Has the internet changed the nature of the way shopping occurs in stores these days? more
Walk into any bank, retail establishment or hotel these days and the customer experience often leaves a lot to be desired. In a frenetic world where time is the most valuable commodity for most people, customer-facing retail establishments need to re-look from the ground up at the customer experience they provide.
The concept of session metrics is well known in ecommerce. For example Amazon.com does the analysis of the click-stream behavior of its customers so it knows what pages on the site you visited, what products you looked at even if you did not buy, and how long you spent on their site. It then customizes the site for each individual based on the click-stream analysis or session metrics of other. So if all that is possible online why couldn’t this happen offline?
Commerce transacted in physical retail stores is more than 90% of the 4.5 trillion dollar retail industry, yet the in-store shopping pattern of customers is still not known. But it is possible!!
Using RFID technologies it would be possible to identify loyalty card-carrying customers upon entry into a given retail establishment and capture the shopping “stream” or pattern as in-store shopping metrics. This includes the shopping pattern of a customer in a physical store including time of entry/exit, departments visited, time spent, products tried and sales associate interactions. There is a lot of valuable customer intelligence in this data!
For example if a customer visits Macy’s 10 times in a year but only purchases 6 times then the other 4 visits are “lost sales”. Without the help of technology this would go totally unnoticed. Further, capturing the time spent in various departments and how that correlates to the purchases made can be used as a measure of how effective a particular department is in converting an interaction to a purchase. Other session metrics include products a customer is interested in purchasing – based on the capturing product trials information. This can serve as a basis for further cross-sells and up-sells to an individual customer.
AC Nielsen, the world’s leading marketing company, has an initiative called P.R.I.S.M. (Pioneering Research for an In-Store Metric). This initiative is backed by Coca-Cola, ConAgra, General Mills, Kraft, Mattel, Wal-Mart, Safeway and several other well-known retailers. P.R.I.S.M. proves a very simple and powerful hypothesis: Sales are highly related to store traffic. P.R.I.S.M. uses infrared sensors to correlate the impact of in-store marketing to foot traffic. “This is an initiative we think will forever change retail marketing,” said Wal-Mart CMO Stephan Quinn.
With P.R.I.S.M., Nielsen can measure the impact of foot traffic on in-store marketing. However, what is missing is a quantum increase in the value of that information such as the audience make-up of the store traffic. Just like TV ratings are far more valuable when the viewership is measured not just in numbers but also in viewer demographic.
Once these In-store shopping metrics are accumulated they can then be leveraged in 3 areas: engaging with the customer at the store, quantifying the performance of the sales staff, and improving merchandising.
From the perspective of customer engagement, the shopping metrics becomes the basis of an engagement plan delivered through clienteling solutions. It can also be used for in-store marketing through digital signage.
On the employee/sales staff front, customer interactions should also be captured and by the same system so that the fragmented customer intelligence in the minds of the sales associates is available in a centralized corporate repository.
And finally in the area of merchandising, transaction data only tells part of the story. The more important aspect of the story is what the customer interested in purchasing. Only a small portion of what a customer is interested in buying is converted into purchases -- the price, customer service and the customer's ability to purchase must all align for the purchase to be realized. in-store shopping metrics provide a more accurate picture of consumer demand thereby preventing excesses in inventory for which there is poor demand and also decreasing lost sales due to out of stocks.
The bottom line is if retailers expect to change the paradigm of shopping to delight their customers they would need to gather and act on these metrics in order to enable exceptional customer service!
