water, we will soon be immersed in a seamlessly integrated, all-pervasive, context-aware, adaptive and anticipatory technological environment that perceives and meets our needs, often before we are even aware of them. Facial Recognition Systems and Emotion Analytics will be a huge part of this. AmI places the user at the centre of everything – it is all about the user experience.

As far as retail goes, there’s a lot to be learned from AmI – the secret is to focus on your customer. At the end of the day, that’s not rocket science. Through Emotion Analytics the technology is available to understand your customers at a much deeper level and create experiences for them that not only sell products, but develop their relationship with your business and your brand. And ultimately, in a rapidly changing retail environment, that’s a strategy that will take you and your business into a successful future.

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