Recent weeks have seen a flood of news coverage and commentary on the important new retail business trend referred to as in-store analytics. How it works is that brick-and-mortar retailers install technology platforms in their stores that enable them to understand what shoppers are doing while inside the retailers’ walls, including where their friction points are and how to improve the stores to better facilitate shopping.
The retail and technology industries have taken notice of and embraced this new technology without a lot of fanfare, so many readers are just learning about these capabilities despite their growing popularity. We’re very pleased to see the recent press interest in brick-and-mortar analytics, which will help the public understand a business trend that benefits society in many important ways:
- In-store analytics bolsters the economy. Retail is the single largest segment in driving the US economy. According to the National Retail Federation, retail is the nation’s largest employer, offering more jobs than the next two highest categories combined, and is directly responsible for 24.1% of jobs and 17.6% of the GDP. By unveiling the operational improvements that can make retailers more effective, in-store analytics contributes to the growth of this all-important segment, which in turn trickles down to all other segments of the economy.
- In-store analytics creates jobs. As retailers learn how to make their stores work harder, more often than not they find themselves increasing employee count to manage the growing business. New store locations, more effective employees, and optimized marketing and merchandising programs all lead to increased customer service needs, and that means jobs. Merchants commonly employ the platform for staffing optimization, and while many of them have used collected metrics to justify staffing increases, not a single one has reduced its workforce due to changes driven from analytics.
- In-store analytics increases retailer profit. Once they have access to the facts they can use to improve performance, merchants routinely increase same-store sales 10% or more and decrease theft to similar degrees. The rapid adoption of these practices in all major retail segments is testimony to the bottom-line benefits they bring.
- In-store analytics enables a better customer experience. The fundamental promise of in-store analytics is that it reveals friction points within the purchasing process. Perhaps shoppers cannot get the service they need, or cannot find the products they want, or get confused by misleading marketing campaigns. Measuring aggregated shopper behavior is the first step in solving all these problems, and that directly translates to a better customer experience. And by improving operational efficiency, in-store analytics helps merchants keep prices low, which shoppers appreciate everywhere.
- In-store analytics deepens consumer privacy. By constructing measurement capabilities atop a robust computing platform, we have the ability to build in privacy protections that far outweigh those available with the old ways of doing things. Best security practices like access credentials, usage logs, and automatic data deletion all serve to protect the consumer. More importantly, however, the aggregated, statistical nature of the analysis means that no individual information is ever collected. In fact, although the RetailNext platform has measured and made sense of more than a billion shopping trips to date, never once has the platform added a single name or piece of personally identifiable information to any database anywhere in the world.
In short, the in-store analytics category is a fundamental enabler of success for retailers everywhere, and that makes it a driver for societal improvement that ultimately affects all of us for the better.