Why video-based shopper analytics will bow to mobile

Video is a powerful tool to study in-store shopper behavior but mobile has its advantages too. And they are growing.

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Right now there is a shopper entering one of ten special Lowes Foods grocery stores somewhere in the state of North Carolina. She is most probably rolling her cart past the fruits and vegetable section in the front right hand section of the store where unnoticed and probably unbeknownst by her, her smartphone, which is WiFi-enabled at the moment, sends out an inaudible ping that is picked up by a nearby unobtrusive sensor.

That "ping" was sent courtesy a new initiative launched earlier this month by Wake Forest University School of Business, Lowes Food and a handful of vendors and partners including RockTenn Merchandising Displays, location analytics provider Birdzi and the Center for Advancing Retail & Technology, or CART.

Lowes is permitting ten of its stores – which are not being identified – to serve as innovation or learning labs to study shopper behavior. It is expected the data – to be precise, the real-time data – will yield insights into what works in making a store more efficient, and yes, profitable.

Now let's imagine how the rest of her visit goes.

She keeps going, stopping in the bakery aisle, the frozen foods aisle and the deli. She remembers an item she forgot in frozen foods and promptly does a U-turn to add it to her cart. Then it is off to the personal products section, where she restlessly moves back and forth along the aisle searching for, searching for…

Well, unfortunately for Lowes Food and the academics following our shopper's journey we don't know what she is looking for. But the fact that she is looking for something and not finding it is significant in itself.

Indeed the shopper's seemingly innocuous path around the store has already yielded a wealth of information, starting with her drive by in fruits and vegetables.

To be sure, shopper behavior has been tracked by both industry and academia for decades when the most advanced technology available for the cause was one-way mirrors through which the shoppers were studied. This particular initiative, however, comes with a number of bells and whistles, its backers say.

For starters, with ten stores making up the lab it is easy to set up a control environment for the test, which might measure anything from a particular shelf's arrangement to signage advertising a sale to variations in pricing of certain goods.

Lowe's long-term commitment to the endeavor means the research projects can last 8 to 12 weeks per test.

Already a few major consumer goods products companies have initiated tests, Roger Beahm, executive director of the Center for Retail Innovation and professor of marketing, tells me.

"We are seeing very strong interest from the industry."

Now, back to our shopper.

After her prowl through the personal goods aisle, our shopper heads to the check out line where she opts to wait for a full-service cashier instead of using the available self-service lines. Duly noted.

Now here's what the system missed. While waiting in line, she picks up some trial-sized toothpaste tubes. Ah ha! Could this have been the item that our shopper was looking for in personal products? Very possibly.

If the retail analytics system used had been video-based that data item would have been included in the mix.

But that is okay with Gary Hawkins, CEO of CART.

"Obviously video is very powerful," he tells me, "but it has two downsides in cases like these. It is very expensive and it is unable to separate a shopper from an employee of that store."

Mobile, by contrast, "gets you 80% of the benefit of video for less than 20% of the cost."

That, of course, is Hawkins' educated opinion. Ask providers of video analytics solutions for the retail industry – and there are many – and they will be quick to offer the advantages of their tech approach. Some variation of being able to note the shopper buying the toothpaste in the check-out aisle as she waits in line would be top of the list.

However, mobile versions of these systems are gaining traction in Hawkins' opinion.

Apple's iBeacon technology has raised awareness of what mobile tracking can offer in large venues. There is the lower cost. There is the fact that enough consumers carry around smartphones now to make such experiments worthwhile.

Also these systems – the one in place at Lowes Foods is an example – are able to glean much of the same information and display it in similar formats as video. The Wake Forest lab's mobile tracking tech can also create heat maps with the incoming data, Beahm says, showing the bottlenecks in the store or in aisles that are more frequently visited.

Anonymity is also a promise of the mobile tracking providers. In the case of the Wake Forest retail lab, the technology gives each visitor a unique, anonymous identifier at every visit. Video analytics actually record the image of the person, although for all intents it is anonymous too as humans do not tend to watch these hours and hours and hours of recording.

Still, given a choice, which would shoppers prefer to have recording their movements (assuming they were given a choice)?

All of these trends are going to make mobile the tracking technology of choice one day for retailers, Hawkins predicts.

"Right now video analytics are the dominant technology," he says. "There are only a few companies leading with mobile. But we are definitely seeing rapidly growing interest in mobile analytics among stores."


Copyright © 2014 IDG Communications, Inc.

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