Understanding Video Business Intelligence in Retail Environments

During the last 10-15 years, the retail industry has experienced a transformation from traditional brick and mortar store to newer technology platforms such as e-commerce, powerful search engines and social media.  As a result, brick and mortar retailers have had to re-visit their strategic priorities to focus on higher levels of customer experience, channel convergence plans and new marketing and merchandizing approaches. Alongside, price pressure and lower margins continue to require retailers to drive higher efficiencies in store operations through improved workforce management, product placement and store layouts.

Traditionally, retailers have used CCTV and video surveillance primarily for physical security– using analog and IP cameras, encoders and decoders, video management software and networked video recorders. Availability of high-powered computing platforms along with advanced video content analysis algorithms now allow retailers to use their CCTV infrastructure to derive video business intelligence, track and analyze customer traffic in store, monitor and manage staff deployment, and ensure efficient product placement and store layouts. These solutions extract accurate and holistic data about customer behavior patterns; more than what traditional POS and people-counting technologies can provide. Specific insights from video business intelligence help retailers make more informed decisions to improve in-store marketing, increase operational efficiency, boost sales, raise customer satisfaction levels and improve the overall shopping experience.

As the competition to attract shoppers, and enhance sales and profit margins intensifies, investing in technologies that provide retailers a competitive edge becomes essential.  This article will outline how video business intelligence applications can help to impact a retailer’s overall bottom-line.

What Can Business Intelligence Do For Retail Environments?

Enhanced Customer Experience
Traditionally, retailers gained insight on customer shopping behaviors through loyalty cards and overall trends in POS transactions. Although this information did provide a wealth of information about the shopper’s demographics and what they actually purchased, it did not provide insights into the customer’s in-store behavior. Understanding where customers spend most of their time in the store, what time of day they shop, how long they wait in lines and where they dwell (aisles within the store, promotion displays, service counters, etc) can increase a retailer’s success.  Leveraging a video business intelligence solution helps retailers dramatically reduce their reliance on soft data, replacing it with real-world information to help increase sales, optimize operations, improve the customer experience, and enhance customer value.

Store Performance Management
In order for managers to make strategic business decisions, key performance metrics must include detailed information on overall business operations. Leveraging a business intelligence platform can help retailers make informed decisions by providing people counts with high accuracy rates. In combination with POS data, in-store department managers, store managers, regional managers, and corporate management can use reliable metrics to benchmark store performance and identify trends. Retail organizations can also use shopper conversion rates to help compensate and incentivize their sales staff, hence cultivating a customer-centric culture.

Optimize Workforce
Without sufficient staff, retailers face dissatisfied customers and lost sales. At the same time, overstaffing increases operational costs. By capturing the full range of shopper traffic monitoring and customer behavior patterns, retailers can make better operational decisions for sales, marketing, staffing and scheduling. These robust applications can include analytics that analyze traffic flows and shopper movement, measure and predict queue lengths and wait times, monitor zone activity, and provide real-time reporting to ultimately help optimize workforce.

One of the major factors in a loss of a sale occurs when a shopper’s time is not valued.  It is key to monitor and react to longer line queues to ensure customers are in and out in a reasonable amount of time. Leveraging a queue management module helps store managers effectively re-assign staff between various departments and check-out counters in real-time, and optimize their daily and weekly staffing requirements. By scheduling staff accordingly to actual customer volumes, retail organizations can ensure a superior customer experience while operating efficiently to produce higher margins.

Improving Marketing and Merchandising Effectiveness
Retailers can use video business intelligence to gain a better understanding of in-store customer behaviors in order to measure the success rate of marketing and advertising promotions. You can use these insights to improve store layout, product placement and promotional displays with actual customer behavior in order to increase sales and improve the bottom-line.

Designing Optimal Store Layouts
With a comprehensive data set around shopper traffic, directional analysis, in-store movement patterns, hot spots and dwell times, retailers are able to utilize that information to improve store layout and overall design. If a certain department is rarely visited, the retailers can modify the store layout in order to help drive shoppers to the area where they would not have otherwise visited. Retailers can also alter in-store orientation systems in order to make it easier for shoppers to find the department or the products they are looking for.

For piloting new promotions, store designs or additional product categories, retailers are utilizing video business intelligence data. By reviewing people count, in-store traffic patterns and dwell times around specific areas and products, retailers can take this knowledge and modify their promotion, design or product placement accordingly. This allows management, marketing and sales departments to all work together to positively impact the shopper’s experience.

Today’s retailers operate in global economy that affords little room for error.  Retailers must combat harsh challenges that include consolidation within the industry, price competition, and increasingly low profit margins.  As such, it is mission-critical for forward-thinking retail organizations to adopt technologies that help capture and analyze store activity patterns to increase conversion rates, improve operational efficiency and maximize customer satisfaction and loyalty. 

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