By Zwicka Ben-Zion, Managing Director Verint Australia
As the competition to attract shoppers and enhance sales and profit margins intensifies, investing in technologies that provide a competitive edge becomes essential. Video business intelligence applications can help retailers make more informed decisions to improve in-store marketing and merchandising, increase operational efficiency, boost sales, raise customer satisfaction levels and improve the overall shopping experience.
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.
Over the years, many retailers have integrated video surveillance with point-of-sale (POS) data to help index transactional information to video. This continues to be an effective tool for loss prevention and theft initiatives. More recently, Verint has seen an increased interest from retailers to use advanced video content analysis such as license plate and face recognition applications to improve their loss prevention and investigation processes.
Alongside security and investigations, retailers are now looking to leverage their surveillance systems to improve operational efficiency. With that, retailers are integrating other security and business systems with their video surveillance platform – from access control to fire and alarm management systems – gaining a unified view of activities occurring around a store as well as across stores. Some retailers also deploy motion detection applications that can identify passive lighting systems and engage when real activity is happening.
Verint has seen an explosive trend in retail over the last couple of years to use surveillance cameras beyond security for marketing analysis, workforce optimisation and overall sales management.
Availability of high-powered computing platforms along with advanced video content analysis now lets retailers use CCTV infrastructure to receive video business intelligence, track and analyse customer traffic, monitor and manage staff deployment and ensure efficient product placement and store layouts. These solutions extract accurate and holistic data about customer behaviour patterns, which is more than traditional POS technologies can provide.
Typical analytic applications that leverage live and recorded video include measuring how long customers ‘dwell’ around a certain retail display, queue lengths at checkout lines, people counting and staffing schedules. Leveraging this information, retailers can make real and predictive decisions regarding business operations. Here are five reasons for using video business intelligence.
1. Enhance the customer experience
Traditionally, retailers gained insight into customer shopping behaviours through loyalty cards and overall trends in POS transactions. Although this provided a wealth of information about the shoppers’ demographics and what they actually purchased, it did not provide insights into the customers’ in-store behaviour. 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, optimise operations, improve the customer experience, and enhance customer value.
2. Help store performance management
For managers to make strategic business decisions, key performance metrics must include detailed information on overall business operations. Business intelligence platforms can help retailers make informed decisions by providing people counts with high accuracy rates.
Combined 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 organisations can also use shopper conversion rates to help compensate and incentivise their sales staff, hence cultivating a customer-centric culture.
3. Optimise your 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 behaviour patterns, retailers can make better operational decisions for sales, marketing, staffing and scheduling. These robust applications analyse traffic flows and shopper movement, measure and predict queue lengths and wait times, monitor zone activity, and provide real-time reporting to ultimately help optimise the 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 queues to ensure customers are in and out in a reasonable amount of time. Leveraging a queue management system helps store managers effectively re-assign staff between various departments and check-out counters in real-time and optimise their daily and weekly staffing requirements. This ultimately leads to a superior customer experience.
4. Improve marketing and merchandising
Retailers can use video business intelligence to gain a better understanding of in-store customer behaviours to measure the success rate of marketing and advertising promotions. These insights can be used to improve product placement and promotional displays and to increase sales and improve the bottom-line.
5. Design optimal store layouts
With a comprehensive data set around shopper traffic, directional analysis, in-store movement patterns, hot spots and dwell times, retailers can improve store layout and overall design. If a certain department is rarely visited, the retailer can modify the store layout in order to help drive shoppers to an area they would not have visited. Retailers can also alter in-store orientation systems to make it easier for shoppers to find the department or the products they are looking for.
Retailers are also using video business intelligence data to pilot new promotions, store designs or additional product categories, By reviewing customer visit counts, 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 lets management, marketing and sales departments to all work together to positively impact the shopper’s experience.
It is clear that today’s retailers operate in a global economy that affords little room for error. Retailers must combat harsh challenges that include consolidation within the industry, price competition, increasingly low profit margins and an increasing threat to in-store sales revenue from competitive online retailers. This means it is imperative for retailers to truly understand in-store shopper behaviour to drive higher conversion rates. By adopting technologies such as video business intelligence to help capture and analyse store activity patterns retailers can increase conversion rates, improve operational efficiency and maximise customer satisfaction and loyalty.