Retail & Business Intelligence, How Video Technology Can Impact The Bottom Line
Here is an interesting article from Avigilon, which Usee supply, about the use of cctv for more than just crime and accident reporting. Usee already supplies people counting solutions, tillspy and heat map reporting.
By Gerald Narciso
Video is a powerful retrospective tool that can enable insight and improvement. Think of all the NFL football teams who, the day after every game, sit down to review yesterday’s “film” to break down the game into what went wrong and what went right so they can learn and up their performance the next time around. Retail stores are implementing a similar practice – only they are going digital to source data.
Retailers are collecting digital data in many forms and using it for Business Intelligence (BI) purposes, which is the collection and analysis of information to enable greater business efficiencies and better decision-making. One of the more exciting emerging trends for retailers is mining video and using it as a source of critical business data, which makes sense given the context-rich information that video can provide. Retail stores of all sizes are starting to realize when you turn high-definition (HD) video (often coupled with specialty video analysis software) into data, it can provide insight into customer behaviour and opportunities for business improvement that were previously unseen and therefore not understood.
“It’s an interesting development,” said Richard Smith, Professor and Director of the Master of Digital Media program at Simon Fraser University in Vancouver, Canada. “Grocery stores actually used to have big windows with one way mirrors around the roof of the store. It was partly because of loss prevention but also to get a better sense of their customers.”
He added: “Using video analytics to synthesize data and then generate intelligence – such as heat maps that indicate where people are piling up, is a very interesting and useful application for businesses.”
It is interesting; in fact mining data from video images is a potential game-changer for retail. Think of the possibilities:
- High-end department stores can learn where to place merchandise based on foot traffic and crowd patterns
- Grocery stores can use demographic data (gender and age) derived from analytic software in footage from HD cameras to place product displays more strategically and impact the bottom line
The opportunities are becoming a reality for retailers, sometimes by design and sometimes unintentionally:
- A recent article in the Wall Street Journal told the story of a coffee shop owner in California who initially installed a video surveillance system to meet insurance requirements but ended up using it as a tool to understand his audience and maximize earning potential.
According to the article, video surveillance has enabled the owner to discover the ways his customers navigate through the store and determine their purchasing patterns. On top of customer behavior, HD footage and analytics have improved store efficiency. For example, the owner learned to switch items like orange juice and Cokes in key locations depending on the time of day.
He also now knows how many people to keep on staff at any particular time, how to cut customers’ wait time (down 50 percent since deploying the technology) and what store items to stock based on the time of day.
Dr. Mahesh Saptharishi, Chief Technology Officer at Avigilon, points out that retailers with both an online and physical store presence are starting to implement analytics into their brick and mortar locations to identify patterns and trends with consumers.
“With an online business, it is easy to analyze and acquire detailed metrics on how your customers are navigating through your website,” said Saptharishi. “They want to have similar visibility at their physical locations.”
Using HD video paired with analytics enables retailers to track in-store customer behavior and get accurate insights on customer preferences for certain kinds of products.
“Retailers are able to measure whether what they do in their stores – whether it’s displays or product placement – are effective and in the end, whether they translate into higher sales,” added Saptharishi.
Acquiring such insight does raise some controversy. The “big brother” aspect is a common concern, especially if the surveillance is intended to gather data for marketing purposes.
“It’s a fragile relationship with your customers,” said Smith. “I think it’s potentially a problem. Most of the time people don’t like being watched. You can partially address those concerns by saying it’s just for security, so people might get used to it and come to terms with it. If you change the nature of the deal by using it for marketing, a retailer has to think about people’s feelings.”
Avigilon believes in the concept of “responsible surveillance,” or the use of surveillance for security or business purposes while still taking measures to respect an individual’s privacy.
“As video technology evolves, retailers will try to strike the balance between protecting privacy and improving market research. We at Avigilon see video as yet another very important source of data that, like customer sales data, can and should be mined for specific purposes,” said Saptharishi, “The opportunities to create better experiences for customers and citizens and to improve a retailer’s operations are practically limitless.”
Gerald Narciso is a Brand Journalist at Avigilon.