Imagine you are wandering past your favorite clothing store and you notice a pair of jeans on sale that you saw at full price just a few weeks ago.  Entering the store, you spend a few moments checking them out before spotting another pair and a 2-for-1 deal sign.  You try them on before deciding to take both.  Making your way straight to the register, you pay and leave the store.

Sounds pretty normal right?  Unless you consider that every move you made, including walking by the store, was recorded through the Wi-Fi feature on your mobile phone and compiled with all the other information from customers throughout the day into an online dashboard much similar to Google Analytics.  This dashboard tells the store just how effective, not only their promotional campaign has been, but also their window display, the placement of their signs, the general store layout and their staff are.

New technologies utilizing Wi-Fi on mobile phones are revolutionizing the bricks-and-mortar retail industry, turning many shops into environments like websites, where every heel-click and minute of browsing time is displayed clearly on a dashboard for analysis and split-testing.

Companies have been tracking shoppers and their behaviors for decades, using increasingly sophisticated technologies that blur or distort faces or private details.  Mannequins with hidden cameras as eyes, heat tracking maps and video camera surveillance run through software already provide suggestions on staffing levels, traffic flows and customer demographics.

Unfortunately, these options have been reserved primarily for the larger stores whose budgets allow the significant investment in hardware and manpower to make the outcomes worth it.  With the introduction of simpler software, such as Nomi – a technology start up that recently received $3 million in funding recently – even smaller businesses can utilize an internet connection to aggregate invaluable data on how customers interact with their store and use it to their advantage.

How do I see this changing the way bricks-and-mortar stores do business?

1. Learn how customers behave in your store  It may be that your new window display is drawing more customers than the previous one – but how do you know?  This sort of minute data can be gathered indirectly through an increase in sales but the number of steps required to get to the cash register make it difficult to determine whether it was the window display or your 50% off sale that worked the best.   Mobile tracking changes all that; you can actually see at which point customers turned into your store or turned away out of it.
2. Respond better to customer needs  American Apparel discovered the power of utilizing this technology when they installed ShopperTrak.  ShopperTrak showed that American Apparel’s busiest period was actually two hours earlier than what they thought.   In response, they increased their number of sales staff to account for the extra customers and correspondingly saw an increase in sales.  Knowing what your customers are doing helps you respond to their needs better.
3. Identify new opportunities  Owners using data to track their customers movements have been able to determine more effectively opportunities they previously missed, such as highlighting a popular item or building on the attraction of one item to increase the sales of another.  Every element that may effect conversion can be tested; price, signage, assortment and design.  Utilizing mobiles to track customer behavior connects transactions with traffic, allowing store owners to split test and analyze much the same with a physical store as they can with a website.
4. Increase Sales  And finally – the be all and end all; it will help you increase your sales!  Customer tracking data is used to increase conversions, much the same as can be done online with Google analytics.  Small % increases in conversion rates have shown to have the same effect on overall revenue increases for bricks-and-mortar stores as with online stores, netting hundreds of thousands of extra dollars in revenue every year.

While the data available through low-access technology such as Nomi is aggregate rather than providing individual information on each consumer, new features are in the works.  The new offerings will integrate with other apps that already connect with customers on coupons and sales, allowing customers to swap their personal information for deals.  Companies such as RetailNext offer basic packages similar to Nomi right up to full integration with security features including video cameras.

If you’re familiar with the way owners utilize analytics on their website to increase traffic conversion and want to try the same thing with your physical store, now is the time to road test the new technologies available.  The insights you gain will give you an advantage over your competitors and make you stand out to your customers.

References:
http://www.economist.com/news/business/21571452-security-cameras-are-watching-honest-shoppers-too-we-snoop-conquer
http://www.theretailintelligence.com/how-shopper-tracking-is-creating-a-new-retail-experience/
http://www.retailnext.net/about-us/customers
http://mashable.com/2013/02/12/nomi/
http://www.psfk.com/2013/02/retailers-tracking-shoppers.html