In-Store Analytics - Bringing Digital Analytics to Brick and Mortar

In-Store Analytics

Bringing Digital Analytics to Brick and Mortar

Gordon Oremland

     There is no arguing that digital analytics helps a business maximize the performance (by whatever criteria they choose to measure this) of their online presence. But what are businesses supposed to do about their retail settings? Well, the answer to that is simple (or seemingly so): Digitize it!

      Simply put, the behavior of customers in retail stores can be viewed as being very similar to the behavior of visitors. They arrive, they may leave, they may wander and browse, they may view a particular item, compare it to another, etc. In the end, they either proceed to the check-out with their shopping cart or abandon it. See, even the terms used are the same! We need to find a way to track a physical customer's activity in a store to apply some useful analysis. Unfortunately, the usual three exit questions are insufficient:

• Did you find everything you were looking for today?
• How did you hear about us?
• Would you mind filling out a brief online survey in exchange for a $X.XX savings on your next visit?

These are all helpful and useful, but they don't offer the depth that current digital analytics provide in the online world. Enter the realm of In-Store Analytics!


     Online Digital analytics offer information such as where someone clicked, how much time they spent, where it was spent it and then what purchases were made.

     So ... how do they do it? There are several technologies at play here. I will discuss a few of these.
     Just a few companies with solutions in this area are:

• Path Intelligence
• RetailNext
• Nearby Systems
• Ekahau
• Shopperception
• Euclid

     These companies offer a mix of different tracking modalities, some of these will be discussed here.

     Video: a series of cameras located around the store and connected to the monitoring system. When a customer enters, they are scanned and registered on the system along with their entry time facial recognition software can give them a unique identification to follow as they work their way around the store (as a side note, this information can be stored to track return visits). The system can then track their whole behavior throughout the retail visit. The system can track where you walked, where you lingered, WHERE YOU LOOKED! If a shopper comes in and leaves without lingering anywhere - BOUNCE. If a customer fills a cart then leaves it - CART ABANDON. If a customer leaves with an item not paid for - SHOPLIFTING!!!(ok not a parallel to online, but useful in loss prevention - remember the facial registration?). When a person checks out, they may provide personal information. This can be linked to their facial identity. With this information combined with their purchases, the areas they browsed, their email address (if provided), previous purchases, membership in a loyalty club, etc. Can be used to customize offers and content than can be served to them via a variety of channels.

     RFID tags: Another way to visualize consumer motion and behavior around a retail space would be to use a series of sensors and RFID tags. With sensors placed throughout the retail space, RFID tags can be placed on shopping carts, baskets, merchandise tags, etc. By tracking the motion of these tags around the store, much of the same data than could be retrieved from the video option can be gleaned as well. Timing on a cart or basket begins with the removal of the cart from the corral. Timing ends with return to corral or with proximity to checkout. The time spent lingering at any given place can be recorded and logged for analysis or even real-time viewing. If an even greater depth of information is desired, a sensor can even be placed on the cart. This way, the system could even track what items were placed in or discarded from the cart. This can be very telling if an item is discarded and replaced with another similar one (for re-shelving purposes, it can even tell clerks where a removed item was left). If it is a store with a customer loyalty program, the loyalty card can be tagged with an RFID device now allowing specific tracking of identified customers. Again with this information, specific customized deals and information can be served to the customer later.

     The most intriguing, in my opinion, of the technologies is that of Smartphone Tracking. As has been discussed widely elsewhere in this blog, the sheer number and prevalence is staggering. More importantly, most of these devices are WiFi enabled. Most of the phone holders have limited data plans and so use WiFi at home or whenever they can. Most of us don't turn off our WiFi capability when we leave home. Therefore many people entering a retail establishment have a personal WiFi device in the "on" mode in their possession. What many people don't realize is that these devices send out a periodic "ping" looking for nearby WiFi. This ping contains some information including the device's MAC address. This can be detected and, with the right sensors, tracked. This tracking is accomplished with sensors attached to the store's network and placed in various areas around the store. This even allows behavior outside the store to be tracked! A retailer can see how effective their window display is at attracting customers. Since the ping is automatic there is no opt-in or out issue. On the other hand, if the store provides a free WiFi service in the store, even more personal information can be linked. If
the user logs in with their customer loyalty account?!?! You get the idea.

     So, what's the big deal? These systems turn a physical Brick & Mortar retail space into a digitally active analog for a web site. Now that that is done, the motivations and actions are the same as in the online world. The goal remains to get people into the store (site) view your merchandise (view pages and content) and make purchases(conversions). This is the case at least in retail although other brick & mortar settings can make use of this as well. They just need different conversions. A few examples would include a library, a medical setting, a conference, etc. For now, I'll only address commercial instances.

Eye Tracking

     One of the things site administrators are trying to achieve through analytics is to determine where people are looking on their site - literally - where they are looking. using eye tracking, the places an eye looks, tracks to and lingers can be mapped. This helps give insights as to what display content is effective. The site can then be adjusted to maximize effectiveness. This is easily applied to a store. With the previously discussed technology, you can readily track location and location density in store. Furthermore, depending on the technology, you can track which lingers led to which purchases. Another specific example of this utility is best illustrated with the following scenario:

In-Store Tracking Heat Map

     Imagine a popular retail electronics chain. For the sake of argument let's call it Superlative Purchase. They have several large live game console displays near the game consoles for sale. People can come over and play on them. These displays use up a fair amount of maintenance, display real estate and to a small extent power. These systems can track the amount of time people (and potentially specific people) spend on the console and determine whether or not this playtime led to a purchase. If it leads to purchases, then keep it. If no purchases happen from this feature, the space could be shifted to more productive use.

     This, of course is not the only use of these analytic tools. They can be used for all of the purposes and with most of the measures that online provides. in some cases more. If there is an area in the store of chronic bottleneck, this can be mitigates. With the use of real-time heat mapping, if there is a temporary bottleneck, it can be addressed immediately. There are a couple of exceptions. There is a great deal of information in online analytics. For example, there is geographical information with website visits. This is not necessarily the case in-store unless the shopper fills out a loyalty membership form or is already a member. On the other hand, in all likelihood, in store visits are from local customers. Another lacking measure is that of referring site. This, however, can be mitigated by the second question at the beginning of this article. Furthermore, there are several measurements of referral sources that can be integrated from various nonline sources such as offer codes, coupons, etc.

     In conclusion, it is clear that there are many benefits of being able to leverage web analytics. Now, with the addition of some technology, physical stores can apply some of the same powerful analytics to obtain insights to improve their businesses. They can even be beneficial to stores without an online presence. On the other hand, with an online store as well, the information can be combined, integrated and information can be served to improve conversions and customer experience even more. A few different technologies have been discussed. No one technology alone will provide as deep a set of data as a combination of them. In fact the above listed companies all use a mix of these (and other) technologies.

References:

http://www.retailnext.net/ 

Not covered in this article, but interesting:
http://chainstoreage.com/article/using-store-analytics-combat-showrooming

http://euclidanalytics.com/product/how/

http://phys.org/news/2011-11-google-analytics-inventor-concept-physical.html

http://shoppersciences.net/in-store-analytics/

http://postscapes.com/in-store-analytics