With the year-end holiday shopping season fast approaching, forward-thinking retailers will be sporting an array of powerful video-driven systems to demonstrate product use, direct consumers to special buys and monitor the gridlock that can be in-store shopping.
Retail and other verticals have found they need more brains and brawn than systems limited to pitching products, curbing shoplifting and maintaining security in and around the stores.
So, faced with a shorter shopping season and increased online buying, retail chains are doing much more than opening their doors earlier on Thanksgiving evening. Savvy merchandisers have been implementing video systems augmented with analytics packages, to make shopping, buying and loss prevention efforts more data-driven and profitable.
Surveillance to Sales & Beyond
Where once video was used in VHS form for surveillance, retailers are now “using video analytics to capture customer trends, track traffic, catch shoplifters and reduce fraud,” according to a blog posted by Jennifer Overstreet of the National Retail Federation (NRF), a global retail trade association with members representing over 3.5 million establishments in the U.S.
If a picture is worth a thousand words, imagine what analytics are worth when drawn from in-store video systems.
“Brookstone and American Apparel (speakers at the NRF’s 2013 annual conference) use it to determine days and times with the highest customer traffic to optimize staffing,” according to the NRF blog. “Analyzing “dwell or how long customers stay in one area helps place employees and products in optimal places in the store. Merchandisers can use the same technology to determine which displays attract more traffic and marketers can measure promotions.”
Both retailers saw conversions (to sales) increase and losses (from shoplifting etc.) decrease, according to the posting.
A recent synopsis of research reports from ResearchandMarkets noted intelligent video analytics (IVA) “provides an advanced solution that performs intelligent video analysis and fully automates video monitoring. It automatically tracks and identifies objects, analyzes motion and extracts video intelligence from analog, digital, or IP video streams. These analytics can output real-time events and object data for video data mining or storage in a database.”
Better still; it says IVA can be integrated with other security and information systems to create new possibilities for using and managing video data.Adding IVA to your existing surveillance system need not be heavy lifting as IVA software can probably be layered onto existing surveillance systems as an incremental update as opposed to a new installation, according to the report. Packaged applications are available for reporting, alerting, and other dashboard capabilities.
The Intelligent Store?
When combined with video analytics, in-store video systems go a long way to setting smart marketing practices and procedures toward the ultimate goal of creating what’s referred to as, “the intelligent store.” Countless retailers have already taken the first big step by installing in-store video packages several years ago, with others looking to follow the best practices of these early innovators.
Discount mega-chain Wal-Mart earned much acclaim for pioneering in-store video by means of a national IPTV system that spans geographic regions and was rolled out starting in 2008 –five years ago. The centrally controlled system uses numerous in-store TV monitors to direct shoppers to sale and seasonal items.
This type of system, since embraced by other large retailers, is of extra value to sellers and buyers given the near full occupancy of their stores and the resulting annual traffic jams in buildings not built or staffed for peak crowds.
Smaller convenience stores continue to embrace out of home video systems to pitch you more while you’re waiting for your coffee, or waiting in line to pay. Gas stations have joined the fray with pump-top TVs to pitch you products in their “stores” while you pump gas.
Before “Big Data”
As a result of Walmart’s efforts, the retailing (and e-tailing) giant found itself awash in data far before the phrase big data was even used.
The company invested in analytics, and built its own open source big data tools as became public early last year. Walmart continued its search for customer insights on a global basis with the recent purchase of an analytics solutions vendor for its online operations.
Companies need not follow Walmart’s strategy to evolve in the retail industry or in other verticals. In fact, one of the biggest challenges in getting the most of video use in stores (beyond loss prevention) is organizational.
A system built without a foundation of cooperative strategy forged by marketing, financial and IT units will likely be challenge-prone. In the NRF Big Blog post mentioned above, emphasized cooperation among managers in these core units.
Given the deployment of video across vertical industries, it’s a safe bet that the market for IVA is poised to climb beyond original forecasts.
The global IVA market in 2011 was worth $180.0 million, and is expected to grow $867.8 million by 2017, according to ResearchandMarkets. It is expected to have an increasing CAGR of 30.4 percent from 2012 to 2017 with North America estimated to contribute $184.0 million by 2017 representing a CAGR of 29.1 percent, from 2012 to 2017.”
The Bottom Line
Make no mistake, in-store video systems that perform numerous functions and have the analytics to make retail operations more effective and lucrative are coming to a mall or plaza near you. You are being sold to, and watched, in the name of smart(er) marketing and the intelligent store.
Stay tuned and happy (in-store) shopping.
VP of Content
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