In this exclusive extract from his new book Disrupt!, James Bidwell shines the spotlight on how shopping centres and stores can make the most of new technology.

The physical cookie is a device that could bring targeted digital marketing capabilities to malls and shopping centres worldwide.

In the face of ever more advanced ecommerce algorithms, the smartest bricks-and-mortar outlets are borrowing from their online counterparts to create hybrid shopping experiences that incorporate the best of both worlds.

Finland-based real-estate investment company Sponda has developed the physical cookie, a device 
that can bring targeted digital marketing capabilities – the kind readily available to online retailers – to city malls and shopping centres.

It brings online cookie functionalities to the real world, enabling businesses 
to collect and use data about a consumer’s shopping habits.

The company describes the innovation as a ‘disruptive loyalty programme for a shopping mall’, explaining that ‘instead of identifying the loyal customer at the end of the shopping process (purchase), the system identifies loyal customers as they enter the shopping mall’.

The device is a simple RFID key fob — costing 0.17 cents to produce — that the customer places in their pocket or attaches to their clothes. It doesn’t need to be registered or retain personal data, instead focusing solely on the customer’s time spent in stores.

“The physical cookie collects data about the customer as they shop, monitoring their behaviour by tracking which displays they are lingering by, and communicating its findings with participating stores via electronic readers”

The physical cookie collects data about the customer as they shop, monitoring their behaviour by tracking which displays they are lingering by, and communicating its findings with participating stores via electronic readers.

The system learns from the usage data and creates personalised messages, which are displayed to the consumer on screens in-store in real time. Instead of annoying push notifications, the shopping environment reacts to the shopper, offering more relevant messages and personalised offers.

Physical cookie

Once it’s attached to their keys or placed in their pocket, the customer 
can forget all about it

Sponda, in collaboration with ad agency TBWA\Helskinki, undertook a successful large-scale trial of
 the physical cookie in one of Helsinki’s busiest malls, where 14,000 shoppers carried the device and were rewarded with targeted deals over a four-month period. The physical cookies were handed out 
at random to everyone who entered the mall.

Sponda reported that customers with physical cookies spent 21.7% more time in stores than those without them, and they also claimed to be able to guide 14.5% more customers from the busiest ground floor to the mall’s second floor via targeted, personalized electronic messaging. Throughout the trial, retailers benefited from real-time analytics, enabling them to optimise floor space and understand which displays were proving the most popular in their store.

The system has many advantages over similar technologies, such as the iBeacons used in the Dharavi slum. First, it doesn’t inconvenience the shopper by asking them to turn on their Bluetooth 
and drain their phone’s battery.

Once it’s attached to their keys or placed in their pocket, the customer 
can forget all about it.

It also avoids overloading the shopper with information. Rather than spamming multiple alerts to their phone as they walk through the mall, the physical cookie causes the physical retail environment to react around them, displaying dynamic ads in response to their activity.

It’s both less obtrusive and requires less action on the part of the shopper.

Takeaways

  • Outside retail, how else could RFID be used to offer more personalized experiences?
  • If the physical cookie required users to create an account, how could ecommerce stores then 
make use of the customer’s data from activity in the real world? 

  • Could there potentially be privacy concerns with the physical cookie? (If it were to be rolled out at scale, opt-in rates may be affected by shoppers not wanting their ‘real-world browsing history’ reflected on in-store advertisements that others could see.) How could this be overcome? 


A scanner that helps shoppers find what they want

Germany’s Findbox is a device that enables consumers to find what they’re looking for in store quickly by scanning similar items.

For large stores and DIY outlets with a wide inventory of similar products, customers can often become confused while trying to find a particular item and end up leaving without buying anything.

Findbox is a kiosk that aims to avoid this scenario by acting as a digital assistant that can locate the items they need. The device features a scanner that uses an advanced image-recognition algorithm to recognise 3D objects and match them to products in the store.

“If customers need a particular type of light bulb, ink cartridge or screw as a replacement, they can take an old one into the store, scan it and the device will tell them if it’s in stock and which aisle and shelf it’s on”

For example, if customers need a particular type of light bulb, ink cartridge or screw as a replacement, they can take an old one into the store, scan it and the device will tell them if it’s in stock and which aisle and shelf it’s on.

The Findbox also offers up similar items: customers can scan any product to see what other related options are available to them. Otherwise, they can also search manually by keyword, using the device’s touchscreen.

Either way, the kiosk offers up rich information – brand, specifications and price – to help customers make a decision.

The system is ideally suited to large stores such as supermarkets or DIY warehouses, where finding the precise model or item required can be tricky, even if sections of the store are indicated with overhead signage.

Anyone who has had to visit a large DIY store and hunt for the correct screw type can testify to this. And while the shopper benefits from the time saved searching, vendors also learn about their customers.

For example, Findbox could reveal that a certain item is highly sought after but out of stock, prompting the vendor to place a new order. As some shoppers are reticent about asking whether something is in stock or not, such insights can be hard to obtain otherwise.

Findbox helps customers find what they’re looking for more quickly, while businesses can reduce lost sales, free up staff and upsell related products.

The company also offers LightGuide wireless product tags, which can be used in conjunction with the scanning device. These tags replace the usual paper price labels on the shelves of smaller stores and, when customers search for an item using the kiosk, the tags can light up to show them exactly where they are.

Barcode scanners already exist which offer similar functionality to Findbox, but they are obviously unusable with any item that doesn’t have its original packaging. Findbox is more versatile.

In three years the company has grown significantly and has installed devices in over 200 stores in Germany, France, the United Kingdom and the United States. Following this success, the company was purchased by SES-imagotag in November 2016.

Takeaways

  • Are there other ways for bricks-and-mortar stores to direct shoppers more efficiently to what they need?
  • What stores would be well suited to the Findbox solution? Could similar functionality be the cornerstone of modern retail environments, such as Amazon Go, in the future?
  • What other features could Findbox incorporate to emulate the speed and convenience of shopping online? Perhaps there could be an option to pay at a machine prior to picking up the item, for example?

Disrupt! 100 Lessons in Business Innovation by James Bidwell is published by Nicholas Brealey, RRP £20.

You can buy it here.