Improving the Retail Customer Experience with In-Store Analytics

Overcoming the Customer Experience Decline

According to Forrester, a leading global research and advisory firm, customer experience quality is at an all-time low — after years of decline — meaning that retailers are under intense pressure to improve customer experiences and drive sales. In years past, the best way to gather customer data for strategic improvements was to deploy stand-alone technologies — such as footfall traffic counters, point of sale systems, and Bluetooth-based beacons. However, despite technology investments, consumer sentiment has continued to decline. Rick Parrish, a VP and research director at Forrester, states, “US consumers are having, on average, the worst experiences in a decade. Brands want to create better experiences, and they realize that putting the customer at the center of their business is the way to do it. However, organizations struggle with the scale of change that this requires.” To overcome these challenges, retailers are looking for better in-store analytics that can uncover in-store shopping patterns, measure customer engagement with staff or products, and support strategic optimization; video analytics is stepping up to the plate to deliver.

Video Analytics for Superior Insight

Video analytics technology processes surveillance – either on demand or in retail-time – and uses AI-driven capabilities to extract, classify and recognize objects in video. Video surveillance is transformed into valuable insights by making video searchable, actionable, and quantifiable for a variety of applications and retail functions, including security, merchandising, marketing, and operations.

For instance, retail management can set real-time, rule-based alerts that trigger based on predefined objects and behaviors detected in video.  Upon receiving an alert, appropriate stakeholders can be notified for immediate action. This real-time capability empowers managers to have enhanced situational awareness in stores, warehouses, administrative offices, loading docks, distribution centers, and store parking lots. Key use cases include:

• Security Alerts: Notify managers when unexpected activity, such as lights turning on after hours, occurs.
• Customer Service Optimization: Flag crowding or long queues to prompt staff interventions.
• Safety Compliance: Track occupancy levels to ensure compliance with safety regulations.

These real-time insights allow stakeholders across departments to stay informed and act promptly, enhancing both operational efficiency and customer satisfaction.

Breaking Down Data Silos

While the real-time applications of video analytics are extensive, retailers can also leverage the technology to improve efforts to anticipate customer needs by understanding in-store analytics over time. Video intelligence software aggregates video data over time and visualizes insights into customizable dashboard reports. With charts, graphs, and heatmaps demonstrating the aggregated data, retail management can easily evaluate footfall traffic and demographic trends, enable comparisons across individual stores or entire chains, and facilitate cross-departmental collaboration by sharing insights with marketing, operations, and executive teams. This centralized approach ensures that data-driven decisions are accessible and actionable across the entire organization.

How to Improve Navigational, Traffic Volume, and Demographic Data with Video Analytics

Let’s dig into a few practical ways video analytics can be implemented to provide the in-store analytics you need to make a big impact on your retail strategy:

Enhancing Store Layout and Merchandising

Heatmaps are valuable in-store analytics that reveal customer navigation patterns and highlight popular and underutilized areas. This data empowers retail managers to:

• • Optimize store layouts to enhance traffic flow.
  • Position products strategically for maximum visibility.
  • Identify and address bottlenecks in high-traffic areas.

Demographic Insights for Targeted Marketing

By analyzing customer demographics—such as age and gender—retailers can tailor marketing strategies to their audience. For instance, marketing managers can develop unique campaigns that appeal to their frequent shopper demographic. Merchandising teams can also adjust product placements to attract target demographics.

Operational Efficiency and Queue Management

Customer service managers can generate video analytics reports to analyze long-term data regarding que wait times and traffic hotspots. These in-store analytics, along with accurate people and crowd counting reports, support efficient queue management and crowd control throughout a store. This data can also be correlated with POS and sales data to identify in-store shopping cart abandonment.

Tracking Visitor Metrics

Another key performance indicator that can be measured with video analytics is in-store traffic, unique traffic, as well as return and bounced visits – that excludes recognized employees from the reports. Anonymous tracking ensures privacy while delivering precise data to help retailers anticipate peak times and plan accordingly.

Driving Better Decisions Across the Board

Customer experience is a challenging discipline for retailers to master, but Parrish also offers optimism with the tough love delivered by the Forrester’s 2024 US Customer Experience Index: “It’s worth it… as our research finds that firms that are customer-obsessed grow revenue, profit, and customer loyalty faster than their competitors.” In-store analytics delivered by video intelligence systems can help organizations get there by empowering strategic decisions about merchandising, product and store layout, and marketing, all of which ultimately about serving the customer.

Are you excited about video analytics but concerned about the financial investment for your organization? Watch our on-demand webinar, “The ROI of Video Analytics”, to understand the industry data showing that 85% of end users experience ROI within a year! Watch now

Editor’s note: This post was originally published in February 2021, and has been refreshed and updated for accuracy.