Store Analytics, Real-Time Responsiveness and Other Use Cases
Retailers use occupancy management solutions for two basic use cases: store analytics / optimization and real-time store management. Both of these help stores to create better experiences for their customers while increasing operational efficiency. The only difference is in whether they are using the data to trigger alerts and automations in real-time, or whether they build weekly or monthly reports to understand how they can make incremental changes to things like planogram and store layout.
Both of these basic use cases help retailers optimize their stores, provide a better, more consistent customer experience, and sell more of the items they want to sell. Here’s how they work.
IoT Hardware Options
When you are considering an occupancy management solution, it is important to start with the ultimate goal of the project. That said, it is difficult to state a goal before you understand what goals can be achieved with occupancy management. So let’s start with the element that defines outcome possibilities: hardware.
IoT hardware, such as 3D cameras and people counters measure the number of people in an area and can be used to understand how people move throughout a space. The data that is collected by this hardware can then be used to generate heat maps, occupancy reports, and store optimization plans. Accuracy has a direct impact on what can be done with the data.
At the most basic level, occupancy management hardware is placed on entrances and exits to merely count the number of people in the store at any given time. STRATACACHE occupancy management hardware offers 99% accuracy, enough to reliably inform both traffic analytics and real-time alerts and triggers.
These occupancy management solutions can be used for a variety of purposes, such as:
- Access Control: Managing who can enter and exit the store
- Store Analytics: Optimizing the layout of the store
- Real-Time Responsiveness: Automating processes based on traffic flow
More advanced solutions will distribute IoT across the store to gain more specific location and flow information about how the space is being used. The most reliable, accurate solutions use Bluetooth technology to track assets that are attached to shopping carts or key assets. As shoppers move through the store, these asset tags deliver location information to help retailers build heat maps, pathing and precise engagement metrics down to within 1 meter of accuracy.
These advanced solutions allow retailers to:
- Optimize planograms and pathing
- Analyze performance of digital signage content
- Track impressions of in-store Ads
- Create interactive digital experiences
- And more
Benefits of Access Control, Store Analytics and Real-Time Responsiveness
With a data-driven view of store occupancy, businesses can benefit their operational efficiency while improving customer experience.
Implementing an occupancy management solution can help businesses improve the bottom line by reducing costs and increasing revenue. This is particularly impactful in an industry where profitability is very low (between 0.5% and 4.5%), and yet payroll costs 20% of revenue. In this type of environment a payroll cost reduction of 10% can significantly improve profitability.
Ways to achieve efficiencies with occupancy management vary from using traffic history to determine more accuracy in human resource requirements, to real-time alerts that can notify staff when the store is filling up. Managers can use this information to divert resources to checkout before a long queue starts to develop, or divert resources away when the rush is ending. Managing staff more effectively helps businesses to reduce wait times and achieve better outcomes with fewer resources.
Data-Driven, Location-Specific Planograms
Planograms have an incredible impact on revenues, but for large store brands, store layout and planograms are often determined infrequently and for a large geographic region. Even in these cases, hypotheses can be wrong when confronted with real customers. Occupancy management solutions provide a way to test hypotheses and correct errors more frequently, which can lead to significant sales lift.
Here is one incredible example where data-driven planograms more than doubled units sold.
In a special report by Retail TouchPoints, STRATACACHE VP of Professional Services, Rob Avery, recounted a recent case with this technology, “A customer came to us when sales were dipping among a certain product for which they were once the No. 2 seller in the region. This business wanted to examine user behavior after rolling out a new planogram and had a hypothesis about customer behavior. We used heat maps along with the door counter… We relied on three stereoscopic cameras that showed the hypothesis was wrong. We developed a new planogram and the company went from approximately 30,000 units a year per store to 70,000, and ended up becoming the No. 1 seller of the product. It’s IoT but it’s relatively simple.”
Improved Customer Experience
Retailers are prioritizing the customer experience like never before. A 2021 Salesforce report called The Customer Experience in Retail: Data Drives Everything discovered that 82% of retailers named ‘improving customer experience’ as their highest business priority for the year ahead (2022). This explains why so many businesses are looking at customer analytics and occupancy solutions this year.
But how can businesses learn to empathize and connect with customers, so that they engender more positive brand experiences and become brand advocates? Occupancy measurement solutions create more structure and hard data around the many small ways that in-store experience can be improved. Planograms and intelligent, optimized stores are both actions that make customers feel like the shopping experience is “designed for me.” These can range from targeted promotions to the execution of health safety guidelines that increase safety.
When occupancy management solutions are used to improve customer experience, the result is typically a lift in revenue. By understanding how customers move throughout the store, retailers can place staff and product in strategic locations to improve conversion rates.
With accurate data that ties traffic and area to a particular time, businesses can become more customer-centric, targeting areas of the store for specific personas, and really honing in on the customer experience. These changes not only increase sales, they also make purchases more convenient for customers, resulting in an overall improvement in satisfaction.
Data-Driven In-Store Measurement and Digital Signage
Digital signage can be an incredibly effective marketing tool, but it’s important to measure the return on investment (ROI) to ensure that you’re getting the most out of your investment.
There are a number of ways to measure the ROI of digital signage, and we’ll discuss a few of them in this section.
Most digital signage projects aim at POS (Point of Sale) data to understand whether digital signage (or any change) is working the way they intend. While effective and helpful, POS data must be compared with multiple locations and chosen very carefully to ensure accurate results.
For instance, if your digital signage prototype store saw an increase of 25% revenues, we need to look at other stores in similar locations during that month, and then compare with historical data to isolate the impact of the technology versus other environmental factors. When we see that other, similar locations experienced an increase of 20% that month, then we have more confidence of a sales lift of 5%, not 25% as you would think just looking at that one store.
Combining POS data with occupancy and traffic analytics allows you to focus on the store level and really dig into the specific impacts that might contribute to overall sales. It helps you translate those results into specific actions, like:
- Change the planogram
- Move the promotion to higher-traffic areas
- Optimize promotions
- Change digital signage content to increase dwell time in specified areas
Occupancy management solutions provide a way for businesses to test hypotheses and correct errors more frequently, which can have a significant impact on your goal achievement.
STRATACACHE Occupancy Management Solutions and Services
Occupancy management allows businesses to understand what is happening in their stores on a deeper level, and this fundamental understanding can drive incredible value in terms of revenues, efficiency and profitability. There are a few steps to achieving that value, from initial diagnosis and framing of the business problem, to hardware and software setup, to analytics and follow-through.
Most businesses have one or more of these functions covered, but hardware is not typically the ONLY missing link. STRATACACHE occupancy management practice not only has the right technology, we have the full-service capability to fill in the gaps and really help your business achieve results.
IoT occupancy management hardware is essential for understanding how people move throughout a space so that businesses can optimize their store layout and send targeted promotions. STRATACACHE occupancy management solutions are available to help your business improve operational efficiency and increase revenue. Contact us today to learn more.