It’s no news that brick and mortar retail stores are currently taking a considerable hit from their online counterparts. The primary driving factor behind this movement is no secret either. Merely observing the undisputed pioneer of online retail, Amazon, will help you gauge that the secret sauce to their competitive edge lies in detailed and real-time analytics data on customers and their shopping behaviour.
How brick-and-mortar stores can use retail analytics to fight online retailers
For long, online retailers, with their modern web analytics tools, have been able to measure and analyse each store visit to the finest detail. These vary from which pages were visited and for how long, to how people reacted to different layouts and marketing campaigns, to which actions lead to best conversions.
Brick-and-mortar stores can achieve the same using retail analytics tools. It allows you to measure behavioural patterns in great detail and in real time, thus helping you test and select the things that work best for your customers. In fact, when it comes to retail management, the quality of data goes hand-in-hand with the quality of decision-making.
Even today many retail chains still cling on to ‘people counting’ as their primary source of visitor data, while others rely solely on POS data, thus limiting their analysis only to those who actually end up buying something. These traditional techniques, are incapable of providing retailers with the kind of in-store behaviour analytics data that online stores use to fine-tune the shopping experience for each individual shopper, in real-time.
To make things more clear, let’s take an example. Say, a major fashion brick-and-mortar store wanted to evaluate how changes in their fitting room service concept and staffing would affect store performance. While fitting is a decisive point in the purchase path for most fashion items, it’s difficult to analyse its impact from existing data sources such as the POS. This is where retail analytics solution comes into the picture.
By implementing a Wi-Fi analytics solution or beacon analytics solution in-store, the fashion store can gain access to accurate, real-time conversion rates from fitting rooms to the billing counter and other metrics like dwell times at the fitting areas. This will not only help them uplift conversions but also cut down on shopping cart abandonment effectively. Something that would not have been possible via people counter or POS analytics.
Weighing the pros and cons of Wi-Fi analytics & Beacon analytics
Many new analytics solutions, namely iBeacon, Wi-Fi, POS and others have emerged, aiming to help retailers gain deep insights into customer behaviour. Among these, two of the most popular ones are Wi-Fi and iBeacon technology. Let’s first dig a little deeper into the pros and cons of these analytics solutions before we head ahead to compare these retail analytics solutions.
This involves using beacons deployed at your store to gain insights on visitor distribution over various zones within the store, but also help highlight the paths taken by shoppers, dwell time at various zones, repeat visit patterns, and much more.
1) Beacons hold great potential as a source for added granularity in retail analytics data, especially attribution data (i.e. which user saw a particular message, where and when)
2) Beacons currently represent the best ways to deliver and measure the success of tailored proximity-driven messages
1) A dedicated app needs to be installed on the device and Bluetooth needs to be turned on. These factors mean that only a small portion of the visitors can be included in the analytics in the first place.
2) Since beacons don’t transmit anything, the analytics data relies on the user’s data connection as well as data processing in the user’s device. This can be easily solved by using beacons in combination with Wi-Fi in-store.
3) The maintenance of tens or hundreds of battery-powered beacons per store can easily grow into a considerable manual effort. However, you could easily employ a beacon management platform such as the Beaconstac to keep a check on the battery left.
4) One of the critical factors that brands need to keep in mind while purchasing beacons is beacon security. Primarily because it is relatively easy to record and replicate the UUID or the Universally Unique Identifier that each beacon is transmitting. Most proximity leaders, however employ certain measures such as shuffling beacon identifiers, encrypting all communication and removing the need for passwords etc. You could also use beacons in combination with Wi-Fi to address this issue.
This involves using your Wi-Fi access points to gain detailed insights on visitors such as which locations they visit and in which order, and how much they spend time at each location, and so on.
1) If you are looking to get started with retail analytics using some basic metrics such as passerby conversions or benchmarking one branch against another one at a different location, then you could simply leverage your existing wi-fi access points, without having to deploy any additional sensors. This is a huge advantage given the fact that when it comes to beacon analytics you need to invest in beacon infrastructure to get started with similar basic retail analytics metrics.
1) While Wi-Fi analytics solution might be effective for obtaining rough estimates of individuals’ locations, in a retail environment where accuracy to the shelf level is required, it often falls short.
