RetailNet enhances business performance
The integration of technology into one ecosystem is an exciting trend in retail
As a retailer, understanding your customer is more about knowing why, how and what they do rather than who they are. It’s about integrating multiple technology platforms to collect and connect data points of behaviour patterns to curate an enhanced shopping experience that is mutually beneficially, something SA retailers are moving towards.
Using tech to collect and measure data, and influence behaviours, is not new. Apple has been doing it in their stores for some time. Back in 2013, what Apple and the Crocs footwear shops were doing in the retail space was called a “revolution”. They were measuring the number and frequency of foot traffic through their stores to maximise revenue from each store instead of opening new stores, which would entail more investment costs.
What they were doing was what online retailers such as Amazon had been doing for years in tracking their customers through cookies, but taking it into the brick-and-mortar space to increase efficiencies of doing business by having a better understanding of their customers’ behaviour. Retailers, partly because of changes brought about by the pandemic but largely because of an awareness of how retail is shifting, are now seeing the greater need for behaviour data collection, analysis and interaction.
What’s exciting in this space right now is the integration of the technology usually used for different purposes by different silos in business, into one ecosystem. This not only enhances the services each of those silos offers, but allows for a comprehensive collaboration between them that benefits the business as a whole. The components that stand out for us in collecting these data points are point-of-sale devices, CCTV cameras and Wi-Fi. But the final and perhaps the most important component to bring it all together, is networking and integration. All this data is pointless if it isn’t used to increase value and revenue.
Customer behaviours have changed in the past year, varying from country to country. In SA, physical stores are still going strong. Malls are getting busier again, and while some retailers struggled during the first lockdown, others have recovered and are doing well. The trends during the pandemic have been well documented: an increase in online shopping; more purchase decisions made through online recommendations; a greater demand for quick and efficient service; a heightened need for safety; a move to buying locally; and the desire for improved convenience.
While many of the changes with regards to online shopping will remain, a McKinsey report in October 2020 found that 40% of South Africans polled had already returned to normal out-of-home retail activities, such as going to retail outlets. It also found 79% of South Africans tried new shopping behaviours, which showed a change of loyalty to brands and retailers, and how they shopped. That is both a challenge and a great opportunity for retailers. How do they track and influence customer behaviour into preferring their brand? How do they better know and service their clients?
For the tech industry, it’s not about offering incremental value for the separate silos in the business, but providing integrated ecosystems for retailers across all aspects of their business. Let’s start with CCTV, which is deployed in multiple ways, whether it be for security or stock management. What about a singular CCTV system, used for security and customer analytics, running across the same network that is used for point of sale, as well as guest Wi-Fi and CCTV. It becomes a single ecosystem for the retailer.
If you take it further, using it in the networking realm, connecting it to the back-end of the system, the cloud, the data centre, you make it a part of the ecosystem instead of a stand-alone piece of equipment. A customer walks into the store or the mall is identified by their loyalty card and logs into the free Wi-Fi. They can be picked up on CCTV and you can see if your loyal customer is spending too much time in a queue, what aisles they frequent most often, what advertising point of sale attracts them.
There is an enormous evolution happening in the Wi-Fi space. For us at home, Wi-Fi is access to the internet, but for retailers globally, Wi-Fi means access to their customers. Locally, we don’t tend to use it the way we could and should. We have invested in the analytic capabilities and can provide the data needed.
We are looking at covering malls with Wi-Fi 6 to show retailers that we can show hotspots for customers in the mall, the peak times in the mall, whether your trade matches the peak trade of the day, which type of consumers are somewhere else in the mall. For higher LSM customers, free Wi-Fi may be an inconvenience, but for lower LSM customers it may be a part of their shopping experience, where they can upload and update their devices.
All consumers, irrespective of their LSM, are still seeking convenience. Phone downloads, a loaf of bread, or prime beef. All are equally demanding, so a knowledge of their needs is vital. Knowing trends of what they want on what day of the month helps keep stock levels ready for that demand.
Knowledge is a powerful thing in retail, particularly as we recover from the pandemic. Ensuring it’s used properly by overcoming the hurdles of silos will increase the speed of that recovery.
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This article was paid for by BCX.