How Facial Recognition Technology Could Lead to Happier Shoppers

In case you need proof that there’s something wrong with brick-and-mortar, consider this: Roughly one-third of those who walk into a store feel anxious, and another third don’t feel anything at all.

Those findings stem from a survey conducted last year, said Maya Mikhailov, CMO and co-founder of GPShopper, a Synchrony Financial company. Speaking on a panel at the Retail Influencer Network launch event in New York on Thursday, Mikhailov said retailers should do everything in their power to ensure that consumers don’t leave their store thinking negatively about their experience.

Many retailers are hoping to turn their store experiences around — and bring them up to date — by investing in technology, which, while well-intentioned, can go off the rails if not wielded thoughtfully. Technology, said XRC Labs founder and managing director Pano Anthos, must ultimately serve the consumer experience, which in today’s world usually means saving time or somehow making the shopper’s life easier.

That’s why Anthos is baffled by the snail’s-pace adoption in the U.S. of facial recognition, a technology that is “rampant” in tech-progressive China, he said. While companies and consumers here debate privacy, security and all of the other issues that come with scanning databases of people’s faces, shoppers at Alibaba-owned Futuremart stores are rewarded with discounts if cameras see that they’re smiling.

The way Anthos sees it, facial recognition could reinvigorate customer loyalty and bring an interactive element into the store environment. Brazilian footwear brand Melissa Shoes already is experimenting with facial recognition, deploying technology from Facenote — part of XRC Labs’ fourth cohort — in its Disney World and Miami stores. Facenote incentivizes consumers to text a selfie to the store by offering a discount in return. Or visitors to either Melissa location can have their photo snapped by an in-store kiosk that encourages them to “scratch” on-screen to reveal their discount. At the cash wrap, store associates see the customer’s profile and photo, including when she joined and the prizes and rewards she has unlocked to date.

Though early on, facial recognition was considered a loss prevention tool, it’s now showing promise as a means of strengthening consumer brand relationships. “The impact downstream has been enormous on the loyalty side,” Anthos said.

Keval Desai, a partner at Interwest Partners whose portfolio includes Cuyana, The RealReal and Optimizely, said his vision for technology’s impact on the consumer in-store experience has little to do with retailers at all.

“A lot of times when you try to have a discussion about technology, you forget about the basic needs of the consumer,” said Desai, who previously worked for Google. “Coming from Silicon Valley, we tend to think technology first, consumer second. Before we get to machine learning, artificial intelligence, augmented reality, virtual reality — how about a longer battery life on the phone? How about a fast network?

“If every consumer who walked into a store had a faster network and a phone that was not dying on them, that consumer would walk away happier,” Desai said.

Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

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