Intelligent Retail with IP Video Technology
We all know the feeling – and perhaps you even experienced it this past holiday: You buy a gift but need to return it as it wasn’t the right one. Then you have to go to several store locations to find the right item. Rather annoying, right? In this light, I wonder about the relevance of brick and mortar stores in the future.
Now Amazon is one of the most significant online players, in my point of view, and many others are playing it well, so the question is if brick and mortar stores will be outperformed by these online players in the near future?
Historically in this area, the US is 10 years ahead of the rest of the world, and an increasing number of brick and mortar shops are closing. Many big national shopping giants such as Macy’s, Sears, J.C. Penney’s, Kohl’s and Barnes & Noble had quite a poor Christmas season in 2016. Macy’s has announced the closing of 68 stores, Sears 168, and in total about 10,000 stores were expected to close in the US in 2017, and 25 per cent of shopping malls to close before 2022, despite an offline sale of 90 per cent.
If brick and mortar stores are to survive, they need to adapt as well as online stores. Online stores know their customers very well. It may be a bit scary, but I find it very convenient to be introduced to the products I find interesting when I shop online. Today, brick and mortar stores know very little about their customers, but it doesn’t have to be this way.
Video technology can help identify age and gender and even read the mood of customers, when entering the store. The technology is already built into modern video cameras. Video can also help track customer behavior, called heatmapping, which provides a unique knowledge of a customer’s path through the store and what products they’re looking for.
The use of video technology not only benefits the stores, it can also help guide the customers to the exact products they are interested in and divert them from products that are not relevant. The entire customer experience only improves by learning their behavior and by combing the online experience with the physical experience.
Why waste time entering a brick and mortar shop, looking for a product that turns out to be sold out? By searching relevant information online, the shop assistant knows when the product can be delivered directly to the customer. It’s all about fusing the online experience with the physical experience and this provides the customer with renewed power.
In the past, the retailer decided what the customer would wear, today the customer determines what the retailer will sell. – Brian Kilcourse
Amazon has nailed it. A few month ago, I talked to a large computer supplier who has only one requirement for their NAS (Network Attached Server) computer series: to make it a success via Amazon. Amazon, on the other hand, has significant requirements: In case of an excess of product returns or support calls, the product will be made unavailable from Amazon’s website. However, if a reseller understands Amazon’s business model, the chance for success is relatively big.
Amazon has certainly become a factor of power and has also started to build brick and mortar stores, too. I imagine that most traditional stores will soon realize that without an online supply chain, things will become difficult.
Another key to success for brick and mortar stores is to create better customer experiences, as these are often uninspiring, unengaging and downright boring. US supermarkets serving coffee and breakfast seem to perform a lot better than other stores that don’t offer similar experiences.
If you don’t have a strategy, you will be part of someone else’s strategy. – Alvin Toffle
Learn more about the video solutions possible to improve the retail operations.
By Hans Jorgen Skovgaard, VP R&D, Milestone Systems