design:retail - November/December 2015 - (Page 42)
shopping with paco
CEO & FOUNDER
HE TOOLBOX THAT the modern
merchant has at its disposal is exploding. Visit any retail tradeshow
and the number of technology
vendors pushing products is
impressive. Here are some observations and updates.
For more than 20 years, stores and shopping malls
have been wired with counting devices at doorways.
The three major firms offering the service are Retail
Next, ShopperTrak and Nomi. The measures they
offer are simple and largely effective. How many
people walked in the door today versus yesterday, or
versus last week or last month? The devices themselves have gotten better at sorting out-with some
accuracy-men, women and children. They are less
accurate with profiling group size.
These measurements are used in a number of
ways, mostly operational. It is a good way of judging staffing needs, and when comparing your door
counts to the door counts of the mall, you have a
sense of how you are doing compared to the rest
of the mall.
Hook the door counters with register transaction
data and you get at a rough idea of conversion data.
The fly in the process is how you process groups. Is
a family of four who makes a purchase a 25 percent
conversion or a 100 percent conversion? Context
also is important. In general, lower-income consumers maintain more group cohesion, whereas
higher-end shoppers are more likely to split and regroup. In higher-end malls, a next-door neighbor
that is more gender-focused can reduce conversion ratios. For example, if you have a lingerie store
immediately adjacent, your location may be the
parking lot for guys uncomfortable shopping for
bras with their spouses. Conversion influencers include public areas, bus stops, food courts, branch
banks and other service-based retail.
Much of the problem with door counters is that
the vendor selling it to you tends to be passive. It is
NOVEMBER/DECEMBER 2015 DESIGNRETAILONLINE.COM
a technology offering with no real interpretive service included. Also aggravating the problem is that
companies offering the service really are in the device business, not the information business. Their
objective is to sell you counters. As for the data
collected, companies and retailers need to find an
independent partner to interpret the data, identify
what matters around the consumer experience,
and provide actionable short- and long-term next
steps to improve the bottom line.
In retail research, there are two fundamental
ways of processing information. The first-and by
far the oldest way-is to aggregate. Thus, you have
no interest in the specific individual; your focus
is in identifying broader patterns. Men do this,
families do that, this is what tends to happen on
Monday morning in contrast to what happens
on Friday night. The output is about averages and
trends. It gives you "heat maps," first destinations,
section conversions and more.
The second way is processing information about
an individual. Over the past 15 years, this offering
has been driven by a variety of technologies. One of
the early offerings was based on pixel recognition
software. The merchant installed a series of cameras capable of tracking movements, and by tying
into POS data, could even identify individuals. It
was expensive and a little creepy. Yet those surveillance systems are in place at almost every gas
pump, airport, office building and urban street.
Adding to the information mix is a new generation of beacons-they are devices that typically track
your mobile phone. Some are based in Bluetooth
signals, some key in on your phone's setting search
for Wi-Fi. What makes the technologists salivate is
that they can identify the unique ID and, thus, the
person. It presents the possibility of personalization. The beacon can be calibrated to about 3 ft., so
accuracy where you are can be correlated to specific
product categories and to individual displays.
The beacons give a merchant the ability to interact directly with consumers in-store, making them
offers based on proximity via notifications. Privacy
issues have been dealt with by asking consumers
for permission to interact with them. To date, the
acceptance rate for that offer tends to vary greatly;
not surprisingly, with Millennials leading the way.
The new frontier is using those same beacons to
start informing store design decisions. Again, the
challenge is that companies offering the service
understand that there are many different ways to
use the information they collect, but doing it involves getting past a software business model to the
hands-on consulting business.
We can track what you look at online and tailor
an offering to you based on your browsing history. I
recently bought a wedding band online, and everywhere I went online for the next two weeks, I was
offered more wedding bands. How many bands is a
guy likely to buy? It felt weird. It was so obvious.
PACO UNDERHILL IS THE FOUNDER OF ENVIROSELL AND AUTHOR OF
THE BOOKS "WHY WE BUY" AND "WHAT WOMEN WANT." HE SHARES
HIS RETAIL AND CONSUMER INSIGHTS WITH DESIGN:RETAIL IN THIS
Table of Contents for the Digital Edition of design:retail - November/December 2015
design:retail - November/December 2015
We Love This!
Clicks & Mortar
How’d They Do That?
Have You Heard?
Shopping with Paco
New York Retail
Product Category Index
Product Category Listing
design:retail - November/December 2015