Consumer purchasing behavior is shifting from stores to online. While online remains a small percentage of overall retail sales, it is the delivering the growth in revenues for retailers. Online retail sales are currently hovering around 10% of total sales, while brick-and-mortar is at around 90% of sales.
Retailers are experiencing declines in shopper foot traffic into physical stores which is expected to lead to declining sales. Presently, sales are currently maintaining driven by increased average dollar sales, increased units per transaction and mark-downs which is not sustainable.
Here are five ways brick-and-mortar retailers can utilize passive shopper behavior information in-store and across the enterprise.
1) Identify Key Metrics of In-Store Shopper Behavior
Understanding how your shoppers behave in relation to changes in the store is invaluable to understanding the business decisions resonating with shoppers. Passive data measurement of product, layout, merchandising and marketing campaigns can be determined with behavior metrics like: dwell in department, referring departments and capture rates from street to store. These metrics can also be used to measure shopper intent. The first place a shopper stops in store is an indicator of shopper intent. Data points collected from the path taken, dwell and first stop behaviors, can indicate showrooming activity. With increased competition from online, using this data to identify products, categories and departments that experience this activity most frequently, retailers can take actions to convert a browser into a buyer while in-store.
2) Measure More of Your Consumers, Not Just the App Savvy
Enterprise-wide decisions for stores are made (and should be made) based on the behaviors of the majority of your shoppers to have the greatest impact on the overall business. Beacons have captured the interest of retailers through the ability to communicate directly to consumers with relevant messaging while they are in the location. While this is an advance for in-location consumer connection, beacons rely on apps to deliver the messages. At this stage, app adoption is very low, particularly in multi-channel retail reaching roughly only 5% of in-store customers. They may be quality consumers, but only a fraction of shopper base who are also your customers. Measuring with passive data across the store gives retailers a broader view of shopper behavior. Insights captured from what most customers do most of the time allow retailers to make informed decisions that will have the greatest impact to the business. This data also delivers insights across multiple groups within the retail organization affecting the in-store experience.
3) Measure Customer Experience with Shopper Behavior
The difference between what is happening online and in-store is that stores can offer an experience uniquely connected to a physical location. Stores can create environments that capture and engage consumers through all five senses. Product, customer experience, environment all can be measured with passive shopper behavior. Using this data to pull specific levers and move the needle will improve the effectiveness of the in-store experience. Often, retail is seen as an art — and it is. However, the creativity and art of the environment can be measured to understand its influence over the shopper’s behavior and engagement with passive shopper behavior data.
4) Merge In-Store Shopper Behavior with Other Data Sets
Connecting data sets with in-store shopper behaviors uncovers new insights of cross-channel impact. Connecting the shopper path-to-purchase through their journey within the channels is the holy grail of retail information. In-store shopper behavior was the missing link and passive technologies now make this possible. Data is most insightful to businesses when it is given context through other data sets. Merging CRM, online sales, customer satisfaction information, marketing campaigns, basket size and type can all be merged with in-store data for new data sets to understand the how shoppers engage with retailers.
5) Understand the Value of Store Real Estate
The decline of shopper foot traffic into physical stores is happening. Retailers in various categories including grocery, big box, department stores and apparel are all creating new downsized stores, reducing square footage. In some cases, the physical store size may remain the same, but the interior space has been reallocated for a new use. Some have remerchandised with new offerings for customers like restaurants or expanding categories like shoes or men’s. Some have converted retail floor space to become distribution centers to address the same-day delivery challenge presented by ecommerce.
Measuring where within the store to make these changes can be more effectively evaluated leveraging in-store shopper behavior data. The data helps retailers assess the best areas to make such changes with most effective impact on the business. Additionally, it is expected that retailers will reduce the number of store locations in their portfolios in time. Using shopper behavior data to evaluate the performance of store formats and types provides data which can be a valuable tool in effectively assessing which locations are the most productive assets to retain. In-store data helps retailers optimize and replicate successful formats and eliminate underperformers.
Anne Marie Stephen is a passionate evangelist for innovation in retail technology and analytics. She is currently Vice President of Sales and Customer Development at iinside, location based mobile technology, analytics and engagement for offline environments. Her Twitter handle is @AnneMarie_ams.