The measured store, version 2.0
Through a special arrangement, presented here for discussion is a summary of a current article from the blog of Nikki Baird, VP of retail innovation at Aptos. The article first appeared on Forbes.com.
At the NRF Big Show, a number of startups in the Innovation Zone were dedicated to providing heat maps and other computer vision-based solutions for understanding consumer behavior in stores. Their presence again offered hope that retailers may one day understand in-store behavior a bit closer to the level of granularity with which they understand online consumer behavior.
Unfortunately, this is a problem that solution providers have been trying to tackle for a long time. Veterans like Sensormatic’s ShopperTrak have provided multi-level solutions that range from simple infrared portal traffic counters to camera-based footpath tracking.
The challenge has always been to demonstrate enough value to justify the capital outlay required to outfit an entire chain of stores. “Sample stores” can be justified, but that typically doesn’t provide the revenue that these startups need. Some solution providers are trying to tackle this problem by developing solutions that sit atop existing loss prevention cameras (typically lower resolution). Others are trying to up the “revenue” side of the ROI calculation by focusing on identifying insights that are easier to obtain and faster to respond to.
I’m optimistic that this rush of new companies — and the VC money willing to fund them — speaks to an ability to overcome those challenges that have historically slowed adoption of solutions for gaining better in-store customer behavior insights. Having seen the shipwrecks littering the shores of this problem over the last two decades, however, I fear my optimism exceeds reality. That said, the bottom line here is that the gap between online insights and store insights is large and growing. The shortfall needs to be addressed for stores to regain their position as a growth engine in retail. Thus, my optimism remains.
DISCUSSION QUESTIONS: What are the main obstacles preventing retailers from tapping technologies to better understand in-store customer behavior insights? Do you agree that the gap between understanding online behavior insights and store insights is widening, and is that a problem?