Traditional retailers worldwide are challenged with going head to head with online shopping. From PCs to smart phones to tablets and everything in between, market share is under competitive duress.
On one hand, many retail financial leaders don’t seem overly worried. Nearly 90%t of U.S. retail CFOs said in a recent survey they are not concerned with showrooming, which is when shoppers check out merchandise in a store but purchase them online — in some instances via smart phone while they’re standing in a store.
In the BDO Retail Compass Survey, approximately 25% of respondents said they would offset showrooming by improving customer service. And that offensive move may be working.
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Customer service in physical locations during back-to-school 2012 proved more helpful, complete and timely, according to a STELLAService study that utilized mystery shoppers who made identical purchases online and in stores.
On the other hand, a key component to delivering superior service is dependent not just on people — but also on in-store operations. Therefore, retailers need a solution that helps uncover areas of operational improvement — such as expediting checkout — and allocates staff resources in capacities that will best serve the customer.
To accomplish this balance, it’s crucial that retailers choose effective data-collection methods that produce meaningful, relevant analytics.
While many systems collect footfall data, a more comprehensive set of door-to-door data analyses could be more valuable. Thermal technology, for example, provides a non-intrusive, infrared observation system that integrates people counting data with checkout information to map the road to optimized operations.
Here are four ways retailers can really put these data to work:
1. Staff scheduling
Over time, people counting data reveals trends that enable retailers to prepare for peak — and slower — shopping times. Staffing according to those patterns can minimize resources wasted by overstaffing and headaches caused by understaffing.
2. Real-time staff adjustments
Nearly every retailer has a reactive system for surprisingly heavy shopping times — from designating back-up cashiers to suddenly sending ill-trained employees to run registers and interface with customers during a crucial time. Sometimes reactive methods work, but often they’re executed too slowly to prevent shoppers’ frustration.
Real-time knowledge of how many shoppers are entering and exiting a store, however, leads to more effective and immediate decision making. Efficiently opening additional checkouts creates shorter lines, faster checkout times and happier customers. The No. 1 complaint of the more than 24,000 respondents to Consumer Reports’ annual supermarket survey was “not enough open checkout lanes.”
Some of the world’s largest grocery chains have picked up on this and made their promise of shorter lines one of their top priorities — from Tesco and Morrison’s in the U.K. to Kroger here in the United States.
3. Conversion
Shoppers who peruse merchandise but leave without purchasing anything might be the “low-hanging fruit” retailers are looking toward to increase sales. Retailers often dedicate substantial resources to bring customers inside stores. But if you don’t know how many people entered the store, how do you know how many left without buying?
People counting analytics compared side-by-side with sales performance will paint a detailed picture of each store’s conversion rate. Fluctuations in this ratio of shoppers versus buyers can be used to measure changes to in-store operations.
4. Promotional timing/placement
In-store marketing is an art. The slightest change in the timing/location of promotional initiatives and materials might make or break a sale. Analytics, however, help ensure these promotions and influential materials are located in high-traffic areas during peak shopping times.
You’ve already put your historical data to use in meticulously scheduling staff assignments, and now it’s time to shift into marketing mode. By looking at the trends of when the store is swamped and when traffic is slow, you have help in prioritizing and maximizing the effectiveness of each particular marketing campaign.
As competition between traditional retail and the digital world continues to heat up, small advantages become significant differentiators. And with the right analytics, brick-and-mortar retailers can streamline store operations to improve customer service and enhance shoppers’ experiences.
Chris Precious, President, North America, and Sales Director, Worldwide Sensor Business
Chris is an experienced sales director with particular expertise in retail. Before joining Irisys, he was formerly Sales Director at NSB Retail Solutions (now part of Epicor), a dedicated supplier of software products and services to the retail market. Chris is responsible for all of Irisys’ sales, support and partnership activities in customer experience management and customer traffic flow verification.
