How your business can benefit from retail video analytics
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At this very moment, over 70% of Americans are shopping online, more than they did before the pandemic. As consumers, we are constantly connected to the purchasing experience. Through our handheld devices and at the click of a button, we can make purchases any time of day without leaving the house. But while e‑commerce continues to be an integral part of the global framework and economy, offline shopping at retail stores isn’t going anywhere.
There is still an appetite for the brick-and-mortar retail experience. According to Ripen, over 92% of purchases still happen offline. It seems there is something about the physical shopping experience that the customer values – for example, being in physical proximity of a brand, browsing items and face-to-face customer service.
There is growing pressure on physical store owners and retailers to optimize the in-store experience, enabling them to compete with the seamless user experience of an online shopping experience. Video retail analytics is one way of achieving this.
What are retail video analytics?
Retail video analytics are solutions businesses use to extract insights from observing on-site security and consumer behavior. The goal is to improve store security, increase sales, improve operations and manage stock levels. This is just the beginning of how much AI-powered video analytics can empower retailers to enhance the offline shopping experience and improve sales.
Security cameras and systems with built-in video analytics for retail stores can enhance in-store security and overall operations by alerting operators to suspicious activity, low stock levels and long queues or crowd formations at specific areas of the store. With these alerts, the store’s staff can respond to the issue identified and rectify it to help ensure security and improve customer satisfaction.
Intelligent video security for retail businesses
- Security devices for every situation
- AI-powered threat detection
- Valuable insights to drive decision-making
- Enhanced customer experience
How do retail video analytics work?
Retail video analytics solutions work by utilizing machine learning algorithms to process live video so that actionable insights can be extracted for the operator. These insights form the basis on which retail video analytics solutions perform a specific action, such as alerting the security team and management.
To perform the above, video analytics software is either built into the camera system or integrated into the overall retail security system as a third-party solution. When implementing retail video analytics solutions, security teams or operators should adjust the criteria, manage time settings and integrate them with existing store systems, including inventory, to suit the requirements of the retail stores. For example, the security team may want to utilize specific video analytics for when the store is closed, such as loitering analytics, or set predefined limits to manage stock levels and alerts to long queues.
Advantages and use cases of video analytics for retail stores
Improve store security
By pairing retail surveillance cameras with AI video analytics, stores can benefit from improved security and increased safety for staff and customers.
Retail security teams will be instantly alerted when a threat, such as a break-in or shoplifting, is detected by the AI-powered video retail analytics software within their video security solution. These instant alerts allow the team to respond to the threat faster and stop it from developing into a critical event.
AI video analytics in retail can also help prevent loss and manage shrinkage levels. According to the National Retail Federation’s 2023 report, shrinkage represents $112 billion in losses. With over 50% of retailers using video analytics to prevent theft, there is a clear drive from retailers to utilize the potential of their security camera systems. By using video retail analytics with different types of CCTV cameras in an area where customers tend to loiter or act suspiciously, managers can assess those areas or products against shrinkage and loss. If theft is prominent in that store area, managers can take informed action regarding physical security solutions or increased surveillance.
Equally, suppose customers and staff were ever in danger due to a fire or criminal activity. In that case, security staff have the visibility to act quickly and alert emergency services in real time.
Optimize customer journey
One of the main uses of video analytics for retail businesses is customer journey tracking. Retail video analytics provide footage of customers moving through the store, allowing retailers to gain insights into how they navigate the setup, product displays and layout of the store.
Retailers can monitor where their customers spend the most time and which products capture their attention. With these actionable insights through video retail analytics, retailers can improve the store’s layout to cater to behaviors, influence actions and improve product placement and marketing.
If customers appear confused or frustrated by certain areas of the store, those spaces can be revisited and re-optimized until customer tracking proves their success.
Products and inventory management
Another use for video retail analytics is monitoring products and inventory levels. When managers analyze video footage of store shelves and displays, they can track which products are selling well and which are not.
Sometimes, something as simple as moving a product closer to eye level can impact a customer’s interest, so these operational insights can be valuable in driving the retailer’s decisions about product displays.
Additionally, stores can use video analytics in retail security systems to make accurate decisions about inventory levels, which products need replenishing more frequently, or discontinuing entirely.
Streamline in-store operations
Live retail video analytics can monitor employee performance, identify areas of weakness or improvement and cater to employee needs with additional training. Video retail analytics will ultimately improve store performance and operations, increasing proficiency and productivity. This is because companies with employees who are properly trained, empowered to carry out their responsibilities and engaged are 21% more profitable than average and 17% more productive.
Employees taking longer to perform certain tasks may require additional support or training. At the same time, customer service teams or store associates can be assigned to areas of the store where customers might need additional assistance.
Overall, business intelligence insights through video analytics for retail business operations can drive informed decisions that improve the store’s efficiency.
Enhance customer experience
Retail video analytics can help brick-and-mortar businesses create optimal shopping experiences for customers. Nearly 50% of retailers use video analytics to analyze the behavior of in-store customers. For example, video analytics for retail businesses can track footfall or store traffic, monitor movements or identify specific individuals or groups. This allows store managers to reduce customer journey bottlenecks, such as long queues or heavy foot traffic.
