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AI and shopping: Every customer can be a VIP

Going 'phygital' to create great retail experiences.

Ecommerce is changing the way we shop. Even so, online shopping makes up only 20%  of an average retailer’s sales in Asia, says Shaun Kwan, who co-founded Trakomatic – a company that focuses on “digitizing brick & mortar” stores.

“It’s growing, I agree,” he says. “But consumers still want to touch and feel products.”

Shaun Kwan - Trakomatic
Shaun Kwan, Co-founder, Trakomatic

That doesn’t mean that physical stores have it easy. “Today, retail space is very expensive. Stores are shrinking, and merchandise will no longer be in a physical shop.”

Kwan says many merchants are looking for and trialing new technologies to help them adapt and grow.

“For example, augmented reality and virtual reality are being used to display merchandise in various colors and sizes, and customers can order online right at the shop. It’s all experiential to reduce a store’s footprint.”

But the answer to more sales might hinge on something far more basic: better and more personalized service. If there’s one commonality cutting through all the retailer trends, it is offering a better experience for customers.

And artificial intelligence (AI) is shaping up as one way to boost it.

According to Kwan, young shoppers in Asia want to be known and acknowledged. They want customized experiences that help them save time and money. They aspire to be treated as a VIP. But from their point of view, most VIPs are rich seniors.

Gold star treatment

Now, some retailers can offer VIP treatment to more people, with the help of (AI) and facial recognition developed by Trakomatic.

This solution helps a retailer to create a “customer service ecosystem” that works hand-in-hand with a store’s loyalty membership plans.

Once a customer opts-in by signing up for the service, they have the option of adding their photo image to their profile. If they do, Trakomatic’s video analytics, AI-powered facial recognition, and intelligent sensors all on the Microsoft Azure cloud do the rest.

Consider how it works for a few retail stores in Singapore.

Trakomatic’s AI recognizes a VIP as soon as they enter the mall. The solution then sends customers a personalized message like an SMS recommending a pair of trainers if they are a sports enthusiast, for example, and directs them to the store. Along the way, the mall’s digital signage knows when the VIP is near and changes the content to reinforce the ad of the trainers that was sent on mobile when the customer first stepped into the mall.

When the VIP arrives at the store, the system alerts the service staff via their devices. They then have the chance to turn on the charm and lavish the VIP with personal attention. They can also cross-sell and up-sell as well as offer additional discounts and rewards, like coupons.

This kind of integration takes advantage of the fact that 71% of shoppers still spend more per visit in-store than they do shopping online.

Trakomatic’s shopper engagement module was introduced at the Lenovo Flagship Store to address these demands, enabling the on-ground team to recognize, anticipate and serve customers proactively with data and insights.

“Delivering great customer service is never easy for any brick and mortar store, as customers now increasingly demand nothing less than seamless shopper experiences across traditional and digital touch points. Ultimately, AI is helping staff make more informed business decisions,” shared Constantia Ang, Sales Director, AddOn, a Lenovo distributor in Singapore.

Going “phygital”

Years ago, Shaun Kwan noticed a gap in data analytics. “Newspaper, music, books are digitized, why are we not digitizing the physical space?” He saw that CCTV cameras were deployed nearly everywhere, observing valuable shopper data streams, but no one was utilizing them.

So he co-founded Trakomatic to make use of that data with intelligent sensors. It started with measuring traits like footfall, age, and gender profiles, trails, and heatmaps — all as anonymous data sets to protect individual privacy.

He was on the cutting edge of retailers going “phygital” – marrying the physical and digital worlds to improve retail performance.

The company uses Microsoft Azure to process all this data in the cloud — the only way to achieve the scale and speed necessary to offer their service — and Power BI for basic and advanced sharing and intuitive visualization of data.

Besides enhancing the customer experience, Trakomatic’s tools help retailers do things like measure and improve the effectiveness of marketing campaigns, track sales conversion rates, and discover shoppers’ average basket size. In other sectors, like tourism, Trakomatic can help attractions with crowd control.

There is also a predictive element at work. The system can already help managers forecast which days and locations are likely to experience heavy traffic.

“Retailers are now focusing on selling desired products to the correct audience than clearing stocks that have been left on the shelves,” says Kwan. “Soon, retailers will try to predict individual shopper behavior in the stores with the help of AI.”