What video analytics can do

Dec 16, 2014

Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.

While privacy remains a big concern around in-store video analytics, stores are too much of an investment and cost too much to operate to run in the black hole of information that they increasingly appear to be in — especially compared to online.

Lolli and Pops, the candy retailer based in San Francisco, is in the process of rolling out video analytics across the chain. It leverages Prism Skylabs’ video analytics, which balances privacy versus the need for analytics by removing the people from the videos.

Here are three big opportunities that Marc Schwarzbart, Lolli and Pops’ VP of merchandising, sees for in-store video analytics:

Basic monitoring: In Mr. Schwarzbart’s past life at Old Navy, an executive "walking the store" would complain of out-of-stocks at a certain location while the inventory system would show they were full. Now, his merchandising team can look straight into a store from their desktops and see the shelves right away.

Root causes: Just relying on transactional data offers little insight into the root cause of a daily or weekend shortfall. Mr. Schwarzbart says, "Now, I can look right away — does the store look good? Why or why not?" Conversely, analyzing best practices at top stores through video analytics offers insights into underperforming ones.

Traffic Analytics: When product is underperforming, the team used to focus on whether consumers liked the products or if products are priced right. "Now my first question is, ‘Did people even see it?’ If two thousand people come into a store but only two hundred make it to the international candy section, I don’t have an international candy problem. I have a traffic and signage problem."

A big challenge is convincing his team to add one more activity to their already full plate. Mr. Schwarzbart focuses on using the company’s successes as a learning opportunity. He says, "All I have to do is show them things like how much of an impact moving one table three feet had on a store. Show them that video analytics are valuable to their objectives. And then they are converts."

Micro-managing, such as calling out a random out-of-place employee, can happen. But even with this level of monitoring, Mr. Schwarzbart has found that it’s still a better experience than the alternative. "Our CEO can ‘walk’ through stores from his desk and make pages of notes which now get sent to the store manager. It gives stores an opportunity to take feedback and make changes. This is much more productive than walking into a store, seeing something go wrong live and in person, and having an immediate reaction to it."

What advancements do you see in the use of in-store video analytics? Do you see parallels in the technology to the shopper insights gained from online analytics?

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8 Comments on "What video analytics can do"

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Steve Montgomery
7 years 11 months ago
Retailers have been monitoring what is happening in their stores since they first had stores. When you have one store and are in it every day you can see what is working and why. When you get to having a number of stores spread across a wider area you go to the stores on a periodic basis to find out the same things. Today video monitoring allows you to do the same things remotely. Video monitoring is not new. We worked several years with a client for who had positioned their system as an employee safety and theft prevention system. One of the first things we did is suggest their change their positioning (and their name) to reflect the broader capabilities it provided. It was and is still being used to determine if displays are put up at time and in the right place, if the shelves are stocked, etc. Once this was done it allowed the system to be sold to a far broader audience. These systems work very well in small-format locations where… Read more »
Joan Treistman
7 years 11 months ago
Seems like Mr. Schwarzbart doesn’t have much confidence in his employees’ ability to observe, report and offer solutions. Instead of encouraging and training those on the floor who have first-hand access and therefore knowledge of shopper traffic and engagement Mr. Schwarzbart would like to use the same approach surveillance cameras offer security personnel. Undoubtedly this is communicated to the staff one way or the other. I think this is demoralizing and demeaning, and to a great extent inefficient. Mr. Scwarzbart’s tactics may have some positive outcome with regard to increasing visibility of certain products. However, in the long run this use of video surveillance (I think the word “analytics” is too kind and incorrect) undermines what could be robust insights and actions from a collaborative and supported staff. At the very least I think retailers should encourage their on-floor staff to be part of the effort to observe, analyze, plan and implement. That strategy would offer many opportunities to improve revenue and profitability for the long term. And if the retail team, management and sales… Read more »
Cathy Hotka
7 years 11 months ago

The challenge here is to have people to study this information and act on it. Store operators say they have their hands full, so new positions may need to be created that are dedicated to performance management. That said, it’s pretty exciting to consider the potential to compare high-functioning stores against laggards.

Bill Davis
7 years 11 months ago

The ability to know in greater detail what’s happening in-store at any given moment and as Cathy mentions, being able to compare top stores against laggards. And from a consumer’s perspective, knowing that the analytics provider can mask their identity which Prism does through the use of computational photography.

From an employee standpoint, I would be inclined to work with them to define how video analytics get used. This way you get their buy-in and do your best to avoid the micro-managing issue. People are going to be out of place on occasion and to call them out for it in a non-constructive way will just alienate your workforce which isn’t productive for anyone.

Herb Sorensen, Ph.D.
7 years 11 months ago

This is obviously a serious effort to solve a serious problem—putting knowledge of what is happening on the selling room floor in the hands of management and staff in a continuous and possibly targeted manner. The problem is that retailers are already drowning in a sea of information, produced by tech engines with little real shopper understanding.

We’re taking a different approach to this with the “Retail Acceleration Engine,” which automates store response without butting into the retailer’s own hourly/daily management process. We’ll speak to this more directly at the upcoming AMA conference in March in San Diego: Coming soon—a “webby” store near you!

Carlos Arámbula
7 years 11 months ago

As a manufacturer, I like the merchandising function. More often than I would like, I find shelves not fully stocked during heavy promotional periods of our products, and when the shelves are empty we might as well toss the A&P moneys into a fire. That function alone would give promotional expenditures greater chances of success.

As far as customer analytics tool, I’m curious on how it would be quantified. It would be a useful tool to evaluate promotional materials, packaging, competitive environment, engagement, and so forth.

I can envision many more functions as a retail management tool, we already use monitoring systems in a lot of environments, consumers are used to it. Further, I believe it can improve customer service and help provide a consistent customer/brand experience across multiple locations.

Ralph Jacobson
7 years 11 months ago

Although video has indeed been utilized in the past, I still feel it is a great tool for suppliers to manage their displays to ensure retail execution.

J. Kent Smith
7 years 11 months ago

There are parallels in that you can track movement, but I’m not sure how much value there is in delving too deeply into that question. Video analytics is still relatively new, and like any new technology, the effort-per-insight tends to be quite high. But even still, some very provocative and actionable findings have already been presented (Video Mining & the CMA come to mind) yet how much has been acted upon? So it’s tough to hear the complaints about video time-and-cost when jewels have already been produced that haven’t been synthesized into retailers’ programs. And, not every store needs to be equipped with the technology—only a small subset do. Again, I wonder if the issue is in fact cost or simply the slow uptake that characterizes, unfortunately, many retailer cultures.


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