Indoor Location Analytics Improve Retail Ops, Inside and Out
Jim Riesenbach, CEO of indoor location analytics solutions provider iInside, recently had a conversation with Chain Store Age about the numerous advantages both retailers and consumers can obtain from precise understanding and analysis of how customers move and shop inside the store.
How can both retailers and consumers benefit from targeted, accurate indoor location metrics?
Retailers have historically relied primarily on revenue data in varying forms to determine performance, gross revenue, same-store sales, average transaction value, revenue-per-square foot and more. While these metrics are critical, they are not nearly enough to satisfy data-hungry retail executives. Indoor location analytics provides a whole new level of insight regarding how many people shop, their behavior in the store, and ultimately how each store and each individual department performs. These tools use traffic and shopper behavior data to substantially improve store performance, and maximize the customer experience by giving consumers a more relevant, targeted experience.
How does indoor location analytics improve the omnichannel experience retailers provide?
Stores are becoming more mobile-connected, and retailers are incorporating accurate indoor location analytics to enable the omnichannel experience. Today’s consumer wants timely, useful, personalized, instantly accessible information. Shoppers use mobile devices to compare prices and products, research features, read reviews and to download coupons, often based on their specific location. With location analytics, retailers use mobile devices to better understand customer behavior and patterns, then provide targeted deals and promotions both in-store and after their visit.
How can indoor location analytics improve a retailer’s processes?
Retailers can now integrate predictive, accurate consumer traffic data into their existing operations, merchandising and marketing reports and process. Properly utilized, location analytics help retailers optimize individual department and store performance, identify otherwise obscured high and low performers in the chain or region, and benchmark performance against industry trends.
What specific analytical capabilities does iInside’s technology provide?
Department-level performance analytics, operations and staffing support, and a real-time location-based connection to mobile loyalty apps are a few powerful applications Interior Location Analytics provides. Our advanced platform delivers highly accurate traffic data, including traffic patterns, dwell times, first visit, departmental conversion, repeat visits, labor requirements, queue waiting times, showrooming behavior, and merchandising and marketing effectiveness.
Examples of common uses of location technology include tracking departmental performance, which gives retailers a data-driven basis to determine the percentage of sales versus visits at the departmental and even brand level, as well as determining how a change in store format or layout affects traffic patterns. This delivers almost instant feedback to gauge the effectiveness of change, and if customers visit more or less frequently as a result.
Retailers can also measure the effect of moving merchandise, including critical success measures, such as time spent in front of merchandise and what shoppers do after visiting specific locations, as well as interact with consumers via a store-based mobile app. In addition, they can measure how they manage queue wait times. Benchmarking this critical customer service metric maintains chainwide accountability to reduce wait times.
Real-time and historical data seamlessly integrates into BI platforms, HR scheduling applications and more. Because traffic analytics are collected anonymously, no personally identifiable information is ever captured or stored. By implementing iInside’s platform, retailers are armed with the actionable intelligence and solutions needed to enhance store performance and improve the customer experience.
Endless Aisle, Short Wait
Providing in-store customers with enhanced online “endless aisle” access to products can boost sales and customer service. But if the wait for endless aisle connectivity takes too long, its effectiveness is impacted.
This is the situation specialty eyewear chains Sunglass Hut and LensCrafters, both owned by parent company Luxottica Group SpA, faced in the second quarter of last year. Tom Schuetz, senior VP and chief technology officer Americas/Asia-Pacific for Luxottica, explained how the retailers used advance caching technology to eliminate long waits for endless aisle content to load on iPad tablets that store associates were sharing with customers.
So Tired of Waiting
“We were using iPads for site access for the endless aisle app,” Schuetz said. “We had a standard 1.5 MG business DSL into the stores and a 2.4 MG home page.”
Pages took up to 90 seconds to load. Luxottica, an Italian company with corporate headquarters in Milan and U.S. headquarters in Mason, Ohio, was familiar with content management solutions provider Stratacache and quickly engaged the company to pilot its Retail Cache solution that locally stores online content and applications.
“Response time dropped to between 1.5 and three seconds, with no improvement on the site itself,” said Schuetz. “We performed a site audit on the home page and further reduced response time by about 60% by being smarter in how we manage content and tagging.”
