Smart Shelves Bring Customer Analytics to Store Aisles

Executive Brief

Smart Shelves Bring Customer Analytics to Store Aisles

Executive Brief

Ecommerce retailers gather enormous amounts of data about their customers, while at brick-and-mortar stores, managers are operating in the dark. They can only guess at who their customers are, where they’re browsing, and how long they’ve been in the store, let alone who actually makes a purchase.

Ecommerce retailers can easily gather the demographics of site visitors, track their product browsing, and entice them to complete purchases. They can also directly target customer ads and promotions.

Yet traditional street-side businesses lack real-time customer analytics. It’s hard for them to target in-store marketing. And measuring its effectiveness is virtually impossible. Motivating shoppers to move from browsing to checkout often requires in-store salespeople, which comes with heavy operational costs.

These are huge disadvantages in a sector that still operates primarily offline. Despite the growth of internet sales, 94 percent of all retail sales still take place in physical stores, according to Retail Technology Review. But as much as 75 percent of the time, customers can’t find what they’re looking for, resulting in stagnant inventory and lost sales amounting to more than $1.1 trillion a year.

Targeted, high-quality advertising gives store owners a critical edge. Though numbers vary by merchandise category, just 20 percent of store visitors on average go on to make a purchase, according to the International Council of Shopping Centers.

And while targeting ads can improve sales, few stores have the technology to do it. In a Forrester survey, only 20 percent of retailers strongly agreed when asked if they could use data insights to increase customer engagement in real time.

Of retailers strongly

agree that they can use

data insights to increase

customer engagement

in real time

20%

Smart Shelves Bring Customer Analytics to Store Aisles

Executive Brief

Smarter with NexCOBOT

NexCOBOT, a subsidiary of NEXCOM, has partnered with Intel® and Quividi to deliver a

powerful all-in-one solution designed for targeted in-store advertising. Their solution

provides retailers with a better understanding of customer behavior and demographics.

As shown in Figure 1, retailers can enhance customer satisfaction, boost revenue, and

streamline operations.

The Smart Shelf Solution for Targeted Advertising integrates digital signage, smart cameras,

edge analytics, and reporting in an end-to-end solution.

Smart cameras can capture and identify customers’ gender and age within any pre-defined

ranges. The system also records facial expressions, giving retailers a sense of customers’

moods as they watch ads, providing clues about which products they like or don’t like.

This means that retailers can focus in-store advertising and promotions based on analytical

data. Digital display content no longer has to be a matter of guesswork. Retailers can target

the right people at the right time with the right products to maximize marketing effectiveness

and boost sales.

With PowerDigiS—NexCOBOT’s digital signage software—retailers can design and display

interactive content tailored to customers in real time based on this facial recognition and

shopper behavior analysis.

“Let’s say you have five young men pass by a display. With in-store video analytics, Smart Shelf

can run a paid car advertisement,” said Nelson Chang, Product Manager at NexCOBOT.

“Or if a mature woman walks by, a perfume promotion could automatically be displayed.”

At the same time, complete images of customers’ faces are not recorded. Instead, the system

selects and analyzes only facial components, providing retailers valuable information while

preserving customer privacy.

Figure 1. NexCOBOT helps retailers boost revenue through data-driven insights.

Boost revenue by tailoring inventory and promotions

to customer interests

Enhance customer satisfaction by delivering

relevant, engaging content

Optimize operations by providing decision-makers with data-driven insights

Smart Shelves Bring Customer Analytics to Store Aisles

Executive Brief

Analytics at the Edge—Data Management in the Cloud

Raw data from the cameras is processed on-site. Later it is sent to the

cloud, where relevant data is viewed via VidiCenter management software

as shown in Figure 2.

Retailers choose how often to upload analytics from the store to the

VidiCenter—anywhere from every five minutes to daily. In the VidiCenter,

they examine their customer mix and can develop highly targeted in-store

advertising. For example, if analytics reveal a significant number of women

in their 30s frequenting the store mid-morning and lingering over active-

wear merchandise, the store may decide to offer a targeted promotion on

workout clothing during that time period.

In the VidiCenter, store managers can create customized reports, charts, and graphs to

analyze customer data for a particular store at a particular time—or many stores at

multiple times.

Combining store data with ecommerce analytics gives managers a comprehensive view of

overall customer behavior and purchases. Over time, this information helps them make smart-

er decisions about whether to open or close a store, or add new products to their shelves.

One NexCOBOT customer, a large retailer in Taiwan that sells everything from toothpaste to

washing machines. This extensive range of products appeals to every type of buyer—young

and mature, male and female. Since implementing Smart Shelf, the company can direct

advertising to very specific customer segments. It reports that sales performance has clearly

increased since it deployed the Smart Shelf solution.

“Managers get a comprehensive view of customer behavior and purchases by combining store data with ecommerce analytics”

Figure 2. NexCOBOT Smart Shelf captures customer data, processes it on-site, and sends it to the VidiCenter, where managers view reports and change ad displays.

Smart Shelves Bring Customer Analytics to Store Aisles

Executive Brief

All video content is displayed in ultra-high resolution, increasing the chances it will capture

customer attention. “Thanks to Intel, we provide powerful graphic performance in digital

signage, giving customers a better visual experience,” Chang said.

Like any technology, digital display equipment is subject to the occasional hiccup. If something

appears to go wrong, Smart Shelf sends an alert to a technician who can diagnose and fix the

equipment remotely, decreasing downtime.

A Wealth of Data

In the 21st century, it no longer makes sense for retailers to advertise, stock shelves, and order

merchandise based on hunches. The insights they gain from NexCOBOT and Intel technology

help them understand customers better and respond to them faster. By getting the right

products in front of the right people at the right time, smart camera technology brings brick-

and-mortar stores several steps closer to the data-driven success of their online cousins.

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