The time has come for physical retailers to leverage their information.
Are they an e-retailer or a tech firm? E-commerce sites are collecting vast swathes of data throughout the consumer journey and are utilising this information to form their understanding of the customer.
Armed with even the most basic of web analytics, retailers can be more targeted in their approach, personalise the shopping experience, advertise in the right locations and minimise pain points for smoother transactions.
Increasingly complex big-data metrics, dynamic pricing models and predictive sales forecasts are providing e-retailers with a war chest of tools to gain knowledge about the customer.
Left in the slow lane
Meanwhile, physical retailers have been left in the slow lane. Their slow uptake of advanced analytical solutions has left them flying blind when it comes to understanding their consumers. Some forward-thinking retailers are fighting back and are starting to work with tech companies to use advancements in AI and the blockchain to improve their stores and their users’ experience.
These new technologies are radically changing how customers interact with the store and products. One such technology is overlaying AI capabilities on to security cameras. This not only rapidly exposes theft, but also tracks the individual customer’s journey throughout the store. This then allows retailers to identify in real time which area of the store is most efficient in generating sales, why customer pain points are arising and how these should be rectified.
Advancements in the blockchain are also bringing much-needed visibility to products. Individuals in their local grocery store can now, with the scan of a barcode, understand not only where food has come from, but even identify the individual farmer who grew it. If applied throughout the retail supply chain, this distributed-ledger technology can further leverage the physicality of the store and connect customers to the products by giving a new level of transparency and trust, an asset that is harder to replicate online.
But it’s not only store managers who benefit from this increasing data usage – it stretches all the way to the c-suite. Data is being collected from information on consumer devices that monitor people’s daily journeys.
Client location decisions
CBRE, one such proponent of this information, uses it to improve the client’s location decisions. With this data, retailers are starting to interpret their consumer base and the store’s catchment area more accurately. At a strategic level, this information allows retailers to understand how the store is used, how to facilitate a specific market and whether competing schemes and retailers are better placed to exploit the consumer base. When retailers want to expand, this data becomes invaluable because it allows brands to understand where, when and how a retailer should enter a new market.
Just as web analytics is a must for e-commerce providers, data and location analytics are becoming key for retailers who wish to maximise the potential of the physical store. While the growth of e-commerce continues to target shoppers from the store with an improving online and delivery experience, physical retailers need to think innovatively about how they use and collect data to improve the shopping experience, use the physical store network efficiently and eliminate the customer’s pain points – as e-retailers have already done.
Alex Norwood is senior analyst, EMEA research, at CBRE