Live video analytics in retail can provide real-time data into how many customers are currently queuing up versus how many customer service desks are open and whether this is clogging up the flow of store traffic.
Employees and managers can also use these traffic patterns to identify areas that are causing frustration or confusion to customers or displays that aren’t attracting as much attention as intended.
The live tracking of individuals through AI video cameras can also monitor how customers move around the shop, allowing retailers to optimize the experience and align the store layout with the customers’ needs and expectations. This increases efficiency and allows managers to monitor sales assistants’ performance and ensure optimal customer satisfaction. If a particular employee isn’t interacting with customers as much as others, specific training can be brought in to improve their skills and performance.
These insights can also be used to vary employee presence depending on the time of day, day of the week, etc. For example, if a Saturday morning yields the highest footfall, more customer service teams can be placed on the floor to drive sales and improve efficiency.
Hone sales strategy
Retail video analytics are very often used to track product and sales performance. Live tracking of how many customers make a purchase, how much they spend, and which are the most popular products helps retailers and managers maximize their sales strategy to increase profits.
If a product is not performing particularly well, this sales strategy approach can be used to offer discounts or promotions to boost sales and profits. Or, if a particular cohort or group is spending more than others or spending more time in certain areas of the store, they can be targeted with more personalized discounts and promotions related to their habits and preferences.
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What’s inside:
- Key retail security threats and challenges
- Essential considerations for security systems
- Expert loss prevention strategies and tips
- Comprehensive security checklist for retail businesses
The key features of AI video analytics for retail businesses
Real-time monitoring
This allows retailers to estimate the number of visitors on any given day, enabling them to identify the times and locations of the highest footfall. This means retailers can make data-led decisions about their staff and marketing programs.
Heat-mapping
Heat mapping is often used to track customers’ paths to help retailers pinpoint the most popular sections of the store or areas that might need more attention or stronger marketing strategies. If customers take a particular path immediately after entering the store, product placements and layouts can be organized accordingly.
Dwell time
Providing information on dwell times empowers management to understand how long customers spend in certain areas of the store. This helps retailers better understand their customers’ needs, where they need further assistance or learn which displays and merchandising are effective.
Statistical video analytics in retail
The statistics provided by AI retail video analytics are crucial to informing data-led marketing and merchandising decisions. Statistics can be collected annually, allowing retailers to make informed decisions about seasonal campaigns, days of the week, or times of the day so that services are as personalized as possible. Preparing a retail security plan tailored for the holiday season ensures these decisions align with peak shopping periods, maximizing security and customer satisfaction.
Pathway video retail analytics
Pathway video analytics for retail can be used to enhance the movement of customers through the store. This allows retailers to spot bottlenecks, any long queues and align staffing decisions to improve the customer (and staff) experience.
Considerations for retail video analytics solutions
Of course, as with any large investment, there are considerations to take into account when deciding if this technology is right for your business.
Privacy
With retail video analytics, there will always be privacy concerns. Due to the amount of data being collected, processed and stored, retailers must consider that customers may want to avoid being monitored while shopping.
Therefore, retailers need to be transparent about collecting data and how it’s being used. To protect customer privacy, they should also ensure all regulations are followed and their procedures adhere to data protection laws, including the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Businesses should also ensure that the data collected by retail video analytics is secure and only used for the authorized purposes outlined in their privacy policy.
Integration
When exploring viable retail video analytics technology, it is important to seek a solution that can seamlessly integrate with your existing security infrastructure, such as your video security cameras.
Camera-agnostic video analytics software allows you to integrate the technology with most security cameras. This saves you from having to replace your existing cameras. It also eliminates long deployment times as the software can be integrated with the video security system quickly, allowing retail store security staff to immediately take advantage of the benefits of video analytics software.
Cost
The initial implementation of any retail video analytics and AI video retail analytics systems should be considered before the investment is made. If there are no cameras currently in place, costs may be incurred for CCTV installation and other integrations. There will also be ongoing maintenance costs and fees associated with testing and upgrading the system.
Employees will also need to be trained on how to use the system and there may be costs associated with new hardware and software. All costs should be weighed against the potential returns on investment.
Leveraging video analytics for retail businesses
Video analytics for retail businesses are integral to carving out and creating the best experience for customers, maintaining profitable sales strategies, and creating more efficient staff and store operations. Retail video analytics also enables stores to maximize their security technology, make data-led decisions and support security staff with increased accuracy.
This is especially important at a time of e‑commerce disruption and significant growth in the online purchasing space. Customers are drawn to the instant gratification, convenience and seamless experience offered by online retailers. Brick-and-mortar stores are redundant, but there is more that can be done to compete with the efficiency offered by online competitors.
Are there genuine needs for this level of video retail analytics and AI analytics in your store? If you believe you can maximize your security functions, improve decision-making and optimize the customer experience and store operations, it’s certainly an investment worth considering.