Five Lessons in Customer Experience From Portugal

When you think of global hotbeds for innovating the customer experience, Portugal probably doesn't make your list. But don't let the European country's modest stature fool you. This small nation of just 10 million is packed with savvy and innovative early adopters.

For example, Portugal was one of the fastest adopters of mobile phones, creating the first prepaid SIM card solution in Europe.

Consumers' craving for innovation coupled with a lack of natural resources have forced Portugal retailers to get creative to stay ahead of the curve. As a result, IT firms such as Enabler — a specialist in consulting and implementing integrated retail systems that was acquired by Wipro — have emerged to satisfy rising customer expectations.

These factors have made it an excellent petri dish for implementing new marketing and customer-tracking experiments. Here are five lessons U.S. retailers stand to learn from Portugal's innovation in the customer experience sector:

1. Leverage technology to optimize prices and store layouts
More retailers have begun integrating technology such as heat maps and tracking zone visits and dwell time to regularly test new layouts and adapt store concepts to the region.

To help 7-Eleven Mexico achieve a culture of loss prevention, Portugal-based WeDo Technologies implemented its RAID 7 business control software, allowing the retailer to proactively track inaccuracies in inventory. Now, 7-Eleven can keep a pulse on inventory in multiple locations and segment prices across the company.

U.S. retailers can also leverage Wi-Fi and location data to track customer and inventory movements and glean valuable insights. If your retail store isn't located in a Wi-Fi-saturated area, use GSM for a more accurate data set and a minimal counting error margin.

2. Don't underestimate the power of human analysis
Technology can only go so far in piecing together human intent. Continente, a Movvo client and one of the largest food retailers in Portugal, actively scrutinizes customer behavior and uses this information to perfect the in-store experience.

Using visual analysis, ticket analysis, and questionnaires, the retailer studied how people behave in the cultural section of the store. By rearranging stores within the location, it created a more attractive and customer-friendly layout and boosted sales by 6 percent.

3. Repurpose existing tech
Too many retailers bank solely on new technology solutions for increased profitability. But new tech can be expensive and difficult to implement across locations.

With the economic crisis that has plagued Portugal the past few years, Portuguese companies have been forced to apply more frugal business practices. As a result, they've learned to leverage existing resources to maximize profits and improvise under trying circumstances.

For example, managers at Continente repurposed equipment originally designed to print service tickets into a “Coupon Kiosk,” allowing customers to print their loyalty card coupons in the store. Customers loved it, and coupon usage skyrocketed, generating €100.000 in monthly savings (roughly $109,845).

Look at the resources you already have before choosing to invest elsewhere. By optimizing your current tech or finding innovative ways to repurpose it, you can offset the costs of tech while making visible operational improvements.

4. Surprise customers by treating them like royalty
Most people don't expect the royal treatment while shopping at a discount chain. They accept a subpar shopping experience in exchange for savings. But what happens when you elevate the experience and delight these customers? The Portuguese management team at the discount chain Lidl set out to determine just this. When it brought fresh local products into stores, including an almost automated bakery system where excited customers could buy hot, ready-made pastries and bread (staples of the Portuguese diet), sales skyrocketed, and the new brand exploded in popularity.

5. Incorporate a strong back-office technology suite
Retail data can be just as problematic as it is enlightening if you don't gather and organize it wisely. When used correctly, data can help paint a clear and compelling picture of your retail location's strengths and weak spots. At its worst, it can be overwhelming and confusing, telling you everything except how to make productive changes.

Make sure you build your business on a strong analytical foundation by investing in a robust back-office technology suite. This business intelligence suite should have the power to integrate all the data sources you're receiving — campaigns included — into a standard format so you can analyze them effectively and crystallize your view of the customer experience.

By crossing data from zone visits and dwell time with campaigns numbers, Sport Zone has developed a solution for evaluating the sponsorship of sporting events and marketing campaigns more accurately. It also optimized layouts in its stores.

Portugal might be a small country overshadowed by the Goliaths of the world, but it's generating some big ideas that can inspire U.S. retailers that want to work smarter, not harder.  

Roberto Ugo is co-founder and CTO of Movvo, a platform that measures the flow of people in physical spaces and helps retailers enhance customers' shopping experiences. Ugo specialized in business data networks and e-commerce at Boston University and the University of the West of Scotland and has an international background in engineering and computer sciences. Movvo won the first MIT Portugal Venture Competition and has offices in Portugal, Boston, and Silicon Valley.
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