New Scientific Insights in Social Influence and Machine Learning Unlock Hidden Value in Existing Data Infrastructure in the Retail Industry
In recent years we have seen significant scientific contributions to the field of human influence, which studies how the people we know and interact with influence the decisions we make. Coupled with the data already available about retail purchases and the latest advances in artificial intelligence, these new insights on human influence can strategically impact various segments of the retail industry.
For a long time, retailers have been accumulating customer transaction information through Points of Sales terminals. Usually those metrics were only able to describe how effective retailers were in their attempts to influence individual customer behaviors. Whatever happened when clients interacted afterwards with their friends, families and coworkers—the concrete acts of social influence that many times lead to purchasing decisions—remained a mystery, a black hole of information.
Now with proven science about how individuals influence each other and artificial intelligence algorithms able to interpret existing data, retailers can go from staring into a black hole to retrieving a black box full of information to make better marketing decisions.
Old: Brand to Clients; New: Brand to Networks
For at least the last decade, marketing has focused on brand evangelists and influencers. In recent years, we have also seen the emergence of virality as a concept associated with marketing campaigns, products and services. But only now, thanks to artificial intelligence, we can understand with precision how products, services and ads spread within human networks.
Feeding each of the POS transactions into machine learning algorithms gives marketers the opportunity to quantify brand evangelism and advocacy in an entirely new way.
Social Media is for Branding, Human Networks are for Retail
Another important aspect of these advancements and groundbreaking methodologies is how much better they are when compared to widely known social media platforms. The last decade has seen the expansion of social media and online social networks as a tool to advance branding and advertisement efforts.
However several studies have demonstrated that influence in social media lacks the power of influence human networks have.
Same Old Infrastructure, Higher ROI
Another benefit of using POS data to understand human networks patronizing a brand is that no additional investment is needed. Retailers have invested in POS systems for a long time and utilizing the same old data in new ways represents a unique opportunity to increase the return of that investment.
The cost of utilizing this new technology will be confined only to software licenses required to extract the information mentioned earlier. Compared to the cost of creating and establishing a social media presence, investing in human networks metrics has a much higher ROI potential from the outset.
Security and Privacy Concerns
One of the most important aspects when dealing with POS and payment systems information is security. Hacking incidents like those at Target and Wendy’s highlight the importance of safety in this space. But using human networks analytics does not require invading the privacy of individuals. There are numerous measures that can be taken before analytics are produced to preserve the identity of individuals and maintain their privacy.
A new paradigm
Retail POS systems can become powerful data sources for newly created artificial intelligence algorithms that provide metrics explaining the mechanisms of human networks. These tools represent a new set of opportunities to explain client behavior and preferences that were not clear in the past.
Retail environments are set to reap the benefits of a new round of technologies that advance the understanding of how clients patronize brands with their families, friends and colleagues. Who would have guessed that the old and reliable POS would be the gate to such a promising paradigm?