Let’s Face It: Facial Recognition for loyalty programs

By April 29, 2019Insights

Is it too late for predictions? 2018 was the year landlords and retailers found themselves on the same side of the table—as partners—against Amazon. 2019 will be the year retailers utilize AI to recognize their best customers at the beginning of the journey—as opposed to the point-of-sale when it is just about over.

Sephora, Starbucks, ULTA Beauty and Kroger are making impressive inroads with their loyalty programs, which now account for an exceptionally high percentage of their sales. But if retailers could engage their best customers earlier, the experience could be exponentially more powerful.

Facial-recognition technology can enable them to do exactly that.

Unfortunately, though, most of the media coverage about these tools focuses on surreptitious efforts to bust shoplifters. The $1 billion lawsuit filed by an 18-year-old shopper against Apple is an example. According to media reports, Apple relied on facial-recognition software to falsely accuse the New York teen of stealing $1,200 worth of Apple pencils.

My prediction is that more retailers will start using AI this year to recognize shoppers either at shelf or as soon as they walk through the door.

The potential upside here is immense: You stroll into Madewell, your profile pops up on an associate’s tablet and she takes you right to that hard-to-find pair of jeans—the one you clicked on last night at madewell.com—in tall. In sidling up to the Apple Store Genius Bar, you no longer have to explain that you own a brand-new MacBook Air but a third-generation Apple Watch. “Have you seen what the fourth-generation can do?” the Genius asks. “It’s amazing.” At Best Buy, store associates have access to tremendous intel about the products and services on sale. What if they knew more about the preferences of the My Best Buy members they serve day in and day out?

As retailers continue to explore the potential of facial-recognition software, they will definitely need to be sensitive to the risks.

I have faith that retailers will find the balancing point. Shopping will be faster, easier and more fun as a direct result.

Rachel Elias Wein

Rachel Elias Wein

Rachel Elias Wein founded WeinPlus, a strategy and management consultancy focused exclusively on retail and real estate organizations, in 2009. Ms. Wein serves as the principal strategic advisor for industry-leading public and private real estate owners and national retailers. With over 15 years of management consulting experience, Ms. Wein’s expertise is focused on leading enterprise-level strategic change.

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