What video analytics can do
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?