There’s no longer any doubt that traditional retailing is being shaken by increasing competition from ecommerce. In this highly competitive environment, brick-and-mortar retailers are now using indoor analytics to level the playing field by getting the critical information they need to become smarter, more efficient and more effective.
Brick-and-mortar retailers can now measure and analyze in-store customer interactions in a way that’s similar to what ecommerce systems have been doing for years. Thew rise of ecommerce continues to attract media attention, but brick-and-mortar stores continue to outperform other channels, generating over 90 percent of annual retail sales. However, ecommerce and mobile shopping show significant growth and increases year over year, capitalizing on convenience and efficient customer experience.
This adds up to intense pressure on physical retailers who are competing with vendors in the digital universe—and often also competing with their own brand’s online channels. As retailers continue to seek new ways to maximize their most valuable assets — their physical stores — it is essential for them to measure their success in attracting and converting shoppers. For multi-channel businesses, the days of analyzing customer interactions online, but not in the physical world, are quickly coming to an end.
These new data points (and the corresponding new ways of thinking about analytics) are changing the discipline of business intelligence in retail. Retail Systems Research (RSR) found that 55 percent of retailers identify the store as the channel that can most benefit from BI. The big wins will be in the incremental improvements made throughout stores utilizing multiple data points. Incremental gains add up multiplied across lines of business can significantly improve sales performance and customer experience.
Web analytics can be easily translated and applied to the physical store environment:
In-store Shopper Flow Is Like Site Navigation
Shopper Flow measures where shoppers travel within the store, including the paths they take once they enter, direction traveled, most or least traveled paths, and which entrances are frequently used. Multiple store teams such as merchandising, operations and marketing can leverage this data to enhance performance.
In-store Cross Shop Is Like Referral Traffic
Indoor analytics provides visibility into which departments are truly connected by cross-shopping behavior. Understanding which departments are connected by behavior reveals much more than sales data alone. This information informs store layouts and product placement and is also insightful for setting up effective cross-promotional marketing.
In-store Dwell Is Like Time-on-Site
This analysis is used to measure shopping time per visit and by department. The results provide insight into customer engagement and interest. The data also enables manages to fully optimize resources including staffing, promotions and merchandise. As seasons change, promotions and product categories rotate, and the associated shopper dwell time shifts as changes are made within the store. Now the impact of those changes can be analyzed. Measuring dwell helps retailers set benchmarks and address in-store behaviors. Dwell is also used to synchronize content loops of digital signage to maximize messaging impact.
In-store A/B Testing Is Like Webpage A/B Testing
Analyzing consumer behavior in stores can improve performance by highlighting what works and where there are problems. This behavioral feedback allows retailers to assess the effectiveness of each evaluated tactic, offering detailed insight far beyond what sales figures alone can provide.
Top Departments/Top Products Visited Is Like a Site’s Top Pages Viewed
Identifying which departments and products are most visited is critical in assessing the value of the department to the store. Sales data, for its part, only reflects transactions, not actual visits by shoppers. Shoppers may go directly to a product which has been promoted, indicating a successful marketing campaign. If sales are not in line with this behavior, then retailers may be seeing a showrooming behavior or may have other challenges in converting visits into sales.
Online retailers have successfully proven that leveraging analytics drives conversions and improves shopper experience. Indoor analytics provides these same invaluable insights to physical stores, closing the data gap between digital and brick-and-mortar environments.
Anne Marie Stephen is VP of Retail Sales and Customer Development at Iinside.