The statistics on ecommerce growth are all too familiar, steadily rising over recent years with online’s share of retail spend registering 12.3 percent in 2017, rising to 14.4 percent in 2018 and closing out 2019 at 16 percent. The momentum is sure to continue in 2020. With ecommerce accounting for more than three-quarters of overall retail growth last year, does that mean brick-and-mortar retail is dying? And if so, should retail decision makers cut back their investment in brick-and-mortar stores?
The answer is no. While the data and facts are consistently telling us the story of an industry in transition to digital, in fact, in-store retail is still growing. Even digitally native brands are planning to open approximately 850 stores in the next five years.
even 10 years ago, shopping at a retail store was the only option to buy most
products. But today, shoppers have multiple options: they can shop in store as
they did in the past, shop exclusively online and never enter a store, or mix
the experiences by shopping online and picking up in-store, or shopping
in-store having products delivered to their homes, for example. Other shoppers
will “showroom,” examine products in-store and then buy online. Others still
will research online and then shop in-store.
so many options available to today’s shopper, brick-and-mortar retailers need
to evolve from a duty to a destination to keep from going extinct. Because the
retail industry is ever-evolving, the truth is that there are more
opportunities than ever for brick-and-mortar retailers to influence conversions
and profits. One principal area of innovation is radar technology. Advances in
radar technology enable retailers to anonymously and cost effectively track the
customer journey to build a data-driven map of customer behaviors and develop
actionable insights. Among the capabilities of today’s advanced radar sensing
Mapping Customer Trajectory
Once the customer enters the store, where do they go? Do they wander aimlessly or forge a clear path? And how long do they stay in any specific aisle? Retailers can use radar sensing technology to analyze the customer path and better understand the customer’s journey in any physical location including retail stores, shopping malls and airport hubs. When analyzing the data, they can determine if the store’s layout is working to their advantage.
For example, do people move around the store as the retailer planned to maximize basket size? Which aisles were most frequented and were in-store displays the most attractive? Path analysis through radar technology can help the retailer understand the differences between normal and outlier customer behaviors. The data garnered from radar technology helps the retailer learn more about how and why people search for a specific product.
is a metric that retailers can use to define demand and support store planning.
Radar can help retailers determine approximately how many customers frequent
particular areas and how much time they spend there, which is especially useful
in testing store layouts and planograms. For example, in advance of a holiday
such as Memorial Day, is the demand higher for meat or other barbeque related
products? Should retailers create end caps that contain everything a shopper
needs to put on a great barbeque? Assuming yes, if the retailer were to display
a related product in a high traffic aisle, will people stop? During peak hours,
what is the impact of assigning an additional cashier to speed the checkout
process? By tracking the occupancy throughout the store, retailers can better
plan to capitalize on high traffic areas and improve the customer experience by
removing friction points.
Identifying and Preventing Friction
of friction points, wouldn’t it be better to understand and remove as many as
bottlenecks and checkouts create obstacles to the shopping process and hinder
the customer’s experience. Preventing friction is currently a
much-discussed topic in retail innovation. Most people that opt for ecommerce
choose to do so because it’s more convenient. If brick-and-mortar stores are to
remain one piece of a complete shopping experience for a brand, or if they plan
to compete with online, they would do well to minimize as many inconveniences
as possible to take the chore out of in-store shopping.
Capturing Customer Engagement and Optimizing
Time-based metrics are ideal for quantifying the in-store shopper journey and engagement. The amount of time a customer stays inside the store is traditionally correlated with the customer making a purchase. Retailers can leverage radar to determine engagement thresholds and optimal engagement times to assist in purchasing and display planning.
For example, data may show that in an apparel store, the engagement threshold for white sneakers was over 15 seconds, but there was a much higher threshold for vintage concert t-shirts. In analyzing this data, it might make sense for the retailer to shift the white sneaker display closer to the dressing rooms or checkout area, where customers are more likely to linger.
Because radar sensing technology captures people in motion, the solutions garnered from the data generate performance metrics and actionable insights for behavior analytics that improve the operations, especially in retail environments. With more and more shopping opportunities available online, brick-and-mortar retailers need to provide a reason for the customer to go to their store in person, a reason for them to stay and a reason for them to make a purchase.
By leveraging intelligent radar sensing technology, retailers can optimize in-store shopping to reduce common friction points and increase conversions and profits, checking all three of those boxes. Additionally, because radar sensors feature superior range, resolution and field-of-view to ultrasonic or other tracking technology, installers may deploy them behind the ceiling or walls to improve aesthetics and deliver more reliable data while addressing privacy concerns.
This Article is contributed By Andrew Boushie, VP Strategy & Partnerships, Ainstein