What is your store showing you? Understand it with retail analytics
Video surveillance has historically been used to monitor for loss prevention, recording footage to later be reviewed. Of course, that is a basic and prevalent function that is still necessary; thorough coverage of your store is crucial. But what if a surveillance solution could do more—to not only prevent losses but increase efficiency and ultimately boost the bottom line? You can – with integrated network video and audio solutions including analytics.
Brick and mortar versus online
There are several factors causing you to lose in-store foot traffic and sales, including competition from ecommerce sites, lingering concerns regarding Covid-19, lack of merchandise and poor customer service. You invest heavily in surveillance for loss prevention in an effort to protect your stores and assets. While this can dramatically reduce losses resulting from theft, it becomes a moot point if your stores are empty. The secret to a successful store is in a good customer experience. This provides a compelling reason to get customers through the door.
Shopping online is often more convenient for shoppers. Customers can browse at their leisure and have goods delivered directly to their front door. By going into your store, the customer is sacrificing the convenience of shopping online but this is where opportunity lies. Of course, there are downsides to online shopping that could make an in-store visit preferable. Visiting physical stores allows customers to touch, feel and try products before purchasing them. Even with reduced delivery times, online retail struggles to match that. However, sometimes visiting a store can be a burden, especially when there are long wait times at checkouts and poor customer service.
The customer needs a reason to choose going into your store over shopping online. And that reason is the in-store experience. The majority of your relationship with the customer is dictated by what the latter experiences within the store’s walls, which is something that is often in your control.
Therefore, you must find ways of adapting to accommodate customer preferences. This comes down to two things: prompt service and a personalized in-store experience. Essentially, the ideal conditions for this combine the convenience and ease of online shopping while maintaining the benefits of an in-person experience.
Personalization is key to driving sales conversions. According to recent BCG survey, a personalized journey boosts the number of items purchased (by 110%), the value of an average order and satisfaction level of customers. Doing this well requires you to collect different data points from customers while in store and apply any insights to inform future changes. This also continues after your customer leaves the store and can be used smartly in communications materials.
Retail intelligence from integrated solutions can enable better decisions for procurement, marketing, merchandising, and operations. And enhance customer experience, optimize staff productivity and boost your in-store campaigns.
To provide the best service possible, you need to start “listening” to your store because there is a lot it can tell you. In addressing some of the following questions, you’ll gain insight into how to better optimize your store:
- How many people walked into the store?
- Once they are in the store, where do they go?
- How can I proactively manage queue lengths and response times?
- What is my in-store customer conversion rate?
- Where do people loiter?
- Where and when do we need staff?
- How can I detect specific events (like customer waiting in the Click and Collect area) when short of staff?
- Are there empty shelves that need re-stocking?
- What deliveries are coming in and who is delivering these?
The answers to these questions can help you eliminate inefficiencies while tailoring your store to each visiting individual.
The subtle presence of retail intelligence
To look at retail intelligence at play, let’s take a look at a customer’s typical journey while shopping in a retail store:
Our fictional customer, Julia, is a 38-year-old woman. She enters a store, which is relatively busy, looking for shoes to complete her outfit for a wedding she is attending a week later. On her way to the shoe section, Julia sees endcap displays with T-shirts for sale. When she sees this advertisement, she remembers that she needed to buy T-shirts, so she decides to pick some up. Julia then walks to the shoe section and is greeted by an employee. Immediately, she sees an ad playing in the background displaying a pair of high end heels, reminding her of the shoes her friend bought for the wedding. She approaches a nearby employee and asks if she could get the heels in her size. While she waits, she enjoys the background music.
Intelligent solutions can help you accurately influence buying decisions.
The ad did exactly what marketing is supposed to do: capture the attention of the intended audience—in this case, Julia.
Although the store didn’t know that her friend owned the shoes, they did know that a woman is more likely to buy a pair of heels than a man is. Demographics analytics were able to estimate Julia’s general age and that she is woman. As a result, it changed the digital signage display from a man’s dress shoe ad to an ad displayed specifically for a woman in Julia’s age range. Ultimately, this influenced her purchase.
