August 2014 Integrated Solutions For Retailers
By Adam Blair, contributing editor
Sophisticated solutions give retailers real-time tools to track and influence in-store behavior.
Location-based analytics have come a long way from simply counting how many customers come through a store’s front door. Sophisticated solutions that use a variety of new sensing technologies can track customer movement and behavior down to the level of micro-zones and offer the ability to respond in near real time, according to ShopperTrak Chief Product Officer Chetan Ghai. He reveals how analysis of aggregated customer movement data can be used to determine the most effective store layouts and signage, creating a better customer experience and maximizing in-store sales and profitability in the long term.
What are the most important benefits of understanding customer traffic?
Ghai: Comprehensive location-based analytics solutions can provide insight into consumer behavior that enables retailers to enhance the shopping experience and drive revenue. Using a combination of perimeter, interior, and performance analytics offers bottom-line benefits that include increasing traffic, conversion rates, and average transaction sizes.
Perimeter analytics leverage traffic, labor, and sales data to optimize marketing and operational effectiveness, allowing retailers to measure, monitor, and modify their efforts to optimize traffic, power hours, draw rate, and staffing. Within the store, interior analytics give full visibility into where consumers go, how long they stay, and whether they return. Retailers also can gain insights into dwell time, loyalty, abandonment, counting within specific store zones, sales intercept, and queue stats. Having this info allows stores and the malls housing them to better plan operations, marketing, and merchandising. Performance analytics simplify and synthesize huge amounts of data into actionable insights for retailers.
These kinds of integrated location-based solutions can help retailers determine their best-performing stores as well as those with the most improvement opportunities. These kinds of solutions can also help stores establish target conversion rates and provide guidance as to where marketing efforts should be focused.
How do you ensure that in-store data gathering techniques don’t violate consumers’ privacy/comfort level?
Ghai: Our ShopperTrak product does not gather any personally identifiable information. All of the data we collect is anonymous and is provided to retailers in an aggregated summary form.
In an e-commerce environment, customer analytics can be used to formulate real-time responses. How can retailers enable real-time or near real-time responses in the store?
Ghai: Using real-time information, retailers can monitor performance in 15-minute increments at the store and enterprise levels. If they notice a significant difference between plan versus actual, they can quickly start to redistribute sales staff, engage in on-floor coaching, or implement promotional incentives to meet their goals. At the enterprise level, retailers can assess the success of local marketing and advertising activities and adjust their strategies accordingly.
What can retailers learn about planograms, store layouts, signage, etc. to help guide changes to the store itself and to the customer experience?
Ghai: Retailers spend millions of dollars collecting data on mystery shopping trips each year. Their aim is to test signage, store layout, and the overall experience with the staff. Much of the data that is collected manually on a tiny sample of their shoppers can be collected across a far greater sample with better accuracy using location-based analytics. For example, retailers can use this more accurate information to determine if signage is helping or hurting window conversion or draw rate, or to assess if customers are being helped quickly. They can also quickly and more cost-effectively test new layouts or formats to determine their impact on the bottom line before rolling out a new design across their entire chain.