Bridging the Divide between Physical and Online Retail through Location Intelligence

Manish Choudhary, VP Global Engineering & MD India Operations, Pitney Bowes | Monday, 13 June 2016, 09:18 IST

Then was the last time you walked into a large store and searched for a commodity across aisles only to find that it was out-of-stock? Or, when was the last time you bought something online only to be disappointed by the late delivery? Imagine a buying experience where you are kept informed of available stock with alternatives, or an online shopping experience where your purchase is fulfilled consistently with fast delivery. Location intelligence is turning this imaginary world into reality.

Be it physical or online retail, location intelligence is transforming the way businesses reach out to customers. Increased demographic data, consumer information and buying patterns, geo-location services and machine-learning engines are driving location-intelligent sourcing and delivery options that are blurring the boundaries between physical and online retail- helping put smiles on the faces of customers while driving profitability for businesses. In this article, we explore how location intelligence is enabling synergies between physical and digital commerce.

Sourcing and Delivery: Location intelligence enabling real-time e-Commerce

By enabling hyper-local merchants on the e-Commerce platform and using location intelligence to determine the nearest available sourcing point and fastest route of delivery, e-Commerce firms can leverage significant efficiencies in operational expenditure for sourcing and delivery.

When a customer places an order on an e-Commerce platform, the retailer can find the list of nearest available sourcing points or small merchants in real-time, using machine-learning (ML) engines to compute the lowest cost of sales by taking delivery costs, taxes, discounts and other variables into consideration. The order can then be passed on to the retailer and delivery partner. In the best case scenario, the order can be delivered within hours, earning bonus points for the retailers. Even for returns, the same engine can be leveraged to find the nearest available buyer to save shipping costs.

The enabling technology uses geo-coding, location-based services for shortest path calculation, and machine-learning, algorithm-based engines for real-time sourcing.

Location and Demographic Insights: Enabling intelligent inventory and landing pages

Customer buying patterns are dependent not only on high-level factors such as gender and age, but macro factors, too, such as location, demography, or even weather. Physical and e-Commerce retailers can leverage such factors to accurately determine buying patterns and optimize inventory in various locations. Moreover, the same analysis can be used to customize landing pages, recommendation engines, deals and supply chains across regions. Segmentation on a regional level is an important manifestation of the narrowing gap between physical and digital commerce.

Buying patterns can be gleaned from historical records and demographic parameters, analyzed and fed into rules engines to plan for optimum inventory, supply chain or landing pages. Seasonal factors, too, such as the onslaught of winter or cultural festivals, can pique demands of certain goods, which the rules engine and predictive analytics can forecast for maintaining stock in inventory.


Seamless Retail: Enabling the physical to digital crossover

Consumers today are using mobility and smart devices to make intelligent purchase decisions, including price comparisons, deal sourcing and store discovery. By connecting with customers, managing in-store experience, purchase pattern analysis, and analyzing lost sales opportunities in real-time through digital channels, physical retailers can open a host of new opportunities. On the other hand, digital stores can take orders online and pass it on to physical stores for near real-time deliveries.

Physical retail stores can arm the consumers with a mobile app to help them create a shopping list. The app would display availability of items and will also provide in-store directions through indoor navigation. If an item in the list is unavailable, the app will provide an option for ordering it online and getting it shipped from the nearest available store. Devices such as I-Beacons or Indoor Navigation, combined with digital store integration, can help retailers save lost opportunities and give amazing insights into purchase patterns on an individual level, which can then be leveraged to automate marketing efforts.

Digital retail stores, on the other hand, can integrate with local merchants or their own physical retail stores. In the event of a lost sale, customers can be given the option of fulfilling the needs through local stores at a minor additional cost.

Location intelligence is already disrupting the market by introducing new same-day delivery standards through crowd sourced delivery. Commerce enabled through location intelligence has endless possibilities for the intersection of physical and digital retail, bridging the divide between the two for drawing synergies that result in a win-win for both customers and retailers.