The future of retail is connected. There is no doubt about it. This has been true for online retail for many years, and now, physical stores also take advantage of interconnected technologies in the physical world.
In e-commerce, data drives sales. You can leverage web analytics tools to track anything like average session duration, the number of visits, pages visited per session, bounce rate, and so on. This data provides valuable insights that help improve customer experiences and overall sales strategies.
Offline, retailers struggled when it came to collecting data from physical retail stores. However, this has changed in recent years with the evolution of the Internet of Things (IoT) and related technologies.
For example, with the help of footfall analytics and other related technologies, businesses can now collect data from various sources to measure customer engagement. In addition, this approach helps us better understand the performance of physical retail activities.
What Is Footfall Analytics?
The term "footfall" describes the measurement of people entering and exiting a particular building or location. This could be anything from a live event, conference, healthcare services, and retail.
Decades ago, people did a manual count of footfall traffic. In this case, the common data gathering method was to use a clicker to track people entering a location. However, this method was prone to human error, was time-intensive, and took people away from more essential tasks.
In a retail context, people counting measures the following:
▶︎ Dwell zones
▶︎ High traffic times
▶︎ Queue management
▶︎ Wait times
As the technology evolved, infrared sensors and CCTV cameras helped improve this manual process, but it was from perfect. Fast-forward to the present day, and the term "footfall analytics" represents a highly advanced method of counting people entering a facility.
This approach leverages smart sensors, cameras, artificial intelligence (AI), and analytics software to derive significantly more value from the data.
Shopping malls (that are ready for Industry 4.0) leverage a combination of high-accuracy smart sensors and AI-powered analytics software to collect data and make accurate predictions.
However, more foot traffic doesn't translate into more sales. That's why advanced footfall analytics solutions help measure customer footfall while establishing your conversion rate.
This approach allows you to focus on key areas to improve store performance. Some of the insights include:
▶︎ Customer behavior
▶︎ Customer segmentation
▶︎ Effectiveness of marketing
▶︎ Heat maps
▶︎ Impact on sales volumes
▶︎ Lowest performing hours
▶︎ Percentage of shoppers who purchase
▶︎ Real-time footfall traffic
▶︎ Staff scheduling
▶︎ Underperforming stores
In this scenario, smart sensors and analytics solutions have the potential to blow the doors wide open to a world of new opportunities.
What Are the Key Benefits of Footfall Analytics?
Technology is only as good as how you use it. With the right combination of IoT sensors, analytics software, and more, retailers can reap significant benefits. Some of these advantages include the following:
• Sales Growth
Businesses are about making money. The primary benefit of using this technology is the potential to boost sales. By gathering data on a customer's movements within a store, managers have an opportunity to adapt their store layout to better target customers.
For example, smart sensors can now ascertain a customer's age and gender. This information helps build customer profiles for highly targeted marketing campaigns. Furthermore, you can also place products to encourage impulsive purchases whenever you identify dwell times and zones.
Whether it's developing aggressive marketing strategies, hiring more staff, or making a data-based suggestion at different points within the mall, you are bound to improve your profit margins by using the data correctly.
• A/B Testing and Comparability
Retailers can compare the performance of their campaigns and activities over time across different locations. Retailers that take this approach benefit from insights into internal and external factors that may have a potential impact on their bottom line.
However, businesses require accurate data to analyze and compare their A/B tests with ever-changing customer behavior. To collect accurate data, you need cutting-edge technologies. That's why HiFi Klubben partnered with Vemco Group to optimize operations.
In this scenario, we installed high-quality 3D sensors in all the stores across the continent to collect accurate visitor data. We also integrated the hardware with Vemcount to enable access to several actionable insights.
The managers of each store had seamless access to key metrics on their individual dashboards. We also integrated it with the company's own enterprise resource planning system and business intelligence solutions. In addition, customized monthly reports enabled comparisons of performance across individual stores and across countries.
Whenever you track customer engagement and sales conversion rates, managers can better understand what worked well and what didn't. This provides an opportunity to adapt specific initiatives, refine tactics, or go back to the drawing board.
All this information helps store managers and their head offices find different ways to increase footfall traffic:
▶︎ Better understanding customer trends
▶︎ By better understanding what drives more in-store sales
▶︎ Comparing how you perform against direct competitors
▶︎ Identifying best and worst-performing days (in terms of conversions)
▶︎ Making better use of resources
▶︎ Planning with confidence
▶︎ Understanding which store locations offer the most significant opportunity for growth
▶︎ Understanding the impact of changing store layouts
This data also helps businesses during lease negotiations. It also helps business leaders better allocate resources across retails locations.
☞ This post continues in Part II. Check it out to discover all the Key Benefits of Footfall analytics.