In-Store Analytics and the Internet of Things
By Tom O'Reilly / August 2016Insights
In-store analytics and data collection are a must for brick-and-mortar retailers and multichannel merchants. Information about store traffic, conversion rates and how shoppers move through a physical store will guide critical decisions for marketing, inventory, staffing and integration with ecommerce sites.
“Retailers who are utilizing in-store data analytics as a basis for making decisions have seen results that moved the sales needle anywhere between 6-22% depending on the scope of analytics,” said Shelley E. Kohan, vice president of retail consulting at RetailNext, a provider of in-store analytics for physical retail stores.
Wearables and Smart Devices Ignite Internet of Things
One area that is complementary to in-store analytics is the Internet of Things (IoT). With wearables becoming technology and fashion must-haves, consumers are embracing IoT. The new technologies are forever changing how shoppers communicate, interact, research and buy goods and services.
IoT data gathered from smartphones, wearables, sensors and other devices will provide tremendous insights and opportunities. When coupled with cognitive computing, the IoT-generated data will support retailers in enhancing customer experience, store efficiencies and sales.
A Forbes article by Bill Chamberlin, a principal analyst for IBM Market Research, details four ways IoT will impact the retail industry.
Customer Experience Elevated. Consumers expect a one-to-one shopping experience with highly personalized service based on their buying and browsing histories.
By combining data from IoT devices worn in-store with customer shopping history, retailers can create a holistic view of each consumer, identify patterns and deliver a more relevant shopping experience.
Retailers can increase brand awareness, responding in real time and in ways that reflect consumer preferences and lifestyles. Based on a shopper’s in-store location, retailers can deliver timely, relevant personalized content and offers, including digital coupons and loyalty rewards.
Store Operations Optimized. IoT sensors and devices will provide information for retailers to improve management of store assets, labor and energy usage, as well as in-store marketing.
For example, energy usage can be reduced using smart building technology, such as IoT-connected thermostats, lighting and refrigeration systems.
Using in-store IoT-enabled smart cameras, beacons and sensors combined with real-time location data from smartphone apps will show shoppers’ traffic patterns and buying behaviors. This store view will alert customer service, store clerks and other staff to immediately respond to shoppers, reduce check out wait times and out of stock items.
Inventory and Supply Chain Managed. Knowing what products are selling and why they are imperative for retailers. Being able to identify who is buying products and the best placement for store displays assist in predicting future sales.
IoT solutions can monitor and track inventory in novel ways. With IoT-enabled systems, retailers can trigger real-time inventory actions based on data from high-resolution cameras and sensors on packages, shelves, pallets and more.
Underperforming, overstocked or low in stock products can be better analyzed using IoT data. In addition, retailers can monitor the impact of time of day, weather and other environmental conditions, online trends and numerous variables.
New Revenue Gained. IoT opens the door to new revenue streams and customer acquisition strategies.
An in-store app can identify long wait times to minimize cart abandonment. The app can send text alerts to staff and save at-risk purchases.
Now “smart” homes connected to retail stores can replenish items quickly and conveniently. Featuring sensors on products, refrigerators and even kitchen pantries, groceries and staple items can be ordered when needed. Even washing machines are getting in on the action and automatically ordering replacement laundry detergent for homeowners.
In-store analytics allow retailers to be attentive to customers, adjust strategies quickly and remain competitive. By embracing and embedding IoT into operations, retailers can improve front- and back-office processes, increase sales, and get next-generation shoppers’ loyalty.