Comparison of various retail analytics solutions
As promised, let’s take a look at how some of the various retail analytics solutions, including Wi-Fi analytics, beacon analytics and POS based analytics fare under the following key pointers:
1) Includes more than 50% of store visitors
iBeacon: Being a comparatively new technology, iBeacon has a comparatively low adoption rate when compared to Wi-Fi. However, things are beginning to change with the latest updates announced by Google on the Eddystone protocol front. According to the Q2 2016 Proxbook report, half of proximity industry supports Eddystone, up from 25% in Q3 2015. Moreover, Eddystone has removed the need for an app to interact with beacons by allowing businesses to push relevant webpages to users (on both iOS and Android) via the Google Chrome app. Given the fact that Google Chrome app has 1 Billion monthly active users on mobile, Eddystone has definitely helped widen the reach of businesses looking to leverage beacons.
Wi-Fi: Being a technology that is already quite popular among users, It’s not unusual to see a Wi-Fi penetration of 70% in urban areas. Hence a Wi-Fi based retail analytics solution will easily cover more than 50% of your visitors.
A great way to ensure that you reach out to a maximum number of customers is to target users of the ‘WiFire’ app. The app connects users to free wifi hotspots around them seamlessly, without the need to enter passwords to fill in lengthy forms.
POS: In comparison with iBeacon, POS based retail analytics solution covers a wider range of store visitors. However, it is important to note that, such solutions will only cover customers who actually bought something, and only those products that were actually bought.
2) Equipped to cover the entire retail store
iBeacon: Based on the granularity of the data or analytics that your are looking for, beacons can be used to either cover some portions of the store or the store as a whole. For example, say you are looking to measure how many hours a particular customer spent at the women’s section in your store. In this case, all you have to do is deploy beacons across the women’s section. However, the number of beacons needed will vary based on the area that the section is spread across. On a general note, if you plan to test for say 3 use cases at 3 different locations (each of say 500 sq ft), you will need a minimum of 10 beacons in total. For bigger stores or venues (of say 2500 sq ft) you will need around 12 to 15 beacons per store or venue.
Wi-Fi: One of the primary advantages offered by Wi-Fi is that it allows you to use your existing Wi-Fi access points to gain access to some basic retail analytics metrics such as passerby conversion or benchmarking one branch against another one at a different location. On the other hand if you are looking to gain access to some insightful data such as heat map analysis and store layout changes you might want to use dedicated sensors in trilateration mode.
POS: While a POS based retail analytics solution is equipped to cover the entire retail store, it is important to note that, such solutions will only cover customers who actually bought something, and only those products that were actually bought.
3) Analyzes entire visits and provides data on repeat visits
iBeacon: One important thing to note here is that, iBeacon holds great potential as a source for added granularity in retail analytics data including store visits and repeat visits. However, one huge limitation here is that this technology requires an app to be running on the user’s device throughout the visit.
Wi-Fi: Being a technology that is equipped to cover an entire retail store, a Wi-Fi analytics solution can provide you access to insightful data on store visits and even repeat visits. However, it cannot be used to gain access to highly granular data.
POS: While POS based analytics solutions are not equipped to provide you with data in store visits, they can still provide you with data on repeat visits. The limiting factor here is that it counts repeat visits only for those visits that have a loyalty ID associated with the purchases made.
4) Provides data on sales transactions
iBeacon: Once your POS system is integrated with beacons, the payment process becomes all the more enhanced. However, unlike NFC, where you need to literally make contact with the terminal to transmit data, beacons have the capability to communicate with the installed app even if the user in-store is nowhere close to the payment counter.
Wi-Fi: For all the advantages they hold, Wi-Fi analytics solution is not equipped to provide data on sales transactions.
POS: As is evident from the name, a POS based retail analytics solution will provide you full access to data on sales transactions in-store.
5) Doesn’t require an app
iBeacon: In order for an iBeacon analytics solution to function, users need to have a dedicated app installed on their device and Bluetooth needs to be turned on. These factors limit the number of visitors who could be included in the retail analytics in the first place. However, as mentioned earlier, things are finally changing with the latest updates on the Eddystone protocol front.
Wi-Fi: A Wi-Fi based analytics solution on the other hand, does not require users to have an app installed on their device.
POS: A POS based retail analytics solution doesn’t require users to have an app installed on their device.
To help you get a better idea, here is a table that evaluates every available analytics technology and retail analytics metrics. It will help you choose the one analytics solution that suits your brick-and-mortar store the most.
Which retail analytics solution do you plan to employ in-store? Let us know in the comments below.
If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help!