CloudTags: Digital Insight In Physical Stores

They say that knowledge is power — and for physical retailers, it is a matter of survival.

It’s also the inspiration for in-store marketing technology provider CloudTags, whose mission is to make in-store shopping more informative for retailers, as well as more digitally engaging for consumers.

“Online provides a tremendous amount of data for retailers: what specific products the customers look at, who they are,” said CloudTags Cofounder and CEO James Yancey in a recent interview with PYMNTS’ Karen Webster. “But once you get into physical store environments, most of that data isn’t able to be tracked.”

Until now, Yancey said, when a consumer enters a mall, unless they download apps, sign up and scan barcodes for every item they look at, there’s no record left behind for merchants unless a purchase was made. It’s this gap in customer behavior data that CloudTags aims to bridge for merchants, as well as to provide consumers with a digitally augmented in-store experience.

“We wanted to create the connective tissue,” said Yancey, “that was app-free and browser-based. So that you can go into multiple stores without having to download, sign up and register on your smartphone.”

In a nutshell, CloudTags works with merchants to create connected stores using app-less technology to both provide customers with a digital shopping experience in-store, while allowing merchants to collect data on in-store customer behavior and interactions.

It starts with what Yancey calls a “cloud block,” a modular, repurposable physical fitting structure for tablets. “You can invest in a single unit that sits on a shelf edge,” said Yancey, “or you can take all the individual units and snap them together to build a wall.”

These interactive screens, said Yancey, can be used by online native merchants looking to experiment with pop-up stores to showcase their extended digital catalog of goods, while housing select items within a limited square footage.

Likewise, traditionally brick-and-mortar retailers can use the screens to enhance the physical store experience with digital functionality. Current brands that use CloudTags’ technology include Crate and Barrel, Timberland and Ashley HomeStore, to name a few.

When consumers enter a store using CloudTags, they can enter the store’s domain on their smartphone to interact with the in-store screens by sharing mobile browsing cookies or an email if the customer so chooses.

Shoppers can select an item on the screen and then browse through similar and suggested items related to the first. This creates a closed loop of recommendations, said Yancey. “As soon as you touch something on the wall, two additional data inputs update what’s happening on the wall in real time.”

As the customer browses on their phone, the next item to appear on the in-store screen is updated. “The wall is the visual stimulus that is getting you to move information onto your phone,” Yancey noted. “You’re viewing more information on your phone, and as you’re doing that, we’re updating the wall.”

The benefit is twofold for merchants. The first means increased consumer engagement in-store. The second comes when the customer leaves — because now the merchant has the consumer’s in-store browsing data, which can allow for larger, more targeted digital marketing campaigns from using data from physical stores.

CloudTags has found that in-store digital engagement significantly increases open and click-through rates for advertisements and promotional emails. “If I go to the store and I engage digitally, the open rate for those ads and emails is 30–40 percent greater, and the click-through rate is sometimes 50 percent greater,” said Yancey.

From the data CloudTags’ technology brings in, Yancey said that participating merchants have found that, while the specifics vary by segment, an average of 70 percent of customers who engage with the digital wall but don’t buy in-store were previously unknown in the merchant’s existing analytics.

“People who are digitally engaging in the store are not the same ones engaging on the website,” he said. “If that [in-store] customer goes and buys online a day, a week, six months later, merchants now have that mobile browser cookie, and they’re able to use to attribute that value.”

Another benefit, said Yancey, is that merchants looking to optimize the use of floor space can use the customer data collected by CloudTags to prioritize what items to display in physical stores. These are what Yancey refers to as “connector products,” items that both sell well and, by association, for whatever reason, lead customers to look at a number of additional relevant products as well.

“The objective,” he said, “is not to put your top-selling physical items in the store. It’s to do an analysis of products that will lead to the consideration of more. As in, when consumers physically see this couch, it encourages them to also look at five or six things in the digital space versus just buying the couch.”

In an age where digital retail is rushing to the forefront, having this kind of insight handy is an invaluable tool for merchants looking to optimize the use of physical floor space. Knowledge is power, after all.