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Coffee with CART (1/15): Better Understanding Your Customers Through Technology

Coffee with CART (Center for Advancing Retail and Technology) on January 15th focused on the recent National Retail Federation Show, which is the major tech show for all retail sectors, attracting 34,000 attendees and more than 500 vendors.

Discussions throughout the show highlighted in-store analytics. Andrea touched on the need for shopper intelligence in last week’s Coffee with CART recap. This week, they went into detail about what that actually means. Affordable technology gives you the ability to understand customer traffic throughout your store, much like you’d be able to easily track online shoppers. While you can use loss prevention video surveillance to accomplish this, mobile-based technology allows you to detect a shopper’s wi-fi enabled mobile phone and  anonymously track their movements around the store. You can see the departments and aisles they’re visiting and the amount of time they spend in each location. You can even see how long they spend dwelling on a set of products and if it results in a sale. This can help you learn the effectiveness of your endcaps and displays throughout the store.

While surveillance video allows you to identify the people as they shop in your store, it can be expensive (around $100,000 for a 40,000-square foot facility). Mobile technology offers about 80-90% of the benefits of video, but at a fraction of the cost (around $2,000-4,000). Mobile technology also gives you the ability to actively engage the shopper based on their location in the store.

Another topic at the show focused on the idea of not just Big Data, but Mega Data. We now have the ability to make anything intelligent – lighting that shuts off when someone leaves the room and turns on when someone enters the room, thermostats that can be controlled from smart phones, even refrigerators that can monitor temperature and humidity and adjust the settings to provide the optimal environment. The technology is small enough that even shopping carts could be equipped with a microchip. The insights gained from this kind of technology will lead to improved operational and marketing efficiencies.

A clothing store, for instance, displays one sample of each item in their store and shoppers then use their phone to capture a QR code under each item they want to try on. When they’ve finished browsing, they go to the dressing room, where the clothes they selected are provided in their size. This could be adapted to food retail, providing a customized user experience and the ability to market contextually-relevant items to your customers while they’re in the store, leading to larger basket sizes and more impulse purchases.

New technology is also providing an opportunity to overhaul the POS system at a much smaller cost to store owners. Software is moving to the cloud, while in-store hardware is moving to a tablet connected to scale and receipt machines. This will lead to lower service and warranty costs in addition to less hardware and software. The downside, however, is the need for continual internet connectivity. If the internet goes down, so does your POS system.

As more customers ask for free wi-fi in your stores, you’ll also need to consider IT security. Wi-fi ties into your store’s network, which exposes your POS and payment systems to hackers. CART will soon be issuing a case study on this topic.

All of this new technology will provide you with numerous opportunities to better understand your customers and communicate with them. You’ll see a lot of the technology at the upcoming NGA show in Las Vegas and as it gradually transforms the grocery industry.

Why do I work at AWG? “I love being a part of a fun team that creates unique ways to help independent grocery stores grow their businesses. It combines a few of my favorite things: marketing, food, and fun. Who doesn’t want to talk about food all day?” -Jimmy

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