Harnessing Customer Insights: The Impact of Video Analytics on Retail Strategy

A Multi-Purpose Intelligence Tool

While video technology is considered to be a security resource, the addition of AI-driven video analytics transforms it into a multi-purpose intelligence resource for the entire organization. Retailers, for instance, can leverage video analytics across multiple locations to enhance asset protection measures and reduce organized retail crime (ORC). At the same time, they can also use the technology to derive customer insights for their marketing and merchandising departments.

Deepening Customer Insights & Understanding

Video analytics software helps retailers gain customer insights by leveraging video to provide data about product interest and store navigation trends. While the data is useful to individual stores, it can be analyzed across multiple sites to further understand engagement with displays, advertisements, and products across the entire organization.

Video analytics software also provides trend data by aggregating video data over time and visualizing the  insights into customizable dashboard reports. With charts, graphs, and heatmaps demonstrating the aggregated data, retailers have concrete operational and business intelligence regarding footfall traffic, customer demographics, and more which can inform merchandising and marketing strategies. Reliable data for each store within a retail chain, along with easy, shareable reports that compare data points – at the individual, national, and international level – can help marketing and merchandise managers back up important business decisions to executives.

Demographic Intelligence & Target Audiences

Analyzing accurate customer demographic and visitor statistics with video analytic software can help marketing and merchandising managers identify new or refine existing target audiences. For instance, store heatmaps can reveal how customer segments navigate retail locations, showing how long shoppers dwell in an area, or linger near advertisements and product displays. With these actionable customer insights, retailers can make strategic decisions about customer preferences, optimize merchandising, and, as a result, increase conversions.

Demographic intelligence from video analytics, such as the gender and age (men vs. women vs. children) of shoppers who typically enter a store, can help marketing teams drive targeted advertising and merchandising for audiences that already frequent the store.

The Multi-Site Advantage

Furthermore, marketing managers can use the data gathered in stores across a region or country to better understand their typical customer profile and consider how to expand their reach into new target audiences. By understanding who is shopping, where and when they are shopping, and what they are buying, empowers retail managers to make better advertising, promotion, and purchasing decisions to drive traffic and revenue.

For example, many children’s stores have traditionally marketed towards moms of small children. However, aggregated data across sites of could uncover that parents of both genders visit the store equally. If marketing managers relied solely on traditional marketing tactics, they would not have gained the customer insights and analysis provided by video analytics software and would lose out on an important buying profile for their business.

Footfall Traffic & Strategic Marketing

Many retail stores rely on people or foot counting metrics to improve a variety of business outcomes. However, traditional people counting technologies cannot exclude staff or repeat visitors which can greatly skew their data. AI-driven people counting and footfall technology, such as what can be provided by video analytics, can exclude staff from reporting, determine unique customer visits, and filter for bounced visits to a store, specific display, or advertisement.

Video analytics can also uncover how much time customers spend in a queue, identify traffic jams and crowd formations, and pinpoint where bottlenecks typically occur in stores and parking lots. By identifying inefficient store navigation trends, merchandise managers can optimize store layout and product placement to streamline the customer experience and improve customer engagement, which ultimately boosts the bottom line.

The Multi-Site Advantage

Multi-site businesses are often challenged to understand why certain sites are more successful than others. Leadership tasked with determining the success equation and how to replicate it in other stores can use the business intelligence provided by video analytics to make data-driven decisions.

Video analytics enables retailers to aggregate and centralize data — such as footfall and in-store navigation, advertisement and display engagement, return and bounced visitor rates, and customer demographics — across their stores and regions for chain-wide customer insight. This data in turn, helps them optimize and streamline merchandising strategies by applying general understanding to all locations, versus one-off at individual sites.

A Comprehensive Solution for Retail Strategy

Video analytics has evolved from a simple security tool into a powerful, multi-purpose intelligence resource for retailers. By leveraging AI-driven video analytics, businesses can gain deep insights into customer behavior, optimize store layouts, refine target audiences, and make data-driven decisions across multiple locations. This technology not only enhances security measures but also provides valuable business intelligence that can significantly impact marketing strategies, merchandising decisions, and overall operational efficiency. As retailers continue to face challenges in understanding and meeting customer needs, video analytics offers a comprehensive solution that can drive revenue growth and improve the customer experience across entire retail chains.

Interested in video analytics but unsure if it’s a worthwhile investment for your organization? Check out “The ROI of Video Analytics”, an independent report from Omdia, and learn how diverse industries are getting the most out of their video analytics investments. Get the Report

Editor’s note: This post was originally published in January 2022, and has been refreshed and updated for accuracy.