In-Store Analytics Create New Opportunities for Brick-and-Mortar Retailers


Brick-and-mortar stores will naturally survive for a very long time to come, but they are continuously feeling the pressure from their online counterparts. Insights and statistics about customer behavior has been used by online retailers since the 1990’s, but we are finally at a stage where physical stores might be able to even out this advantage.

During last year’s holiday shopping season in the United States, the foot traffic within the walls of physical retailers were approximately half of what it was just three years earlier, according to Forbes. More and more consumers find it appealing to conduct product research and make purchases in the silent comfort in front of their computer screens.

However, Business2Community reports that 61% of U.S. consumers still prefer to shop in-store, as compared to the 31% turning towards the internet. Physical stores still benefit from shopping being pursued as a social activity, knowledgeable personnel and that there is no delivery time connected to a purchase. Despite these advantages, many stores have been severely impacted by the aggressive moves of online retailers.

In order to combat the pressure from online competitors, several suggestions have been put through by media and experts. Turning the store into a fulfillment center, take the in-store experience to a different level and integrate channels relentlessly are some of them. However, the big remedy seemingly is good old analysis – helped by a slight push of new technology.

According to a Nielsen study from last year, consumers pay fewer and fewer trips to physical stores – but the company is also pointing on an upside. When customers actually do visit a store, they are spending more per trip than ever before. This is an interesting notion for the endangered retailers, because this fact gives some foundation suitable for leverage. It is here what is called in-store analytics comes in.

The technology market intelligence company ABI Research predicts that the market for in-store analytics will reach $3 Billion by 2018. Indoor location and smartphone-based analytics have emerged around Wi-Fi, Bluetooth, small cells and 3D motion sensing for instance. The new smartphone-based technologies work in synchronization with existing systems and are enabling a very high level of analytics.

Pathing, dwell times, repeat customers and aisle-level product interaction are just some of the features becoming enabled. The Huffington Post claims that with such tools, the brick-and-mortar space is poised for a comeback. The eagerness for retailers to try out new technology is already beginning to show, albeit with many simpler features to start with.

People counting technology is to be used by 70% of all stores in 2015, according to Datawatch. Also almost 70% will have in-store Wi-Fi and 68% get provided with data from loyalty programs. Furthermore, more than 50% of physical stores are planning on implementing queue management systems.

The new types of technology enhanced analytics allow retailers to better understand shoppers and their behaviors, and provide solid ground for making strategic and tactical decisions. The decisions span from store design layout to merchandising and displays, from customer attraction management to staffing allocation.

Actually, The New Economy reports that the retailer industry are now allowed to differentiate between male and female shoppers, identify and track employees, map preferred customer routes and look at what the customers are browsing online while in-store.

There is little doubt that new technology will be one of the primary means used by the brick-and-mortar stores in order to combat the increasingly large shares lost to online businesses. However, even more important is a coherent experience with a retailer.

Many retailers realize that online presence is paramount to success these days, even if the main business still takes place face to face. There is almost no scenario where they can avoid it. What offers, images and services the stores want to convey must be reflected in both the digital and the physical world.


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