Recommender Systems in Retail Stores: Bridging the Gaps between eCommerce and Physical Shopping

Advertising Age posted an article yesterday on Olay Translates Killer Online App to Retail Aisles, describing some recent trial deployments of special kiosks in physical stores that give shoppers access to online recommender systems. These systems have access to online representations of offline inventories - or, at least, product lines typically carried - in the stores, and help bring some of the advantages of electronic commerce (e.g., more detailed information and personalized recommendations on products) to bricks and mortar stores.

Shoppers - online and offline - often suffer from the paradox of choice: a range of options so vast that it can feel overwhelming (e.g., the "250 varieties of cookies, 75 iced teas, 230 soups, 175 salad dressings, 275 cereals and 40 toothpastes" that Barry Schwartz mentions in his TED presentation on the topic) and result in low customer satisfaction, regardless of which option is selected. Recommender systems help people navigate broad ranges of options in the digital world, but without the assistance of a salesperson, there has been little help for shoppers in physical stores ... until recently.

For the growing number of consumers who prefer the online experience to traditional shopping, the ease of finding products and getting recommendations clearly is a draw, said Carter Cast. Mr. Cast, a former CEO of Walmart.com and head of strategy for Wal-Mart Stores in the U.S., became CEO of fledgling specialty online retailer Netshops late last year.

Because of expectations created by web shopping, consumers increasingly expect offline stores to have the goods they want and make them easy to find, Mr. Cast said. "So the ante is raised in the physical world."

In an effort to meet these expectations, Procter & Gamble has developed and deployed a version of their popular Olay For You online recommender system (tag line: "a little about Olay, a lot about you") that bridges the gap between the wealth of online personalized information and the experience of customers in offline WalMart stores. In either case - visiting the web site or at a WalMart kiosk - users characterize their general wants and needs, selecting from among options such as

• I want to see a visible improvement in my skin
• I'm happy with my skin but want to help it be the best it can be
• I want to look good for a special occasion
• I want to keep up with the latest skin care products

and then progressively reveal more specifics about themselves (e.g., their age, their skin type and color, whether they are experiencing hormonal changes, and other lifestyle issues such as "not enough 'me' time"), until the system recommends a skin care product that is deemed likely to be right for them. Screenshots of my profile and recommended Olay products can be seen below.

The strictly online version offers the capability of optionally remembering the user's profile (associated with their email address); it's not clear from the article whether or how the kiosk version, designed by Talk Me Into It ("GPS for the overwhelmed buyer") allows this, nor whether it allows offline shoppers to access their previously created online profiles at the kiosks, nor even whether the system has real-time access to the store's inventory. And, of course, it remains to be seen how willing customers will be to reveal some of the personal details the online recommender system asks when they are interacting with the system in a public setting like a retail store aisle.

Another system mentioned in the article is the Search Engine in the Store^TM developed by Evincii. The description of the system on Evincii's web site articulates a rather comprehensive value roposition:

Evincii's in-store search engine recommends precise and relevant products to consumers in brick-and-mortar and online stores. Our network delivers an interactive, targeted, search-based platform at the point of decision with proven, category-wide and brand-specific sales lift. Shoppers receive personalized advice in seconds. Retailers get happy customers, improved sales efficiency, and increased margins. Product manufacturers get the opportunity to present their products to individual shoppers just before the point of purchase.

According to the article, one Evincii kiosk system, which I believe is [cleverly] named "PharmAssist", has been deployed in Longs Drugs stores in California (Evincii is headquartered in Mountain View) since 2006, and includes targeted advertising as part of their search capability:

Johnson & Johnson is an initial advertiser on the system, which allows advertisers to place ads similar to online display ads, including video, around search results.

But like Google or other search engines, Evincii looks to return "organic" results only based on the criteria shoppers input, such as their symptoms, said Charles Koo, CEO of the private-equity-backed venture. Then, once they've selected a product, the kiosk helps them locate it on the shelf.

I don't know anything about the full range of advertising available for inclusion with "organic" search results, but I find myself musing about how Longs' customers might respond to video advertisements for  "sensitive" products such as Trojan condoms or Ex-lax ... especially if the advertisements include an audio component. The AdAge article also expresses some skepticism.

Mr. Koo, however, said Evincii's research at Longs indicates that 15% to 18% of visitors to OTC-drug departments use the kiosks, numbers similar to those that ComScore found last year of consumers who use online search to research package goods. Stores using the kiosks, he said, had category sales lifts of 3% to 6%.

My observations and judgments are markedly different from those shared by Evincii. Although I don't recall visiting a Longs Drugs store in California during the last two years, I'm reminded of how annoying I found a kiosk deployed at another drug store - I think it was a Walgreens - on El Camino Real in Palo Alto. Whenever anyone got near, the kiosk would loudly offer "Can I help you find something?". While I was there waiting for a prescription to be filled, about a year ago, I informally observed the kiosk for about 15 minutes - from a safe distance - and while I heard the audio offer of assistance at least a dozen times, no one stopped to take advantage of the offer and interact with the kiosk ... and I wondered how many other customers, like me, avoided that section of the aisle like the plague.

Despite having some reservations about some of the examples reported in the AdAge article, I do think that bridging the gaps between online [commerce] and offline [shopping] holds great promise in general. The art - and science - is to design the bridges in a way that offers compelling value to all stakeholders, and to situate them in the kinds of spaces where that value can best be realized.

[Update, 2008-06-05]

I received an email from a reader with more information about the OlayForYou system and the kiosks deployed in stores. The reader would prefer not to be identified, but is willing to permit me to share the information from the email:

• The OlayForYou system does not track behavior over time, a key feature of many recommender systems.
• The system was designed around the concept of "buy soon" - rather than "buy now" -  a shopping list you could cross off one item at a time as your budget allowed.
  
• The kiosks used Rivet Digital Touch Screens and were deployed in WalMart stores. The reader was not sure where, how many or whether they are still in use. The kiosks do not have network connectivity, and so have no access to personal profiles or real-time inventory.
• The kiosk questions are simpler than those on the web site, due to time and privacy constraints of in-store use.

Many thanks to the reader who offered the additional information!