To beat Amazon, retailers will have to bring back a key part of the shopping experience from 100 years ago

No, even older.

No, even older.
Reuters / Peter Morgan

  • The retail apocalypse is in full swing, but there is one tactic retailers can use to fight back.
  • Tracking customer’s habits and preferences can lead to better product recommendations and customer service.
  • Data privacy will have to be considered, but user data could help massive retailers return to something like the personal shopping experiences that were common 100 years ago.

Amazon is often cast as the villain in the retail apocalypse story.

Traditional stores like Sears, Kohl’s, and Toys R Us are closing hundreds of locations between them, and other brands are totally rethinking their online strategies in order to combat Amazon and the online shopping revolution it inspired.

Mike Sands, CEO of the customer tracking company Signal, is a bit of a contrarian and doesn’t think that brick and mortar retailers have to die. At least some of them have a real chance to turn their ecommerce businesses into competitors against Amazon. They just have to go back to how business was done 100 years ago, he says.

“[A retail client] showed us an old black-and-white picture of one of their original stores,” Sands told Markets Insider. “They said ‘you know 75 or 100 years ago when you came into one of our stores, the store manager knew everybody by name and who you were and what you wanted.’ It was a highly customized, relevant experience.”

The retail stores of 100 years ago knew each of their regular customers, down to their clothing sizes and family members. The massive scale of today’s retailers makes that impossible, but data about a customer’s clothing sizes and preferences can be linked to a unique identifier, replicating at least some part of the personalized experience of yore.

Sands’ company, Signal, and others like it, are trying to provide that sort of experience by helping to track people’s shopping habits across the web. Sands said retailers are now able to track which items you look at when you come to their websites and then personalize your shopping experience accordingly. The retailers that do this the best are the ones that will likely survive.

Current technology allows retailers to go even further than their mom and pop predecessors. Retailers can share data with each other, either directly or through third parties, and help identify each other’s customers. Even if you don’t have an account with, or have never been to a certain retailer’s website, that retailer could be partnered with another site you have been too and use something like a device ID to know it’s you. If they know you were shopping for scarves on another site, the retailer could offer you a discount on scarves based on that data.

Retailers can even track your brick and mortar purchases if you provide an email or ID when you check out. This data can be used online to provide even more personalization, Sands said.

“Amazon figured that out a decade ago and has been pushing, pushing, pushing because they always know that it’s you across all of their touch points,” Sands said. “That notion of recapturing the spirit of the black-and-white photo by applying technology today, that’s what I see as a very very important trend.”

While being tracked across the internet may scare some people, Sands says that if it’s done in a respectful and responsible way, it can be really helpful. Better recommendations, faster checkouts, and better customer service are all possible with good customer data. Going backwards faster will certainly be a large focus over the next ten years, Sands said.

Read about why Bill Gates thinks that a robot taking your job will be a good thing.

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