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In-Store Analytics: What’s Top of Mind for Today’s Retailers?

Guest blog by Steve Jeffery

Despite the gains that ecommerce has made in recent years, the brick-and-mortar store still rules as the retail industry’s largest sales channel by a large margin: up to 85 percent of transactions take place in stores. Yet frustratingly, retailers have a pretty big blind spot when it comes to understanding and analyzing what happens in the store. Clickstream analytics are a given in e-commerce, but capturing accurate data in the real world is more complex and demands different approaches and solutions.

Today’s multichannel retailers must address the “insight gap” that exists between their online and brick-and-mortar channels. In-store analytics are needed to do this, but how mature is this emerging technology market? What are the top drivers, and top concerns, for retailers evaluating technologies and planning deployments? These are some of the questions that Brickstream set out to answer in a recent survey of 124 executives from global retail corporations. The study, Retail Analytics: What’s In-Store? has uncovered a number of interesting findings, including the following:

  • People counting is step one. While retailers are interested in collecting a broad range of data in stores, they placed a premium on customer traffic data (otherwise known as people counting), citing metrics on how many customers enter a store and how many of those buy (sales conversions) as their #1 and #2 most important measurements. They also value knowing which promotions attract customers, where customers go in the store and which products they choose. 71 percent of the retailers surveyed said that they use or plan to use people counting technology in their stores, with in-store Wi-Fi and loyalty systems coming in at 68 percent, and mobile payment/wireless POS and queue management technologies of interest to at least 52 percent of respondents.
  • Cross-functional value cited. Survey respondents consistently identified marketing, operations, merchandising and loss prevention as areas that will benefit from increased visibility into what’s happening in the store. Marketing was seen as the department most likely to instigate and lead in-store analytics initiatives, however, with other departments expected to follow suit as the value of technologies deployed are proven.
  • The future will be multi-channel. As more and more consumers shop and interact with retail brands across store, e-commerce and mobile and social channels, retailers are increasingly interested in getting a multi-channel perspective of customer behavior and sales. Survey respondents reported a timeline of within a year to four years for becoming fully multi-channel, with supermarkets and department stores ranking as early adopters and more invested in multi-channel activities than other retailers. Stores and e-commerce are viewed as the most dominant sales channels, with more than 80 percent of respondents naming these important, with mobile and social channels also ranked highly, at 73 percent and 66 percent, respectively. Thus, accurate data is needed for all channels, not just digital ones.
  • Proceeding, with caution. Survey respondents confirmed there is value in investing in in-store analytics, and singled out greater insight into retail performance, as well as knowledge that enables improvements in staffing and the overall customer experience as key motivations for adoption. Over 80 percent of retailers surveyed reported that they have deployed or plan to deploy in-store analytics by the end of 2015. At the same time, respondents also expressed concerns about whether returns would justify the price and about potential disruptions involved in deployment and training employees on new systems. These reservations suggest a cautious user base looking for guidance on the most streamlined and cost-effective ways to move forward.

Retail executives in operations, marketing, merchandising and loss prevention from the U.S., South America, Europe and Asia were interviewed for the Brickstream in-store analytics survey, with eight major categories represented, including supermarkets, department stores, specialty electronics, warehouse, drug stores/pharmacies, cell phone stores and big box retailers. More than half the respondents (54 percent) were from large retailers with revenues of $1B and more; the balance came from midmarket retailers ($100 million to $1 billion in revenues).

As in-store analytics technologies mature and shoppers go fully multi-channel, the time is ripe for retailers to start to think about best practices and approaches so that they are no longer flying blind when it comes to their biggest channel—the store.

Steve Jeffery is CEO of Brickstream

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