By Chris Precious, firstname.lastname@example.org
Retailers continue evolving to maintain customer bases that have access to an ever-increasing array of purchasing channels—what was first catalog and then TV shopping has now become the online-only shopping experience.
In the early 2000s, many successful chain stores began to fortify their web presences. It seemed the exponential increase in Internet usage and rapidly advancing technology of personal data devices could eventually grind brick-and-mortar sales to a halt.
Yet here we are more than 10 years later, and many traditional retailers are still holding their own. But as with good competition in any industry, online sales have grabbed a slice of the market share. In 2011, online sales accounted for 8% of U.S. retail sales, according to eMarketer.
Some may use online sales’ growing numbers to predict a Mayan calendar-style end to physical retail locations. Ironically, advanced technology may be part of in-store sales’ saving grace.
Whether online or in-store, customer service is critical to survival. According to a recent survey of 247 retail executives by the National Retail Federation (NRF) Foundation and advisory firm KPMG:
- 82% of retail executives said improving customer service would be a priority in 2012; and
- 67% of companies rank customer satisfaction as the top strategic initiative for 2012.
“Retailers have indicated 2012 is all about the customer,” said NRF president and CEO Matthew Shay.
And when it comes to gauging consumer perception, Consumer Reports may be the best there is.
Nearly everyone has to shop for groceries at one point or another, an area where online stores have been challenged to cut into brick-and-mortar dominance. That makes the success and failure of grocery store innovations a valid thermometer for best practice in-store innovation.
Each year, Consumer Reports surveys its readers about their grocery shopping experiences – giving them a voice to bring forth any and all concerns. And each year, complaints about crowds, lines and checkouts always seem to be top of mind for many grocery patrons.
In the 2012 survey results, the No. 1 complaint cited by 27% of the more than 24,000 respondents was “not enough open checkout lanes.” Twenty-five percent pointed out poor selection, long lines or lousy food while 14% said they have had enough of the crowds.
For any retailer, effective checkout management starts the second a customer walks through the door.
People counting is an excellent way to increase conversion, which is frequently cited as the most important of all retail metrics. Conversion is measured in a simple ratio: the number of purchasers versus the total number of people who entered the store.
Thermal sensors consistently prove to be one of the most accurate methods of people counting. Basically, people passing underneath the sensors are detected as infrared radiation – from their body heat.
But shoppers differ in their behavior. Because of that, some retailers may want to be more strategic when counting customers. Most notably, several people may enter a store as one shopping group.
Shoppers physically grouping together does not necessarily mean they entered the store as a single unit. And even in a group, more than one person can make a purchase. For the most accurate analytics, retailers should separately count each shopper entering the store.
Thermal detection systems are capable of assessing shoppers’ behavior, for example, and quickly determining whether a group of people is made up of clearly defined individual shoppers.
When properly executed, thermal people counting technology is extremely accurate and also helps measure conversion ratio; alleviate over/under-staffing; optimize in-store advertisement scheduling; and streamline the customer’s front-end experience.
Lines, lines, everywhere a line
No one likes to wait in line. A long wait at checkout may inspire a customer to abandon their goods and maybe even shift their loyalty to a competitor.
In fact, one-third of respondents to Consumer Reports’ annual supermarket survey said they have abandoned a nearby grocery store in the past year for an assortment of reasons – from a search for lower prices to employee rudeness and everything in between, which includes long lines, no open checkouts and crowds.
In the face of fierce competition, steps must be taken to avoid even the slightest falter in loyalty – and checkout is retail’s final chance to make a lasting impression and inspire customers to come back again.
Shorter lines may also encourage greater spending. The less time a customer spends in line, the more time they have to shop.
Non-intrusive sensors above checkout lanes monitor customer numbers as well as checkout behavior to aide staff deployment. Integrated with data gathered by people counting devices at store entrances, checkout management sensors can immediately gather critical footfall analytics, such as:
- Average checkout line length;
- Average wait times;
- Cashier idle times; and
- Overall transaction service times.
While analyzing these key metrics, the integrated system predicts the optimum number of checkouts needed in 15 and in 30 minutes, which allows front-end management to maintain desired service levels without overstaffing.
Over time, the system learns the most efficient way to staff the front-end by calculating which times on which days more or fewer cashiers will be needed to ensure a smooth checkout.
Ultimately, consumers will determine the outcome of the fight between in-store and online-only retailers. Retail customers have spoken, and they want shorter lines and more open checkouts.
An integrated system of thermal technology to count customers and automatically manage checkout can help determine how to meet those needs efficiently to boost customer loyalty while improving each store’s bottom line.
Chris Precious is president, North America, and sales director, worldwide sensor business, for Irisys, a global leader in thermal imaging, people counting technologies and real time checkout management solutions. Irisys infrared arrays are used by many of the world’s leading retailers, banks, transport hubs and leisure facilities to improve customer service, operational efficiency and profitability. Contact him at email@example.com.