Retail analytics technologies, already a considerable focus of industry interest, are primed for a significant “growth spurt” during the next few years. Looking across 10 major retail sectors, ABI Research has projected that this market will grow to over $3 billion by 2018.
Much of this growth will come from existing technologies, such as people counting and queue management, being augmented with smartphone-based technologies. These will synchronize with existing systems to enable higher levels of analytics, including pathing, dwell times, repeat customers, and aisle-level product interaction. This combination will be essential “for retailers looking to develop shopper marketing strategies, stave off online retail/showrooming, and maximize brick-and-mortar revenue,” noted ABI Senior Analyst Patrick Connolly in a September 2013 report.
What’s behind the interest in people counting? In recent years, much of the attention in retail analytics has been focused on digital channels – in large part because the nature of e-commerce makes available granular, customer-specific data around browsing patterns, promotion responses and conversion triggers.
However, the vast majority of transactions still take place in brick-and-mortar stores, and forward-thinking retailers see the opportunity to garner the same level of insight in the physical world as they can with online and mobile shopping. People counting technologies, when teamed with smartphone-based tools and emerging technologies such as geofencing and strategically placed beacons, can paint ever-clearer pictures of shoppers’ in-store activities and their literal paths to purchase. These technologies have the potential to provide “side-course” benefits to people counting’s “main course.”
It’s essential to keep in mind that these emerging technologies are still in development. While technology is advancing, not all customers have phones compatible with these “side-course” methods. Data provided through the integration of smart devices with people counting systems is still limited.
People counting technologies provide valuable data in regards to determining traffic flow, identifying traffic trends over time, optimizing labor, enabling more effective facility management, and determining conversion rates. Understanding traffic flow allows for cost effective and efficient labor scheduling. For example, lunch time and holidays tend to be peak traffic periods for many businesses. However, all businesses are unique in the audience that they serve, so while some peak times may overlap, others may not. People counters are vital to accurately determining these periods.
Identifying peak traffic times is also essential to understanding the success of promotions and sales. This is possible by comparing how many people have walked through an establishment, within the retailer’s chosen time period, to how many of those people made purchases. In this way, retailers will be able to accurately determine how successful a promotion was, as well as sale conversion rates.
Retailers’ return on investment for people counting technology becomes evident very quickly. People counting technology makes the guesswork that accompanies identifying traffic trends, sales conversion rates and optimizing labor into an efficient and accurate process. The analytics that people counting technologies provide are critical for businesses to successfully compete in our rapidly evolving world. The ongoing discovery of these and other uses for people counting systems will continue to fuel the overall growth of this sector.