Smart Shelves Bring Customer Analytics to Store Aisles

September 28, 2018 Teresa Meek

Ecommerce retailers gather enormous amounts of data about their customers, while at brick-and-mortar stores, managers are operating in the dark. They can only guess at who their customers are, where they’re browsing, and how long they’ve been in the store, let alone who actually makes a purchase.

Ecommerce retailers can easily gather the demographics of site visitors, track their product browsing, and entice them to complete purchases. They can also directly target customer ads and promotions.

Yet traditional street-side businesses lack real-time customer analytics. It’s hard for them to target in-store marketing. And measuring its effectiveness is virtually impossible. Motivating shoppers to move from browsing to checkout often requires in-store salespeople, which comes with heavy operational costs.

These are huge disadvantages in a sector that still operates primarily offline. Despite the growth of internet sales, 94 percent of all retail sales still take place in physical stores, according to Retail Technology Review. But as much as 75 percent of the time, customers can’t find what they’re looking for, resulting in stagnant inventory and lost sales amounting to more than $1.1 trillion a year.

Targeted, high-quality advertising gives store owners a critical edge. Though numbers vary by merchandise category, just 20 percent of store visitors on average go on to make a purchase, according to the International Council of Shopping Centers.

And while targeting ads can improve sales, few stores have the technology to do it. In a Forrester survey, only 20 percent of retailers strongly agreed when asked if they could use data insights to increase customer engagement in real time.

Smarter with NexCOBOT

NexCOBOT, a subsidiary of NEXCOM, has partnered with Intel® and Quividi to deliver a powerful all-in-one solution designed for targeted in-store advertising. Their solution provides retailers with a better understanding of customer behavior and demographics. As shown in Figure 1, retailers can enhance customer satisfaction, boost revenue, and streamline operations.

Figure 1. NexCOBOT helps retailers boost revenue through data-driven insights.

The Smart Shelf Solution for Targeted Advertising integrates digital signage, smart cameras, edge analytics, and reporting in an end-to-end solution.

Smart cameras can capture and identify customers’ gender and age within any pre-defined ranges. The system also records facial expressions, giving retailers a sense of customers’ moods as they watch ads, providing clues about which products they like or don’t like.

This means that retailers can focus in-store advertising and promotions based on analytical data. Digital display content no longer has to be a matter of guesswork. Retailers can target the right people at the right time with the right products to maximize marketing effectiveness and boost sales.

With PowerDigiS—NexCOBOT’s digital signage software—retailers can design and display interactive content tailored to customers in real time based on this facial recognition and shopper behavior analysis.

“Let’s say you have five young men pass by a display. With in-store video analytics, Smart Shelf can run a paid car advertisement,” said Nelson Chang, Product Manager at NexCOBOT. “Or if a mature woman walks by, a perfume promotion could automatically be displayed.”

At the same time, complete images of customers’ faces are not recorded. Instead, the system selects and analyzes only facial components, providing retailers valuable information while preserving customer privacy.

Analytics at the Edge—Data Management in the Cloud

Raw data from the cameras is processed on-site. Later it is sent to the cloud, where relevant data is viewed via VidiCenter management software as shown in Figure 2.

Figure 2. NexCOBOT Smart Shelf captures customer data, processes it on-site, and sends it to the VidiCenter, where managers view reports and change ad displays.

Retailers choose how often to upload analytics from the store to the VidiCenter—anywhere from every five minutes to daily. In the VidiCenter, they examine their customer mix and can develop highly targeted in-store advertising. For example, if analytics reveal a significant number of women in their 30s frequenting the store mid-morning and lingering over active-wear merchandise, the store may decide to offer a targeted promotion on workout clothing during that time period.

In the VidiCenter, store managers can create customized reports, charts, and graphs to analyze customer data for a particular store at a particular time—or many stores at multiple times.

Combining store data with ecommerce analytics gives managers a comprehensive view of overall customer behavior and purchases. Over time, this information helps them make smarter decisions about whether to open or close a store, or add new products to their shelves.

One NexCOBOT customer, a large retailer in Taiwan that sells everything from toothpaste to washing machines. This extensive range of products appeals to every type of buyer—young and mature, male and female. Since implementing Smart Shelf, the company can direct advertising to very specific customer segments. It reports that sales performance has clearly increased since it deployed the Smart Shelf solution.

All video content is displayed in ultra-high resolution, increasing the chances it will capture customer attention. “Thanks to Intel, we provide powerful graphic performance in digital signage, giving customers a better visual experience,” Chang said.

Like any technology, digital display equipment is subject to the occasional hiccup. If something appears to go wrong, Smart Shelf sends an alert to a technician who can diagnose and fix the equipment remotely, decreasing downtime.

A Wealth of Data

In the 21st century, it no longer makes sense for retailers to advertise, stock shelves, and order merchandise based on hunches. The insights they gain from NexCOBOT and Intel technology help them understand customers better and respond to them faster. By getting the right products in front of the right people at the right time, smart camera technology brings brick-and-mortar stores several steps closer to the data-driven success of their online cousins.

About the Author

Teresa Meek

Teresa Meek is an independent writer and editor with a background in journalism (Miami Herald, Newsday) who now specializes in content marketing. She writes blog posts, case studies, white papers, video scripts, and ghosted thought leadership pieces for major brands. Her clients have included Dell, Hewlett-Packard, Microsoft, Coca-Cola, Delta, Humana, JPMorgan Chase, and many other Fortune 500 companies. She is the author of the Amazon ebook Say It With Feeling: Business Writing in the Internet Age. She would be delighted to connect with you on LinkedIn or Twitter.

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