Gamification in retail: What’s in store for Canada

Brent Houlden doesn’t just talk the gamification talk. He walks it. Literally.

As the Toronto-based partner at Deloitte told us, he uses the Nike FuelBand, a wristband that measures your daily activity level by tracking how many steps you take each day. Not only can you set your own private goal, you can also share your goal and progress with friends on social media. The sharing not only motivates you to reach your goal, but also brings a social, fun, competitive aspect to the endeavour. Voila, one example of gamification.

“It’s personal and it’s also a game,” says Houlden, national retail practice leader at Deloitte. “They turned exercise, which is not fun, into a game.”

To pick his brain for further insights into how gamification is revolutionizing retail – and how Canadian startups can tap into the trend – we managed to catch up with Houlden in between strides towards his daily activity goal.

Q: How quickly are startups, overall, harnessing gamification as a tool within the retail sector? 

A: Before we were using the word ‘gamification’… the gaming people were all noticing that young people don’t go to casinos or go to horseracing or play lotteries. But they were playing games. So everyone started noticing that the young people were disengaging from classic games. And even the mall visits by young people were down dramatically. I think everyone in society was starting to observe that the only time (young) people were truly engaged is when they were playing games. And I think the startups were far more aware of that, being younger and more fleet of foot than your classic retailer who wasn’t that observant that maybe people weren’t (shopping in stores) as much as before and weren’t that engaged.

Q: Where does Canada fit into the gamification scene within retail today? 

A: I think Toronto – and Canada – is producing more than its share of apps. There’s (Ryerson University startup) Flybits.  Their (GO Mobile) transit app will tell you if your train is early or late. It allows you to have that information and if your train is really late, someone like Tim Hortons will offer you 50 per cent off a coffee, to drive sales of their coffee after work hours.

And Hotspex is a market research group in Toronto. They do a lot of emotion research. Generally we’d say ‘Did you buy toilet paper this week? Did you buy Scott’s (Paper) brand?’ What they’re trying to do is find out what was the emotion that caused you to buy that. They’re doing a huge amount of research around spontaneous purchases. They’re trying to see what gives you pleasure, and at what point are you going over your (shopping) budget; at what point are you more receptive to an offer or a game.

Q: Which areas of gamification technology do you see as having bigger potential for growth and commercialization at this stage? 

A: If I had to pick one I would pick something called a temporary app. It’s something that’s just good for 90 days, say. So it’s a temporary mobile app and for 90 days you get an extra five per cent off items in the store and also five (per cent off) per friend. It’s not meant for five years from now. It’s not something you’ll use your whole life.

Q: So the fact that it’s temporary – and the consumer has to use or play the app within a short time frame – helps motivate them to buy into it? 

A: You want them to take action so you give them 90 days. You’ve got to create some game or excitement around it. That’s all part of a game. A game is (about) dopamine, which is the sense of feeling good, the sense of excitement.

Q: What advice can you give to Canadian startups looking to get into gamification for the retail sector? 

A: I wouldn’t be too narrow in focus. Gamification has (market) potential for customers and employees. It could be a way to keep employees engaged. Ultimately I would just focus on engagement and I would treat it as one of many tools. I think you have to bring together a lot of different thoughts and technologies. And gamification is just one piece. Gamification is a tool that’s being used to get engagement but you might be combining it with loyalty or with behavioural science. Gamification is just a tool. But it’s a very powerful tool and it’s aimed at young people.

Q: I’ve got to bring this back to the Nike FuelBand! Since it doesn’t directly require or motivate users to buy other Nike products, what’s the business payoff for Nike? 

A: I think it’s huge brand awareness for them. Plus they get all this data on (users). I give them all kinds of personal data. So not only do they have my email, they know who I am, they know I’m married, they know my age, they know my activity level. They know this about me as a consumer. Suddenly Nike has all this consumer data.

That’s pre-purchase (data). Today you’ve got all this pre-purchase, purchase and post-purchase data, all digitized. That’s what most retailers don’t know how to deal with. How you bring all that data together is what the retailers are struggling with.