Retail futurescape - changing technologies for improving retail operations

Jan L. Davis Professional Board Member

Embracing analytics

Online and mobile

Companies to watch ◦ Pedestrian counting & tracking

◦ “Big data” solutions

Summary

Copyright - Jan L. Davis - April 19, 2012 2

“If you can’t measure it, you can’t manage it.”

Need for metrics never more acute

Growth of online and mobile impacting brick & mortar

Understanding profit growth levers - crucial


Marketing spend Store traffic Labor hours Conversion rate Ticket/basket size Inventory turns Out of stock conditions New product introductions

And they all interact!


Embracing analytics

Online and mobile



Summary


6

Retail stores = showrooms for online shopping?

Amazon Price Check might be evil, but it’s the future, Erik Kain, Forbes, 12/14/11


8

Mobile Check-out

eMobile POS

On the spot

Customer engagement

Sustaining and disruptive change

Embracing analytics

Online and mobile



Summary




Digital video single-purpose device with embedded technology

Overhead infrared readers

Side-mounted gates with infrared readers

Digital video appliance with cameras

Hybrid - automated human review of security camera video

Smart phones


Why count traffic? ◦ Scheduling labor ◦ Measuring marketing impact ◦ Improving service through training & feedback ◦ Tracking KPIs like conversion rate

Why track shoppers? ◦ Assessing capture rate & unique or repeat visitors ◦ Improving layouts and planograms ◦ Measuring engagement with displays ◦ Calculating SKU conversion ◦ Improving service

When Retail Customers Count Conversion: The Last Great Retail Metric ◦ Both by Mark Ryski, Headcount


13%

13%

2%

3% 4%

4%

8%

19%

34%

72%

Price

Price comparing

Quality of merchandise

Line at register

Sales assistance

Couldn’t find size

Couldn't decide on item

Couldn't find item(s)

Just browsing

Copyright © 2007 Deloitte Development LLC. All rights reserved.

Lost Retail Opportunity Reasons for not purchasing

72% of reasons for not buying are easily within the influence of the store

14

Global leader in thermal imaging devices for broad array of applications

People counting and queue management in retail ◦ Resell devices to multiple people

counting companies

◦ Partner with large supermarket chains (Tesco, Kroger) for queue management


ReTel’s Technology integrates with security cameras to track: ◦ Operations

◦ Consumer behavior

◦ Merchandising

Hybrid computer vision and video tagging assembly line

Scalable from 1 to 1000+ stores

Proprietary & Confidential – Please Do Not Distribute

“Google Analytics for Real World Stores”

16 Copyright - Jan L. Davis - April 19,

2012

Customer Counts By Day of Week

Customer Counts By

Gender

Avg. Customer Counts By

Hour

Detailed Demographics:

Age, Gender and Height

Not Shown: Group Size

17 Copyright - Jan L. Davis - April 19, 2012

Shopper Interaction Heat Map

Category Conversion

Funnel

Sales Associate Metrics

Sales Associate

Impact


Anonymous tracking of GPS-enabled phones

Capture rate, dwell time, unique and repeat visitors, benchmarking

Inexpensive hardware

Allows consumer

opt-out online


Euclid Learning Machine

Removes “noisy data”

Raw Data

Heuristic Filters

Filtered Data

Operational Analytics

Marketing Analytics

External Meta Data (i.e. Yelp, Weather, Retail data, Consumer opt-in data)

Copyright - Jan L. Davis - April 19, 2012

Simple metrics create real revenue opportunities

Retail Property Owners Out-of-Home Advertising

Key metrics vary by store type: Example: Apparel Example: Coffee

Used for operational, planning, advertising and leasing Example: Tenant Mix

Bringing the best of online advertising to the offline world Example: Impressions, Conversion, Relevance

Copyright - Jan L. Davis - April 19, 2012

Consumer retail behaviors too numerous & diverse for commonly used tools ◦ Increasing volume

◦ Increasing speed

◦ Increasing variety, both sources & types

DunnHumby

Retail Solutions


Partnered with Tesco to launch loyalty card Launched in US with Kroger JV, exclusive for

grocery Expanded to Macy’s & others Analyze transaction & loyalty card data Overlay research, media & online data Mine data to localize & personalize offers ◦ Direct mail ◦ Email ◦ Online contextual ads

Provide demand-based pricing optimization



Paying customers are CPG companies.

Provide free services to retailers ◦ Analyze point-of-sale, supply chain, merchandiser

feedback, customer loyalty data

◦ Fix out-of-stocks, correct root causes

◦ Ensure compliance with pricing, promotion, planagram commitments

◦ Operate replenishment programs

◦ Improve new product introductions


Sale

s &

Mark

eti

ng

Category Management

Pricing Management

Promotion Management

New Product Introductions

Store Operations & Field Sales

Supply

Chain

End of Life & Package Transitions

Shrink & Unsaleables

Out-of Stocks

Inventory Management & Replenishment

Forecasting and S&OP

Retail Execution

Management

Changing environment: opportunity & threat

Analytics ◦ New metrics emerging

◦ Standard metrics matter more than ever

Online and mobile ◦ Drive customer behavior

◦ Provide new operational solutions & threats

“Simultaneous discovery” epidemic ◦ Shopper counting & tracking

◦ “Big data” analysis and solutions



Jan L. Davis [email protected] 312 961-2203 (cell)

mailto:[email protected]