Augmented reality – once associated with the wearing of clunky glasses and feeling disoriented – is finally coming of age. By teaming up with social media, brands have successfully implemented AR to allow prospective customers to virtually “try before they buy.”
Augmented Reality goes social
The social media platform Snapchat may have pioneered it, but Facebook, Instagram, Pinterest and TikTok quickly followed with their own lenses, filters and effects. And retailers from Target to Gucci have realized its value not only for entertainment and brand awareness, but also for selling products.
Stuck at home and bored, would-be shoppers wiled away the hours with AR filters and lenses available on social media. Advertisers soon took notice of how filters and lenses could be used for virtual try-on and other experiences.
Seeing how that pair of Gucci sneakers is as easy as pointing a cell phone camera at your feet. And experimenting with makeup is much less messy using Sephora’s Snapchat lens.
Developments in AR
While the technology has improved greatly recently, there are still some limitations.
For example, while a customer can visualize just how stylin’ those kicks will be, AR can’t size the shoes. That’s unfortunate, because returns are a huge sore spot for retailers, particularly those selling apparel. The issue is that today’s cameras depth perception can’t accurately determine size.
Once AR technology improves enough to reliably size clothing, demand will likely skyrocket; currently, Snapchat says it has 200M daily AR users. That could translate into millions in revenue.
Social shopping to drive in-store traffic
Well-established brands such as Sephora have the best of both virtual and physical commerce. Using Snapchat, customers can take and share pictures of themselves trying on new makeup styles.
Social shopping lets the customer’s friends weigh in on the buying decision, and the product can be purchased directly through the app.
But the experience online helps to drive in-store traffic as well. Creating a fun, memorable AR experience on a social network helps customers remember the brand, which can prompt them to visit it in-person.
Those companies become “top of mind” for particular types of products. In addition, social shopping apps can promote store events and are effective for location-based marketing as well.
Snapchat’s “ephemeral” nature helps create a sense of urgency and builds a sense of exclusivity. Today’s Generation X shoppers in particular crave exclusivity and limited-time offerings.
AR can attract the “right” buyers by providing an engaging customer experience on social media platforms. That interactivity can benefit a brick-and-mortar channel as well, by bringing attention to the brand as an innovator willing to meet customers’ needs in person as well as virtually.
Because retailers are fielding orders from different sources – including online purchases with home delivery, online purchase with an in-store pickup (“click and collect”) and in-store purchases — keeping track of those sales and inventory is mission critical.
Omnichannel inventory management helps the customer make purchases confidently
Robust inventory management provides the means to get the correct products to customers quickly and efficiently.
Omnichannel inventory management is integrated across all sales channels, offering clear data visibility to retailers, as well as stock information to customers. It’s often coupled with smart warehousing, which automates back-end decisions and tasks, improving employee efficiency.
Omnichannel inventory management ensures that customers who want to use different devices and buy through various platforms are able to do so successfully. Omnichannel is a unified process in which each platform communicates with another, creating a seamless whole.
While multichannel retailers sell using many platforms, most of them are unintegrated. Store and online inventory management must be integrated with your other systems, including order and CRM software.
By integrating the inventory management systems, retailers have improved data visibility. All data on sales, suppliers, returns are in one centralized location.
When orders are placed – in any channel – stock is updated in real-time. Therefore, all employees, from the inventory picker to the store manager to the customer checking online supply, can be confident in the data they access, even if the orders were placed in a different country or channel.
RFID innovates, making taking inventory fast
Despite the heavy-hitting technology omnichannel retailers rely on today to conduct their daily business, physical inventory counts continue to be invaluable.
Such counts verify inventory and ensure there are no variances caused by overages or shrinkage, for instance.
However, this activity doesn’t have to be manual. RFID technology can help speed up inventory counts while providing workflow automation.
An RFID tag is placed on stock and read with a handheld device. RFID can scan or “read” many items at once and doesn’t require line of sight.
Products or pallets can be quickly read without positioning the tag directly in front of the reader, a big advantage in warehouses or other dense environments.
How RFID further empowers omnichannel operations
Keeping inventory counts accurate requires the integration of in-store POS that reflects the actual count on the floor, which is reflected in online data.
Although back-end technology is important to maintain accuracy, inventory is a customer-driven aspect of business.
Improving practices and systems assists retailers to meet more customers’ expectations, increase satisfaction and retain more customers.
Tailoring an omnichannel inventory management system to focus on customers helps retailers reap the benefits of having a loyal, satisfied customer base.
