The car without fuel: why data alone can’t drive retail profits
Picture this: you’re considering purchasing a new car. Your vehicle of choice is sleek, smart, beautiful and has the latest technology built in. Although there is one catch, and it’s a biggie:
It has no fuel tank and therefore doesn’t drive.
It’s still a smart car, however the purchase has instantly become much less compelling.
The latest in retail technology – in-store and in-centre movement – works in much the same way. Be it via WiFi, Bluetooth or mobile networks, retailers across the globe are researching, considering or piloting customer tracking solutions in order to gain a greater understanding of their customers’ behaviour whilst in their stores.
How does in-store movement technology work?
In simple terms, most systems track a customer’s smart phone as they move throughout a space, in order to derive metrics such as dwell time, repeat visits, cross-site visitation and in-store hot spots.
The challenge for retailers and shopping centres is to create actions based on that insightful data.
For instance, if you knew that your dwell time increased on a Saturday from an average of 3 minutes to 7 minutes, what action would you implement to drive an increase to sales? If you understood that repeat visits double on weekends vs weekdays, how would you use that data to make a change, and what change would you make?
In isolation the data is interesting, however without combining a number of existing retail measurements, a profitable outcome is nigh on impossible. The case becomes far more fascinating when sales, visitor counts, conversion rates, average transaction values and units per transaction are added into the equation.
How can greater insights drive return on investment?
Naturally, when investing in a new solution, the business case must come from profitability – whether that’s revenue growth or cost reduction – and much of this lies in how you act upon the data it generates.
For example, what if the increasing dwell time on a Saturday also coincided with periods of poor conversion, meaning that people are spending longer in your stores, yet they are less likely to make a purchase? The case for service availability analysis becomes a focal point.
Or, what if combining in-store hot spots with sales data could provide information on conversion by department? This would allow retailers with larger stores or multiple categories to determine which areas contribute to an increase or decrease in conversion rates, allowing them to focus on specific areas of their operation.
Now think back to that new car of yours, and how its use is incredibly limited without the fuel tank. Imagine the car with the ability to drive – and how much more satisfying, and useful, your purchase becomes.
FootFall is an expert at turning multiple business data streams into actionable insights. Find out how Interior Analytics, our in-store and in-centre movement solutions, drive a true profitable outcome.