Tracking bricks and mortar customers just like online shoppers
Retailers are looking for ever more cutting-edge methods to understand customer buying behavior and take full advantage of the insights available from new technology and data analytics.
The diverse choices we make as we transverse through a store greatly reflect how we feel about the decisions the retailer has made on the design and selection of goods on display.
We may pause at one display but not at another. We choose one aisle to walk down and ignore the next. Capturing these details as data is extremely valuable to retailers. It is real-life feedback on the success or otherwise of merchandise, displays, marketing campaigns, and size availability.
In fact, tech and data analytics is already providing high level of insights in and around the customer journey. From the route shoppers take through a store, to the places where they choose to pause and the length of time they stay there. The access to technology, big data, and analytics can give retailers more precise information than they've ever had before.
For some time now, retailers have gathered information on what customers buy and have used it to precisely target and tailor their marketing efforts. The downside is the marketing starts to target existing customers that have made a purchase, this in some cases, leaves no room for innovation.
Online, retailers can track customer movements around their virtual store and have an idea which items are abandoned before the checkout stage. Those items that captured an interest, and possible draw the customer to the site in the first place.
It's in-store where, until fairly recently, retailers have been limited in the data they gathered. They've relied mostly on information garnered at the register, meaning their data has been focused on final purchases and not the journey taken to get to that decision. In addition, even more importantly, perhaps the journeys that never reached that final destination.
Wi-Fi and video
Data gathered from Wi-Fi points, and video cameras are set to change all this. It can be used to create a detailed map of customer behavior going into and moving around the store. Brought together with sales system and transactions data it can build a picture of how well a store front serves to bring customers in, where shoppers go within the store, whether the layout makes browsing easy, if checkout lines are losing customers and other insights into customer shopping habits and needs.
In the US, a recent study found that 60% + of shoppers leave Wi-Fi active on their phones, meaning that wherever they go, their phones are pinging off Wi-Fi points, effectively leaving a digital trail.
The phones or tablets don’t need to connect to the Wi-Fi points, just send out their normal ping. The same as if you go into your home or office, the Wi-Fi automatically sends out a ping to connect.
From this data, the movement of shoppers around a shopping center can be mapped, providing insight into the floors they visit and the shops they go into.
Exploiting the data
Data analytics allows the mining of this information in a number of ways. Firstly, it can map in-store movement, creating visual maps and charts to illustrate shopper movement and highlight the pathways customers around stores, where they spend larger portions of their time and what merchandise displays they show the most interest in.
From this, retailers can determine 'hot' and 'cold' zones and, if necessary, make adjustments to the store layout to improve the sales opportunity.
For managers of shopping malls, being able to map footfall gives them the information they can use to increase profitability and maximize rental income. Foot traffic and shopper flow analysis can expose the routes shoppers take through the mall. This is very useful information for potential leasing customers, and also for the mall management team wanting to remodel areas to optimize visitor flow and maximize return visits, additionally for the setting of price zones for mobile retail carts according to traffic level.
Retailers can utilize this information to manage their marketing campaigns as they can better understand which have worked and why helping them to optimize their campaigns to generate the highest level of foot traffic and bringing in of passers-by to the store.
Modification in thinking
Retailers operate in a highly competitive environment where customer insight provides a competitive edge. Through the technology of retail analytics, they can better understand their customers and take sales data from the level of 'what' to the level of 'why.' For shopping center management, this kind of information is likely to become the de-facto standard for retail outlet leasing and will be a necessary component of what property managers supply to retailers.
For all of us, consumers and retail businesses alike; it takes only a subtle shift in mind-set away from the perceptions of a 'big brother' environment to one where we can see the mutual benefit in information exchange, provided it is carried out sensibly and with due regard to privacy.