Analytics for retail's future 'playgrounds'

It’s been all the rage for the past few years in business to talk about journeys - customer journeys, change journeys, even personal journeys. As retailing marches on towards an omnichannel future, we  also need to consider the brand journey: how customers experience and interact with companies at every waypoint before, during and after a sale. In this context, physical stores are no longer self-contained profit and loss operations, but part of a larger whole. They become flexible, immersive showrooms where customers visit to touch, feel and test products, get advice and hospitality from ‘brand ambassadors’, and place and collect orders.

As new generations gain buying power, this trend will only grow. Dutch retail consultants Q&A Research asked Digital Natives to define what they thought shopping would be in 2030. Given that this age group doesn’t know a world without the internet, one could be forgiven for expecting them to predict that all shopping would go online. Far from it! Amazingly, 69 percent said that by 2030 they will shop offline; a higher percentage than the surveyed Baby Boomers estimated. Another surprise reveal in the survey was that Digital Natives - in contrast to Baby Boomers - described the physical store as a “playground” to test out brands and products.

Let’s get physical

We’re already seeing a lot of new brand showrooms that go way beyond just selling merchandise. Guitar manufacturer, Gibson’s brand showroom in Beverly Hills partners with local companies to host musical gigs. Closer to home, Dyson’s new Oxford Street showroom includes a salon where well-heeled can have their hair expertly styled with the company’s new £300 hairdryer. Even Amazon has launched stores in the US, to sell - of all things - physical books.

All these point to a trend that people are craving more social, tactile, fun experiences. Counterintuitively enough, technology plays a major role in this movement. In Q&A Research’s Store of the Future project in The Haag, visitors enjoyed playing with virtual reality goggles, wearables and interactive kiosks - all of which gave the sales team more confidence to advise and sell. Not all technologies are accepted equally by the customers. We found that customers resisted doing things in-store that they associated with being online, like entering personal data into tablets or subscribing to certain mobile apps.

The case for in-store analytics  

But brand showrooms can’t just be playgrounds. They need to prove their value in being able to raise the profitability and reputation of the brands they represent. Underneath all the sex and sizzle of consumer technologies like augmented reality and wearables, I’m seeing the most practical value today from in-store analytics. Analytics empowers managers and assistants to help and get closer to their customers at the crucial “physical” stage on the brand journey. For example, we worked with a sports equipment and footwear store to set up a video analytics system that analysed visitors’ interactions with footwear. It had been easy enough to figure out which shoes were high touch / high sales or low touch / low sales. What was really interesting but much harder to know was which shoes people kept picking up but not buying. By analysing video heatmaps of shoes that were being handled the most, and then comparing to those that were actually selling, we could then work out whether price, quality, position in the display or simply availability of the right size was limiting the sales potential. By solving those issues we saw sales increases of more than 30 percent in some cases. So this really works!

Inasmuch as the physical store will always remain to some extent a place to shop, combining analytics and video gives physical retailing all the advantages of e-commerce. Armed with valuable data about visitor numbers, where shoppers go and the products and displays they touch and feel, store managers and staff are able to continually fine-tune pricing, promotions and staffing to improve outcomes. This information helps the omnichannel retailer understand how its stores fit into the overall picture and be able to adjust merchandise, displays, staffing, maintenance and all the other factors so that they perform as well as possible. In this way, in-store analytics plays an important role in making the brand journey satisfying for the customer and profitable for the retailer.