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How Location Analytics Can Transform The Customer Experience at Retail Stores in 2017

February 15, 2017

It is an undeniable fact that location-based technologies are gearing up to change the retail industry as we know it. According to a new report by Cardinal Path, a digital data and analytics vendor, nearly all retailers in the Internet Retailer 2016 Top 1000 use analytics services (with Google Analytics and Adobe Analytics being the two most popular).

location-analytics-transform-retail

Target, which always seems to be ahead of the curve, began testing beacons in 50 of its 1,792 stores in 2015. In that same year, adoption grew 86%, and 25 million customers were using their mobile application weekly. This gave them an opportunity to incorporate beacons in more locations and further enhance the experience of their target markets.

While it is certainly positive in a struggling retail industry that many corporations are benefiting from the adoption of this relatively new technology, how is this shift helping the customer? Is it helping the customer at all? The answer is this: it’s making it easier for companies to better tend to the needs of their shoppers through more personalized user experiences which include various promotions and efficient interactions. Thus, ushering in ‘The age of the customer’!

A study by SessionM reported that 90% of shoppers use smartphones in stores while browsing to compare prices, look up product information, and read product reviews (among other things). As companies become more user-centric as opposed to fashion-centric or sales-centric, it’s no wonder that the customer experience is being most widely altered using analysis of data extracted from mobile applications and technologies like WiFi, Bluetooth, and GPS.

When are Analytics Applied to Aid Customer Experience?

A single customer visit can result in over 10,000 unique data points which are then used to refine multiple aspects of a given business. Location-based technologies provide retailers with data, such as shopper volumes, the percentage of passersby who enter, as well as browsing patterns and stay duration with a level of granularity that has never been achieved before. So, what do retailers most often use these measurements for?

  • Re-designing the Store Layout

Data around customer paths paired with time spent in various store routes is valuable to have. Add that with things like what items are purchased at checkout, and retailers can tell if individual displays are missed by a bulk of their clients. For example, if a store had placed a display right in the center of a busy walkway with a new product they were hoping to sell out of, but there have barely been any sales, they may look to see what else in that area is distracting people from paying attention to the spotlighted product. Perhaps there is a great shoe sale that is more attention-grabbing.

And from the customer’s end, reworking the design of stores will result in a more fluid experience based around where the best promotions lie.

  • Driving Operational Efficiency

While applying analytics to the core of operations, companies will look to see how much time customers waited in lines and whether long lines deterred them from checking out, as well as whether their experience with point of sale systems was positive or not. These observations will help retailers (at least those who are open to change) alter their operative competencies to best serve their visitors.

By applying these collected data points to the core of a retailer’s’ operations, they hope that their customers will have a more seamless experience – from the time they walk into a store until the time they exit, and ideally with proud purchases in tow.

What Techniques are Used to Collect Location Data?

Companies that offer WiFi connectivity, an enabled application, and use beacons in their stores generally collect data starting upon entry (where the number of people entering is considered). From there, browsing stages generate data like the number of try-ons, staff interactions, and more. Then, information like how long a user spent in the store and whether they purchased anything is gathered at the time of exit.

  1. WiFi – WiFi connectivity is imperative for a customer to have a positive interaction with a retailer’s’ mobile application. In fact, without WiFi, there is no real purpose in attempting to gather location data. WiFi is responsible for tracking the shopper’s journey through the store, which as previously mentioned, allows retailers to more efficiently set up and operate.
  2. Bluetooth – Beacons, which are responsible for the Bluetooth connectivity within thousands of stores, allow users to be given notifications of active promotions within their shopping area. As a matter of fact, the Bluetooth Low Energy Device market was set to more than double in 2016 and is on track to break 400 million shipments in 2021. So, if there is any question that location technology is the future of brick and mortar retail, let that statistic stand for the opposition.

Location-based technologies will eventually set apart those companies who are placing importance on digital strategies from those who will be noticeably lagging. Some of the popular retail corporations like Walmart, Barneys New York, and Waitrose have already started to take advantage of the opportunities presented to them through the integration of these technologies with their established business models.

In turn, customers with enabled mobile applications and notifications turned on will benefit from the abundance of more personalized promotional deals geared toward their specific buying journey. For example, if you’re in Target on the hunt for a dress and matching shoes, you may receive a coupon for a certain dress designer as you near that rack, and then as you make your way over to the shoe section you’ll receive an additional percentage off if you buy a shoe in conjunction with a given clothing item — WHAT?! I know, what could be better?

As the ‘Age of the Customer’ continues, shoppers will come to expect an experience unlike any other each time they enter their favorite store, which will certainly present a challenge to retailers. We foresee a time when giants like Macy’s, Nordstrom and Target will need to dedicate an entire position or effort into simply altering the way customers will interact with their in-store technologies. Additionally, we will likely see an increase in the number of firms whose sole competency is optimizing these technologies for retailers. Either way, we are excited about the future of shopping!

July Rapid is helping retailers redesign their in-store experiences with the help of Proximity MX – our exciting proprietary customer engagement platform. 

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