Heat maps provide data which indicate traffic hot spots within the store. This allowed the retailer to place items at specific end caps which ultimately grabbed Julia’s attention. With nearby employees in the area, the sales floor was appropriately staffed to handle the number of customers that were in the store at that time, allowing Julia to receive immediate assistance from one of the employees. The music playing throughout the store was selected to match the store brand, which has an impact on the customer experience and ultimately sales.
Toward the end of Julia’s journey through the store, she heads for the checkout area. She sighs when seeing that the open line already contains four customers, but then an audio announcement suggests to check out in the self-service area. Julia completes her purchase and leaves the store with her shoes in hand and a smile on her face.
Analytics can help to support your staff, so they can process items quicker. The same technology that influenced Julia’s purchase also works to optimize other areas of the store to ultimately enhance customers’ experiences. Julia was satisfied with her experience, and as a result, will likely visit again.
Not only was Julia’s purchase an influenced decision, but the technology in place helped ensure Julia’s visit was quick and effortless.
One solution, multiple purposes
Let’s take a closer look at the technology that allowed for Julia’s successful in-store experience:
- People counting: count in real time the number of people passing under the camera and in what direction. Armed with this data you can use these insights to inform decisions, such as staffing levels during peak times. In addition, this helps you comply with restrictions around social distancing as necessary.
- Queue monitoring: track how many people are standing in a predefined area (e.g. a queue) and the level of activity within that area. It can also be used to trigger real-time push alerts to staff or speakers if the queue is too long. Find out the average waiting time and churn rates, allowing you to swiftly make alterations.
- Demographic identification: provide statistical information on visitors’ gender and age groups. It can also be used to trigger digital signage messages based on age/gender.
- Network audio solutions: provide in-store background music and enable live and scheduled triggered or non-triggered announcements.
- Heat maps: enable quick identification of hot spots, dead areas and bottlenecks to visualize traffic patterns over time as well as in real-time.
- Digital signage: enable targeted marketing messages to visitors based on age and gender when integrated
This integrated solution enhances your customers’ in-store experience. Fundamental statistics that most stores have may provide information on current sales and transactions, however they do not provide you with insight into efficiencies and inefficiencies.
Below is an example of real statistics in action, which have been used to benefit store operations. The statistics compare two stores in a similar geographical location with similar customer demographics. Naturally, sales are a driving factor in determining store performance, but that may be an issue when you aren’t collecting additional customer insights.
When simply comparing sales figures, Store A is clearly the outstanding performer, earning nearly 30 percent more in sales than Store B over the course of the last week. Store A had more transactions and a higher average purchase value and slightly less items per transactions. By looking at these four KPIs (key performance indicators), Store A is the better performing store. When analyzing the data provided by the retail video analytics deployed at both stores, Store A had three times as much foot traffic than Store B which had 15,953 visitors compared to 5,276.
But what is this data actually telling us?
It is telling us that the conversion rate, the number of visitors that came into the store and made a purchase is significantly lower at Store A than it is at Store B. Store B did a much better job turning their visitors into paying customers.
As management, we can attempt to find out what the employees or managers at Store B are doing right and apply these same strategies to Store A to boost sales and take advantage of opportunities to optimize the customer experience for every visitor. When analyzing other metrics, we also discover that Store B’s visitors are staying in the store longer than Store A, while also standing in shorter lines, which raises further questions to be analyzed, such as: What is happening at each of these stores and what is the best model to apply to the organization to boost the bottom line? Average queue lengths make a substantial difference when it comes to the customer experience.
Understanding the customer through analytics
Visiting a store can be overwhelming and stressful, especially if items are out of stock, it has poor customer service and long service queues. To avoid this, you should always keep the customers’ needs and preferences top of mind in part by making it easier for customers to find needed items, enhancing the in-store experience with friendly, knowledgeable staff and decreasing overall customer service wait times.
Otherwise you may continue to see customers leave for competing stores or, worse, convert to 100 % online shopping.
Learn more about Axis retail solutions.
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