By Peter Paul
I’m a scientist, not a toy expert. But I’m guessing there will be more than a few light sabers stacked under trees this year, given the newest Star Wars movie opening in December.
As the holiday season gears, retailers turn to data analytics to make important decisions about merchandise mix, product placement and other matters. As newer types of data analytics take shape (video analytics, for example), retailers have an opportunity to fuse different kinds of data to gain a more holistic and actionable view of how customers shop. This view is particularly important during the holiday season as shopping volume (and information about shopping habits) skyrockets.
What if it was possible to know not only when your stock of Star Wars Bladebuilders Jedi Master Lightsabers runs out, but also analyze how the crowds coped with the empty shelf? Did shoppers consider alternative products? Did they leave the store immediately or did a nearby display catch their eyes?
As analytics technology advances into the store, here are five things retailers should think about when it comes to the holiday season:
Squeeze the Most Out of Your Analytics Platform
The sheer sales volume associated with holiday shopping heightens both the value of analytics and the cost of deficient analytics. A more holistic view of shoppers on Black Friday lets retailers quickly respond in ways that pay off during the rest of the holiday season.
Retailers crunch their #BlackFriday numbers and get to know their customers better. http://ctt.ec/Xebaf+
“Extended” Black Fridays Set Up the Rest of the Season
Retailers are starting Black Friday sales well before the traditional date, providing very valuable “advance notice” into the season’s trends. By combining point-of-sale data with video analytics on Black Friday, for example, retailers can learn not only what sold but also quantify shopper response to particular offers. Most important, they can understand which products shoppers considered purchasing, but did not. Insight should help retailers better understand shopping trends and make micro-adjustments for the rest of the holiday season. For example, individual store locations can create more personalized promotions based on Black Friday analysis at that particular store. Or, shopper flow analysis can lead to micro-adjustments on endcaps and movable displays that can have a big impact on sales.
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Boost Real-Time Inventory Management
Shelves that are empty of sought-out products never please shoppers, but the problem is super-amplified during the holidays. (Think in terms of shopper satisfaction, length of time that shoppers remain in a store and lost sales). A particularly painful scenario is when the product is physically in the store but tucked away in the back or misplaced due to a crew member error or a shopper moving the product. Robotic mobile analytics platforms recognize products and labels, and pinpoint the aisle, shelf, and facing where the products are located. Analytics robots can travel the store capturing and processing information, recording where and how well the products are placed. The robot ensures merchandizing compliance and pricing label accuracy, and generates dashboards with time-stamped to-do lists for associates. Understanding inventory at the shelf level also helps with Internet orders that are picked up at the store, making it easier for associates to accurately and efficiently prepare for customers.
This video shows how it works:
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Make the Most of Brick and Mortar Micro Trends
No doubt that the brick and mortar shopping trip has become an important social part of the holiday season. Stores have become more than simply places to buy merchandise (online does that. They are now places to experience the holiday season: the colorful decorations, the “in the moment” discussions with mom about whether dad would like this sweater, a place to gossip about family over cups of hot chocolate with holiday tunes playing in the background. The store is a “destination.”
Analytics can help retailers determine how effective their store is at being a destination experience and, more important, which changes should be made to improve the experience. For example, use advanced analytics to compare the size of crowds moving through a store and locations where they congregate with the number of sales and the items sold. This type of analysis finds micro-trends, and the resulting insights could help retailers make changes that improve the destination experience for shoppers and increase sales.
Reduce Holiday Tension
The busy holiday season inevitably causes tension among shoppers, and between shoppers and store associates. Video analytics can provide insight into shopper behavior that enriches training programs for associates. Powerful advances in computer vision and video analytics, coupled with human behavioral models, enable real-time measurement of sentiment, motivation, and, ultimately, satisfaction for shoppers as well as for associates.
Though retailers focus on sales and operations during the busy holiday season, they also should keep in mind the value of data analytics. Embracing the opportunity presented by novel analytics, particularly on Black Friday, can give advanced insight into the rest of the holiday season.
No doubt the Star Wars toys will fly off the shelves this year, but how will retailers know what else piques shopper interest? The answer: Analytics on traditional and emerging data sources.
Principal Scientist Peter Paul is an area manager within the Video and Image Analytics Research Lab at PARC, a Xerox Company. He leads a Retail Innovations Research Program with heavy focus on Video Analytics applications.