Four Surprising Ways Retailers Can Leverage Heat Maps

It's no secret that online shopping is growing rapidly, especially on mobile. In reality, e-commerce only accounted for 6.7 percent of retail sales in the United States in the fourth quarter of 2014, but with an annual growth rate in the double digits, it has earned our undivided attention.

From the retailer's perspective, online shopping yields incredible benefits. Sales are no longer confined to a store's regular hours, and intuitive algorithms can spur impulse buys by offering the perfect amount of enticement at checkout.

But perhaps the most important benefit of online retail is the data that retailers can aggregate.

E-retailers are skilled at tracking virtual customer paths and behaviors and analyzing multilevel conversion rates. They know the exact points in the purchase process when customers commit or fall off and are extremely adept at refining the customer experience accordingly.

As e-commerce sites continue to innovate the user experience, why shouldn't your retail store have the same opportunity? With heat maps, that's quickly becoming a reality. Your brick-and-mortar store can now capture crucial customer data to optimize the in-store experience just as you would online.

The analytics tool you didn't know you needed
Brick-and-mortar retailers are discovering a new tool that could revolutionize their businesses.

Using mobile apps, public Wi-Fi, Bluetooth, and beacon technology, retailers can now create physical heat maps of customer movements throughout the store.

For example, every time a customer with the store app installed enters the store and is connected to the Internet, you track his movements and send relevant notifications. For customers without the app, you can also use beacons to record their actions and send notifications via Bluetooth. If you provide free Wi-Fi to customers — or they're connected to a private network — you can still monitor their movements.

Although less popular, video tracking and facial recognition technology provide more opportunities to learn about customer behaviors, despite privacy concerns. But the real deterrent lies in processing video data quickly. However, with new analytics software that can instantly analyze video streams, human operators can now automatically detect and document human behavior, making it a realistic endeavor for retailers, too.

As a more passive approach, you can collect Wi-Fi or GSM signals emitted by mobile phones. Although many retailers haven't capitalized on this new approach, adoption is rapidly increasing due to its high degree of accuracy and coverage.

Another advantage of online shopping is the high level of customization that e-commerce sites can deliver. E-retailers leverage thousands of data points to personalize the experience in real time and become more intuitive as a shopper continues interacting with the site.

And heat maps can do the same for your physical retail store.

With heat maps, you can watch traffic flow as it's happening and analyze recorded traffic patterns over time. Armed with that data, you can deliver in-store customers relevant product information or promotions and refine the experience from top to bottom.

Putting customer data to work
Just like the data e-retailers collect from monitoring clicks, your physical retail store can glean incredible insights from storewide heat maps, which will allow you to:

Maximize your resources. With heat maps, you can detect where customers congregate most and send team members to that zone. You'll also know when to open more registers or when it might be time to clean an area that just saw a rush. As traffic patterns begin to emerge, you'll know when to staff up for a peak period or scale down during a quiet time.

For example, mall operators use heap maps to discover zones that need more security staff, additional cleaning and more.

Optimize your store layout. Understanding customer flow is essential for enhancing your store layout. By analyzing heat map data, retailers can identify bottlenecks and rearrange the layout to better serve customer needs. You can also experiment to find the most effective arrangement of products, shelves and departments.

For example, if one area sees a low number of visitors because it's off customers' main path, you could rearrange shelves to point people in that direction, revive low-performing areas of the store, and promote cross-selling.

Comparing the heat maps from different locations also enables retailers to understand how they can improve each store's performance. You can test new strategies or layouts in one location and determine whether it makes sense to roll them out to the entire chain.

Deploy more effective campaigns. Besides staffing, you can also use the data from heat maps to measure the performance of your marketing and promotional efforts.

With this data, you can see which promotions prompt visitors to purchase and which ones fall flat. By comparing the results, you can target the right customer with the right promotion, maximize your ad budget, and invest in proven campaign strategies.

Boost sales. By tracking customer movements, you can identify the areas that customers gravitate toward and use that data to inform product placement decisions.

Once you understand which parts of the store are most trafficked, you can place undersold items there to increase sales. You can also pull desirable items into less busy zones to increase traffic and exposure to areas that might otherwise be ignored.

Data can also recognize stock-keeping units to improve the shopping experience and measure the impact of new products.

Understanding consumer behavior is one of the biggest challenges for brick-and-mortar retailers, but it's also an area in which their online counterparts excel. By leveraging heat maps, you can bridge the gap between the online and in-store experiences and become just as responsive as any savvy algorithm. 

Roberto Ugo is co-founder and CTO of Movvo, an innovative platform that measures the flow of people in physical spaces and helps retailers enhance customers' shopping experiences. Ugo specialized in business data networks and e-commerce at Boston University and the University of the West of Scotland and has an international background in engineering and computer sciences. Movvo won the first MIT Portugal Venture Competition and has offices in Portugal, Boston, and Silicon Valley.

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