How the music played in bars and shops is listening to you
It’s an early summer evening at The Garden State Hotel in Melbourne's CBD. Patrons chat as they place orders at the bar. Unbeknown to them, cameras overhead are scanning faces to measure the age, sex and mood of people who walk by.
“We’re on a path of understanding human behaviour and how music impacts with that,” says Matt Elsley, co-founder of commercial streaming service, QSIC, which provides the technology to The Garden State Hotel to read patrons faces and select music.
A 2017 study by Soundtrack Your Brand analysed 1.8 million sales transactions and over 2000 customer surveys and found overall sales could be boosted by as much as 9.1 per cent in venues which played music that matched their brand compared to randomly selected popular songs.
Commercial streaming services are going to new lengths to understand shoppers, using artificial intelligence and machine learning to play music that influences the "moods, mind sets and behaviours" of retail and hospitality customers.
"Music is highly emotive. It’s just that medium that can transport you back to anywhere," says Elsley. "So it's about tapping into how to play content that should mean something to people."
The Garden State Hotel is one of the hundreds of venues across Australia that now use QSIC technology to tailor music to suit their customers in an effort to boost sales.
From cassettes to AI
In 1989, there was only one company providing licensed music to retailers.
“Every retailer got the same 90 minute cassette tape,” says Dean Cherney, owner of in-store music provider, Marketing Melodies.
At the time, Cherney was studying marketing at Monash University and for an assignment, he designed a business that tailors cassette tapes to match retail brands.
“I could see that Portmans was very different to Esprit and Sportsgirl, they were targeting a similar market but they were different.”
“As a DJ, I was very much about curation,” says Cherney. “So I said I’ll make you a cassette that’s targeted to you.”
Fast forward 29 years and Cherney is still refining his ability to match in-store music to shoppers. He's trialling digital duke boxes, tempo recognition and Marketing Melodies is also venturing into artificial intelligence.
Marketing Melodies now turns over around $3 million a year and key clients include Kookai, T2, Bed, Bath & Table and Camilla.
‘More accurate than Google’: QSIC
QSIC is leading the way in Australia's site-specific in-store music offerings. It has just patented and trialled Autonomous Volume Adjustment, AVA, technology that uses artificial intelligence to “listen” to environments and autonomously adjusts the volume of individual speakers.
“We’re more accurate then Google because they’re only tracking through the phones but we can hear [the customers] and so we understand what they actually sound like,” says Elsley.
Started by Elsey and his Melbourne bandmate Nick Larkins in 2014, QSIC originally offered a music streaming service to businesses that safeguarded them from breaching Australia’s intricate copyright laws.
With the launch of AVA, QSIC has an annual turnover of $4.4 million and employs 23 people with an expansion to the United States on the horizon.
QSIC’s AVA technology has been trialled in hundreds of retail and hospitality stores across Australia, including McDonald's, Caltex, 711 and Sand Hill Road pubs and bars in Melbourne which includes the Garden State, Espy and Terminus Hotel.
The data through cameras and audio recordings is combined with external factors such as weather and major events to tailor the in-store experience to its “context” in an effort to boost sales.
“We talk about ourselves as an experience lab. We don’t see ourselves as big brothering customers,” says Elsley.
The cost of implementation varies depending on the level of technology implemented with basic plans starting at $120 per month.
We don’t see ourselves as big brothering customers.
Matt Elsley, QSIC co-founder.
QSIC is also looking at points of sale to see what type of music is linked to upturns in sales.
“Not so much from a genre or artist, but we’re looking at the music characteristics. What are the characteristics that are consistently linked to up-turns in sales?
“It takes time to do this. There is a science to it,” says Elsley.
At a time where bricks and mortar retail is at the mercy of online competition, Larkins says it’s never been more important to enhance the in-store experience.
“You can sit and home and order Uber Eats, you can get dates online, you can order taxis, you don’t have to go out anymore. So products like us allow people to go leave the home, have an experience that they can’t have at the home.”
But QSIC is not naive to the power AI can hold and Elsey and Larkins say it is up to their clients to ensure they abide by the law using technology such as facial recognition.
“I think we really need to be careful and understand what we’re doing.
“I think it’s [AI] going to be very difficult to unwind and as long as we’re going into it asking the right questions, developing in the right way, I think it will be hugely beneficial,” says Elsley.