The Best of Both Worlds: Leveraging Digital & Physical Channels for Optimized Retail Success

The Impact of Ecommerce and the Development of In-Store Metrics

The emergence of ecommerce and digitalization of retail have transformed the way we shop. Because of the expansion and popularity of online shopping experiences and the data driven insights into consumer behavior provided by online metrics, retailers are opting – backed by business intelligence – to invest heavily in their digital channels. Despite the massive push into the digital shopping space, many retailers and consumers continue to find value in physical stores. Whether it’s due to the nature of their business, the opportunity to offer a familiar shopping experience, or the combined business potential of physical and digital storefronts, many retailers and shoppers embrace the omni-channel shopping experience.

The Best of Both Worlds

Fortunately, in recent years, advancements in artificial intelligence technologies have given physical stores the benefit of analytical insights previously available only to their online counterparts. Assets like video surveillance systems, for instance, that were solely used for security and loss prevention purposes, can now be activated as business intelligence tools with tools like AI powered video analytics. Thus, agile retailers are learning to leverage comprehensive metrics across digital and physical channels to form holistic customer understanding, enhance marketing strategies, make data-driven decisions, and more.

Key Metrics for Digital and Physical Channels

To understand how to maximize the partnership between digital and physical retail, let’s take a look at the key metrics available to each channel.

Key Digital Channel Metrics

• Website traffic: Assess overall website performance by analyzing total visits, unique visitors, and pageviews.
• Conversion rate: Track the percentage of website visitors who make a purchase.
• Cart abandonment rate: Understand the percentage of website visitors who add items to their online shopping cart but leave the website without completing the purchase.
• Average order value (AOV): Determine the average amount spent by customers in a single online transaction.

Key Physical Store Metrics

• Foot traffic and people counting: Measure the number of people who enter the store.
• Dwell time: Understand which areas of a store receive the most customer attention and engagement.
• Store layout effectiveness: Evaluate the effectiveness of the store layout and product placement by analyzing the paths customers take through the store.
• Queue Length and Wait Times: Measure queue length, customer wait times and abandonment rates at checkout counters or service areas.
• Customer demographics: Track demographics such as gender and understand what each demographic engages with.
• Average transaction value (ATV): Based on POS data, determine the average amount a customer spends on a single purchase.

A Combined Effort

Alone, digital and physical retail metrics offer powerful data to inform organizational decision making, but when retailers break the digital-physical silo and leverage data from both channels, they gain a comprehensive understanding of their customers’ behaviors, preferences, and purchase patterns. Here are a few examples of how retailers can combine both digital and in-store metrics for comprehensive impact:

• Comparing channel sales performance: Both digital and physical retail channels provide metrics on the number of visitors; digital through website traffic and physical through foot traffic. Combining this data with sales data like average order value or average transaction value can help retailers understand how many people are visiting their store and how much they’re spending on average. This data can be analyzed over time to understand trends on a weekly, monthly, quarterly, and yearly basis. With insights from both online and brick-and-mortar locations, retailers can adjust marketing budgets or investments based on traffic and sales data.
• Understanding where customers spend their time: Website traffic tells retailers what products are the most viewed online, while dwell time tells retailers which products people are spending the most time interacting with in-store. Comparing these data points can reveal similar or varying tendencies between these channels. An interesting example is if a specific display – like men’s pants – has a high dwell time in-store. Minimal web traffic could be the result of in-store product placement or minimal digital marketing dollars allocated to men’s pants. Conversely, if a product – like women’s shoes – is generating the most web traffic, but isn’t being viewed in-store, there could be an issue with product placement or the store’s layout. Dwell time and website traffic are meaningful indicators on what’s popular in each respective channel and can help guide marketing efforts and revenue for their channel counterparts.
• Improving marketing campaigns and investments: Collecting customer demographic information is challenging for online retailers, but with video analytics, retailers can turn their video surveillance investments into a demographic collecting infrastructure. By analyzing demographic data, online stores can create targeted marketing campaigns tailored to the characteristics of their demographic groups. Demographic information can also be leveraged for website optimizations. Online stores can adjust website content, layout, and promotions based on their key demographics. With targeted marketing campaigns and website optimizations retailers can expect to see increased website traffic and improved conversion rates because the retailer resonates better with their audience.

Embracing Both Channels

As the world of retail continues to change, retailers need to embrace both digital and physical channels because of the continuous business intelligence data needed to drive proactive decision making across the organization. In a highly competitive market, where consumers have an abundance of choice, digital channels help provide unparalleled reach, while physical stores offer unique data that is otherwise challenging for retailers to obtain. By combining both channels, retailers can gain a comprehensive understanding of their customers, enhance marketing strategies, and make data-driven decision comprehensive understanding of their customers.

Interested in learning more about the data available from video analytics? Schedule a demo with one of our dedicated sales representatives to see BriefCam Video Analytics in action.