Stores See A Future Where Your Data Guides Your Purchases

And they will already possess your data.

The stores are touting convenience, but the question is whether, by guiding choice, they are already behind online merchants who pioneered it and are trying to build a deeper relationship - also constructed from customer data. JL

Sapna Maheshwari reports in the New York Times:

“You can’t out-Amazon Amazon. We’re never going to be the best pure-play retailer. What we have to do is marry digital tools with our store experience.” Expect more stores to incorporate the kind of digital data collection that has powered the online world. Stores would eventually recognize customers as soon as they walked in, able to immediately know customers’ identities and personal preferences when they arrived thanks to data collection.

The chief executive of Saks Fifth Avenue’s parent company said stores would eventually recognize customers as soon as they walked in. FedEx showcased a robot that it thinks could ultimately make same-day deliveries on its own. The mall operator Macerich described the movable walls and fixtures that it was using to construct new stores for online-only brands.

Thousands of retail and technology workers descended on Las Vegas for an annual industry gathering known as Shoptalk. There they shared the bets that they’re making on Americans’ evolving shopping habits and how they plan to maintain relevance in an era that’s changing faster than the spin of a roulette wheel.

The message came through loud and clear: Expect more stores to incorporate the kind of digital data collection that has powered the online world.

Retail has been in a state of flux for years, an industry built on brick and mortar in a world now populated by smartphones and featuring ever-quicker home delivery from the web. There is also increased competition from brands that have built their followings through social media. And, of course, there’s that little company called Amazon.

“You can’t out-Amazon Amazon,” said Helena Foulkes, the chief executive of Hudson’s Bay, which owns Saks and Lord & Taylor. “We’re never going to be the best pure-play retailer. What we have to do is marry digital tools with our store experience.”

Ms. Foulkes, who spoke at a conference event held by Recode, said she anticipated that years from now, stores would be able to immediately know customers’ identities and personal preferences when they arrived, thanks to data collection. That knowledge, she said, will be used to make their shopping experiences easier.

“I think the world will evolve that way,” she said. “People are already playing around with those things.”A presentation by FaceFirst demonstrated how retailers could use its facial-recognition technology to engage with customers after they walked into stores.

The company’s chief executive, Peter Trepp, showed how stores could send automatic text messages to shoppers and receive their profiles to assist them better. He showed an example of a profile, which contained a shopper’s visit history, the minutes she spent in the store on her last trip, what she bought during that visit and the sum of her online purchases with the store’s chain.

In an email exchange after the conference, Mr. Trepp emphasized that the company was focused on the privacy and security of customer data. He said that “most of what we’ve sold in the past is related to loss prevention and mitigating organized retail crime,” meaning the technology has been used to identify shoplifters and known criminals.

“However,” Mr. Trepp said, “we see our business shifting toward providing solutions for improving the customer experience and believe that opt-in solutions like these will become the largest part of our business in the future. We are working with several large retailers on this today.”

The challenge of gathering more information from stores — which lack the reams of customer data collected by retailers online — was further highlighted in a presentation from Orbital Insight, a company that uses satellite imagery for a variety of analysis, including counting cars in parking lots to help gauge traffic to retail chains.

James Crawford, the company’s founder and chief executive, said that within the last year, the company had added geolocation data from cellphones to its offerings. While the data is anonymous, a unique number is associated with each phone so the company can study traffic patterns within malls or other “trade areas,” he said. Mr. Crawford said that while retailers knew the foot traffic in their own stores, they weren’t typically aware of what was happening in front of their stores or elsewhere in a mall or community.

Orbital Insight can gather geolocation data from 10 to 20 percent of phones in any mall, he said, with pings every 15 minutes on average. The company said in an email that it gathered information from vendors that draw data from “a combination of safety, social, family and weather apps,” and that it worked only with those that required consent for location services.

While many conversations during the week centered on data — one retailer even mentioned the term “offline cookie” to refer to in-person browsing information — retailers are also trying other tactics to drum up business at their stores.

“We have to admit we’re not just in the product business anymore,” Daniella Vitale, the chief executive and president of the Barneys department store chain, said in an interview. “The expectation of what a retail experience should be is beyond just good product and excellent customer service.”

She added that while those remained pillars, “it is more about how do we create an experience in the store that is more entertainment-focused, that’s more food-focused, beauty-service-focused?” This month, for example, Barneys is set to open The High End, a marijuana-inspired concept store in Los Angeles that will sell products like rolling papers and glassware in a beautiful setting.

“There is a paradigm shift here in terms of that industry, and we want to be part of it,” Ms. Vitale said. “This was also about finding things that would appeal to a female consumer.”

Kevin McKenzie, chief digital officer of Macerich, described the company’s recently introduced BrandBox concept, which provides mall space for online retailers like the flower-delivery service UrbanStems, the mattress seller Nectar Sleep and the cosmetics company Winky Lux.

The spaces offer flexible leases and a new audience for brands that may not have any experience with physical retailing. A store can sometimes take six months to build out, but BrandBox can set up a store in as little as three weeks, Mr. McKenzie said.

“We thought a lot about not just the walls but the fixtures and all the different ways they could be used and configured,” he said. “It was basically a big Tetris game.”

As the various technological experiments showed, America’s oldest retailers are aware of how challenging the retail landscape remains.

When asked about her biggest fear, Ms. Foulkes of Hudson’s Bay said, “Our own inability to move fast enough.” Erik Nordstrom, a co-president of his family’s chain, said that while the company’s strategic choices and direction had been right, “we need to be more agile.”

And Art Peck, the chief executive of Gap Inc., which just spun off its Old Navy brand, closed his presentation with three words that he said the company’s founder, Don Fisher, used to say frequently: “Change or fail.”