Merchandising has taken a new turn with the application of new technologies to retail. The classic retail activity of "presenting the product to the buyer in such a manner so as to affect his buying pattern " has found a number of important technological tools. The success of analytics in internet sales has driven brick and mortar retail to develop parallel applications that can improve their sales positions.
Attempts have been made in the past to map the movement of customers in retail stores to create analytics that would determine the best placement of merchandise to make various items more accessible to buyers, to make potential customers curious, and to create needs.
On the low-tech side, loyalty programs track customers' buying patterns. Past purchases are tracked to predict future purchases. Human "trackers" dressed in plain clothes, like the customers themselves have been used to follow and map the paths of customers by eye.
On the more high-tech side, devices that track consumer's cell phones signals use the location systems to map their passage around the store. Facial recognition software uses the data from security cameras to find out more about core costumers' demographics. Stores have installed smartphone apps that guide customers around the store and suggest items customers may want. Motion detectors, installed within store cameras can be used to track customer movement and viewing patterns. More recently, heatmapping of the buying floor has gained increasing popularity as a way of measuring where customers congregate and how they move through the retail space.
The heatmap idea came from the use of infra-red sensitive cameras to locate warm-blooded animals and people (people lost, criminals, or enemy soldiers) in a location where visual surveillance is difficult. The heat sensitive cameras "saw" the warm bodies of their subjects as sudden rises in temperature and marked them on "heatmaps."
Heatmap analytics in retail do not require infra-red sensors. The systems are based on software that accumulates the images from video cameras, and maps the densest concentration of images with color gradients available in real-time. Red areas are areas the most traffic, green and blue areas have lower traffic volume. The color heat map is superimposed on visual images of the store layout to mark the locations of high traffic.
A customer traffic map images the areas of high and low foot traffic. The RetailFlux technique looks at finer scale areas, mapping what people in the store touch the most. The heat maps are created in computer system for analysis and over-time comparison. Similar heatmaps are also used to map the areas of web sites that readers hit the most with mouse clicks.
Retail stores use heatmapping to relocate popular items to present them in high traffic areas. Larger stores use the heatmaps to locate staff for customer service and sales assistance. Check-out stations and other facilities can be relocated to areas of lower traffic concentration or areas that help avoid clear bottlenecks. Signage can be more strategically placed. Measuring touching behavior can improve sales by strategically locating items that are picked up or examined closely. Studies have shown that items picked-up most are most likely to sell.
In a large-scale study of one kind of retail, namely convenience stores , the sales statistics revealed that using heatmap data for merchandising increased weekly store traffic by 14 percent, number of buyers per store grew by 12 percent. The percentage of customers who made a purchase remained high and constant (about 59 percent), but the study concluded that using heatmapping for merchandising pushed more people to walk through the stores, and increased the percentage of customers who made larger purchases (more than $8) from 17 percent to 37 percent.
RetailFlux is a plug&play platform that allows you to obtain valuable insights in a cost-effective way when in-store CCTV systems are utilized to extract shopper activity data. Please contact us to learn more.