Catch the Cache
The solution works by deploying a small cache appliance in each Sunglass Hut and LensCrafters store, which is programmed to automatically store frequently used content. Luxottica populates and preconfigures content for each store on a pair of parent proxies at corporate headquarters. The parent proxies are networked to the store appliances (or retail proxies) to allow transmission of additional content that has not been locally stored. Schuetz explained how during the third quarter of 2012, Stratacache engineers enhanced the solution further.
“We noticed caching images to our Adobe Scene7 application was taking too long,” said Schuetz. “Stratacache worked with us to strip out the process so we only performed add/change/deletes nightly rather than full refreshes.”
This reduced a previously four-hour content update process to 30 minutes. Every third day, local caches are updated to balance corporate bandwidth load and improve processing. In addition, Stratacache set up the two major cache drives in the data center to pre-cache content and push it out to store-level retail proxies. Schuetz said this allows smaller files to be transmitted to stores, increasing caching effectiveness.
Building on Success
Since moving to full rollout this year, Sunglass Hut and LensCrafters have extended the product assortment they cache for endless aisle. They also added internal corporate content, such as workforce management applications and internal operational communications and reduced paper in stores, consistent with the Luxottica Green initiative.
Luxottica has rolled out the caching solution to all 2,000 Sunglass Hut stores and will soon complete implementation at all 1,000 LensCrafters stores. Looking ahead, the company will test deployment of the new iOS7 operating system to 7,000 store-level iPads using caching, so employees will not have to download using network bandwidth. Schuetz left off with an impressive statistic from the Sunglass Hut pilot that illustrates why Luxottica is so bullish on the prospects for the Stratacache solution.
“We met the annual goal of our endless aisle program within the first three months of the pilot,” he stated.
Custom Furniture, Custom Experience
The furniture industry is often seen as old-fashioned and perhaps a bit stodgy. But that isn’t stopping Smart Furniture from applying leading-edge technology to provide a highly personalized online means of browsing, selecting, purchasing and even designing furniture.
T.J. Gentle, president and CEO of Smart Furniture, which primarily functions as an Internet retailer but also runs a flagship store in its headquarters town of Chattanooga, Tenn., said the idea of using technology to personalize online furniture shopping goes all the way back to the company’s founding in the late 1990s.
“We wanted people to go online and design and customize their furniture in a way that suited their specific needs,” said Gentle. “We manufactured our own products in the beginning and offered a drag-and-drop user interface that let customers design their own shelving.”
However, as the years passed, Smart Furniture realized the concept of customer design was larger than a single product line. So in late 2008, the retailer partnered with office furniture suppliers Herman Miller, Steelcase and Knoll to provide individual customers and small businesses with the same access to made-to-order furniture that traditionally had been restricted to large businesses.
“We selected manufacturing partners based on the ability of their supply chains to handle mass customization,” Gentle said. “We launched an in-house-developed customer interface called Design on Demand that lets customers make a couple of choices on the design of a product and visualize what they look like.”
As the popularity of Design on Demand grew, Smart Furniture started considering how to make the online furniture shopping experience even more personalized and customized.
“When people buy furniture, they want to know if it will look right in their space,” Gentle said.
To that end, in July of this year Smart Furniture launched the beta of an in-house-developed customer-facing application called Smart Space that uses 3-D tools to help customers visualize exactly how a product will look in the dimensions of their personal space. The retailer used a responsive design strategy to allow Smart Space to automatically optimize its visual display for the customer’s Internet device. According to Gentle, Smart Furniture is working on applying responsive design to the rest of its site. The retailer uses a .NET development environment, having updated from a Classic ASP environment.
In addition, Smart Furniture uses a pricing tool from sister company PriceWaiter that allows customers to name their own price for a selected item, which the company can then evaluate for acceptance or rejection.
In one more move toward customization, Smart Furniture plans to roll out a customized site experience by the end of this year. Existing customers have been placed into one of 66 segments, based on factors such as style and budget preferences, using a Nielsen database. New customers are being segmented through an optional “Style Quiz.” All customers will have the ability to turn site customization on and off and also to adjust their segmentation settings.
“We’re solving a problem that can’t be solved without using technology, in or out of the store,” Gentle said. “The customer can get a color swatch, but can’t really see what it will look like in their own space.”