The rise of ecommerce has proven to be worth its weight in gold for online retailers like Amazon. Initially capitalizing upon consumers’ desire for convenience, virtual shops have now evolved to rely on strategies centered around the data they gather from customers and the use of digital marketing tactics like pixel-based targeting and retargeting.
Online stores are able to use technology to gather information about their consumer base beyond basic demographics like age, annual income, and geographic location. Instead, with the acquisition of highly-detailed insight into customers’ specific interests, purchasing patterns, and with an extremely comprehensive understanding of their online behaviors, web-based retailers have been able to fine-tune their marketing tactics so precisely (and with so much resulting success) that many brick and mortar shops have been left wondering how to keep up.
The Brick and Mortar Conundrum
Although most brick and mortar retailers have websites and social media presences, the vast majority are still operating their physical stores by more traditional means. Staffing practices are still largely fulfilled by managers’ intuitive senses, often no real strategy is used for in-store product placement and display, supply-chain management operations are often performed in archaic fashions, and marketing strategies are commonly launched using shot-in-the-dark trajectories. Essentially, many brick and mortar operations lack the ability to gather consumer data with the same in-depth precision as their online counterparts.
With that said, traditional retailers do continue to hold some advantages over virtual retailers. In spite of the continued popularity of online shopping, consumers still tend to prefer in-person, face-to-face interactions when shopping. Additionally, the consumer desire for instant gratification is a demand online retailers simply cannot meet. Certainly, same-day shipping is possible, but it still comes second to the experience of purchasing an item and immediately having it in-hand.
The real question, then, is this: how can brick and mortar retailers find a way to combine the advantage of the in-store, instantly gratifying experience with the immense advantages that come along with having big data consumer insight akin to online retail giants like Amazon?
Benefits of Brick and Mortar Analytics
Many brick and mortar retailers are now opting to level the playing field with their online counterparts by meeting consumer demand for an in-person shopping experience while also improving the customer’s in-store experience even more.
Conventional retailers who choose not to employ the use of brick and mortar analytics in their stores are missing out on several key opportunities that benefit both their businesses and the customers who shop there. With the use of technology like in-store wi-fi and IoT systems, traditional retailers are able to capture information about the customers who walk through their doors and develop extremely specific customer profiles based on the data they capture.
For example, suppose a customer walks into a retail clothing store for the first time. Upon entering, the customer connects to the store’s wi-fi by exchanging some sort of information about themselves – usually an email address or through social media authentication. The store is then able to begin collecting data about that customer, from basic information such as their name or social media profiles, to more complex information like their interests, online purchasing patterns, and the frequency at which the customer purchases certain products online.
Using this information, the store would then be able to execute a number of strategies to not only turn this new prospect into a paying customer, but to turn them into a loyal customer. Some of these strategies might include:
- Hyper-Targeted Marketing & Advertising
One of the biggest advantages online retailers have over brick and mortar shops is the ability to precisely target certain portions of their market with finely-honed messaging and highly relevant product offers. With in-store analytics, traditional retailers would be able to push ads or sales promotions to a customer who walks in their doors based on that specific customer’s previous online purchases and preferences.
This sort of targeting is also useful for retailers who operate both online and brick and mortar establishments. Say, for instance, a customer researches or browses through a company’s website, comparing products. If the customer makes the online purchase, and then visits the brick and mortar shop sometime later, useful ads for promotions based upon their previous online activities can be pushed through to them on their smartphones.
This practice would also be useful in an instance wherein the customer originally intended to purchase an item online, placed the item in the virtual shopping cart, but then backed out of the sale. When the customer later makes a visit to the brick and mortar store, the store can push through a discount offer on the product to the customer in order to help close the sale.
Linking the customer’s online purchasing behaviors to their in-store purchasing behaviors could harbor great opportunities for brick and mortar operations. Online retailers like Amazon and Warby Parker have already begun opening physical shops – why shouldn’t brick and mortar retailers, then, grab a piece of the digital pie for themselves?
- Strategic Staffing & Inventory Management
Another advantage to the integration of analytics and technology by retailers is the use of in-depth insights to help make better decisions when scheduling staffers or making inventory purchases.
While brick and mortar retailers have used data to operate these internal processes in the past, decisions can now be based on clearly defined, highly specific information. Using tools like beacon technology to track in-store foot traffic, for example, managers can monitor exactly how many customers are entering their stores at exactly which times on exactly which days. This helps prevent overstaffing during slower times and ensures the store will have enough staff to manage shifts with heavier foot traffic.
- Strategic Product Placement
Another advantage to using in-store foot traffic analysis is improved in-store product placement. Managers now know precisely which areas of the store receive the most traffic and can therefore place key products within eyesight of that traffic. Conversely, managers know which areas of the store should actually be avoided when placing prime products or displays. It is also possible for stores to assess how many window shoppers come by their storefronts or to target previous customers who happen to be nearby.
Brick and Mortar Analytics: Giving Them What They Want
The bread-and-butter to any successful, consumer-facing business is, essentially, meeting market demand. Consumers are now expecting a top-to-bottom brand experience when purchasing from a company, but it’s difficult to garner insight into their needs and desires without analytics and the technology that delivers the data to marketers.
Brick and mortar businesses that fail to keep up with emerging retail technology trends will not only find themselves unable to compete with industry-leading online retailers, they will eventually find themselves out of luck – and out of business.
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