Making the Customer Experience Count
How to build customer retention through the use of intelligent infrared devices. Article by René Schrama (right), Worldwide Sales Director, Irisys InfraRed Integrated Systems.
It’s a simple equation: A good customer experience makes a loyal customer.
Although retailers are becoming increasingly sophisticated in understanding what makes consumers tick, customer retention is still one of the biggest challenges in an intensely competitive industry.
Retailers allocate large budgets to initiatives designed to improve up-selling, conversion rates and customer loyalty. But, first they should assess exactly what creates value for their customer at every point of contact: from entering the store and browsing the shelves and displays to product availability, being served by knowledgeable sales staff through to short waiting times at the checkout.
Make queue busting a priority
Market research company Martec recently carried out a customer service study, interviewing 40 senior executives from large retail chains worldwide. The survey showed that staff scheduling and reducing queues at the checkout were two of the key headaches for store managers.
Findings from analyst firm Gartner support this, highlighting that workforce optimisation and line busting are two of this year’s top five major technology applications in the retail industry.
To implement successful change, retailers will need to follow each shopping experience with the same degree of precision that they currently apply to the supply chain.
Monitoring customer traffic and behaviour throughout the store and on a continuous basis, gaining an understanding of how many shoppers enter and exit the store at any given time and how they move around the departments is key. Linking these numbers with sales data gives a solid measure of conversion rates and helps identify the gaps in customer service.
Access to reliable information on customer numbers and trends allows the store manager to predict peak times and optimise staff scheduling.
Tesco set an example here with its ‘one-in-front’ campaign, which recognised that waiting time at the checkout had a major influence on customers deciding which store to use for their weekly shop. A line-busting system is now installed above the tills in over 700 Tesco stores throughout the UK. Heat-sensitive infrared cameras, backed by sophisticated software, constantly monitor queue lengths and predict average wait times. Managers can react in real-time to ensure the right number of tills are open to deliver the best possible service to customers throughout the day.
Identify lost opportunities
Infrared sensors such as those used by Tesco are a cost-effective, accurate and non-intrusive way to measure customer flows in-store. They detect and track shoppers by their body heat only, and cannot record photographic images or read credit card details, thus protecting the customer’s privacy. The size and shape of a smoke detector, they can be fixed to the ceiling above doors, tills, escalators and entrances to distinct store areas or changing rooms.
Linking the information collected by these cameras back to other sources such as till or loyalty card data then starts the process of valuable data mining that can give a store that competitive edge.
Comparing customer traffic numbers with daily revenues and average transaction values, for example, provides significant insights into missed opportunities and reasons why shopping trips were abandoned. Knowing which floors, departments and changing rooms are the most visited allows managers to improve store layout and staffing to maximise sales opportunities. An intelligent people counting system also provides a solid framework to evaluate the success of staff training initiatives, staff scheduling changes and in-store marketing initiatives.
Achieve customer intimacy
More and more retailers are already using infrared technology. Irisys, together with its partners, has installed over 55,000 people counters worldwide and is currently selling 400-500 units a week. But while most retailers count the number of shoppers entering through the door, few actually track customer traffic throughout the store.
However, the real power of this technology comes into effect when it is used to measure customer flows at a more granular level. One of the early innovators to take people counting one crucial step further is Marks and Spencer.
When Marks and Spencer launched a new look for its stores, it used a customer conversion system to measure the impact on its business. The solution was designed to help the retailer understand how well it was drawing customers into stores, how many shoppers were buying and how many were not buying. The system linked customer counts from infrared sensors with POS data and provided local reporting by developing individual conversion measures for each store and each department.
Reports could be produced on a daily basis and long-term footfall and transaction patterns were produced, which included store comparisons.
By making simple changes to staffing, product availability and service based on the findings, Marks & Spencer was able to drive measurable improvements in conversion, units per transaction and basket size.
Infrared sensors in strategic places throughout a store can collect a wealth of data and contribute to customer insight. As with any business intelligence solution, ultimately what makes the difference is the way this data is analysed, used and the changes implemented.
If a people counting system is installed in every store of the chain, head offices will gain access to trend analysis between individual stores and regions, and be able to pinpoint the top ten percent performers. Best practices can then be observed and applied across the entire chain, starting a cycle of continuous improvement. In addition, making the collected data available to each department manager means they can adjust staffing, marketing and store layout to maximise their store’s performance and, ultimately, convert footfall into increased sales and customer loyalty.
About the author
René Schrama is Worldwide Sales Director at Irisys (InfraRed Integrated Systems Ltd.). He has over ten years experience in delivering solutions to the retail industry. For more information go to www.irisys.co.uk