As a retailer in a competitive marketplace, a major focus should be monitoring the health of your business. For most retailers this means getting a handle on your Key Performance Indicators, or KPIs.
A KPI is a metric that is designed to give you a quick snapshot of some aspect of your business. A KPI might be a measure of sales, customer activity, or financial strength.
More than simply a bottom line number, a KPI is usually expressed as a comparison with some other factor. For example, looking at the average sale per customer gives you an understanding of the potential value of each customer.
Which KPIs should I track?
There are hundreds of KPIs that a retail business owner could be using at any one time. If an activity can be tracked and measured in your store, a KPI can be developed to provide you with business intelligence. One of the challenges is to decide on a handful of KPIs that provide you with the most valuable information based on the goals and objectives of your operation.
Every retailer will have a different set of KPIs. For example, a business that uses commissioned sales associates to sell to customers may place a heavy emphasis on KPIs that track the effectiveness of an individual sales associate while these KPIs may be irrelevant for another retail business.
You may want to track KPIs related to your customers. Simply knowing the number of customers who enter the store each day may not be enough for you. You may want to gain a deeper understanding about your customer’s shopping patterns and what converts them from a casual shopper into a dedicated, returning customer.
To do this, you need to carefully consider what data you should collect and analyze.
Choosing the right data
Data, by itself, is not a KPI until it’s arranged in a meaningful way. A list of sales transactions throughout the day is good data to have but it’s not the whole picture. The next step might be to calculate the total dollar amount of sales for the day. You can arrange the data in any number of ways: sales by department, sales by item, or sales by cashier. At this point, you still only have data to analyze.
The strength of KPIs is knowing how to use data to gain a competitive advantage. It all comes down to the goals and objectives you set for your business.
For each goal you establish, you must also create the metric that will determine if you are successful in reaching that goal. Your KPIs become the method by which you track your progress. If your key performance indicators do not reflect progress toward your goal, you must change the tactics you are using in your business.
Using raw data to optimize your retail operations
Let’s look at one simple example of how your goals and KPIs come together to give you a competitive advantage.
Marlene runs a small clothing store in a mid-size urban market. Lately things have been going good but the business has leveled off. She would like to increase her business over the next year. She creates a goal to increase her sales by 10%.
Marlene realizes that an obvious KPI is her total sales. She can also break down her sales on a daily, weekly, monthly, or quarterly basis to compare with the previous year. This gives her the maximum degree of flexibility especially since her sales tend to fluctuate according to well-defined fashion seasons.
Marlene decides that a good strategy would be to do more advertising on radio and television during the coming year. To find out if the advertising is bringing customers into the store, she decides to track footfall, the number of people coming into the store. Fortunately, she tracked her traffic last year but if she didn’t, she could use the new data by correlating store traffic with the dates and times that advertising is running to see if the ads have an immediate effect.
If she notices that store traffic increases for a few days after a television ad appears, she may make more strategic choices about when to run television ads. Or she may be sure to have a special sale during the weekend following a big flood of advertising.
By tracking average customer spend, Marlene can determine how much the average customer spends during each purchase transaction. In order to increase sales, she decides to place some displays with accessories, scarves, and jewelry close to the cash registers. The strategy works and she notices that her average customer spend amount increases due to impulse purchases while customers are waiting in line.
Although her total sales KPI indicates some overall growth, Marlene is not satisfied with the progress she is making. She begins to track her conversion rate, the number of transactions throughout the day divided by the number of people who enter the store. This seems to indicate that a lot of people are coming into the store but not many are making purchases.
To combat this, she could implement a number of new strategies. Perhaps she should take a look at rotating her inventory more frequently so the styles are kept fresh. She might decide that she needs to add new merchandise. Eventually, Marlene decides to hire additional staff to take more time with the customers and help them pick out merchandise.
To maximize the effectiveness of her new employees, she tracks shopper to staff ratio. This KPI lets Marlene determine if she has the appropriate number of employees on the sales floor to handle the volume of shoppers. Monitoring her wage costs, which is wages paid divided by the total sales, will also help her monitor her costs.
As her business grows, Marlene may decide to implement different strategies or develop completely new goals for her business. These goals and strategies may necessitate new KPIs to help her determine if they are effective. As her needs change, so will her data collection requirements and so will the way she analyses that data.
Tracking KPIs in your Retail Pro
Retailers using Retail Pro have several built-in tools to help them track important KPIs easily and automatically, including pre-designed reports that can be accessed in Retail Pro Reports.
Filters allow you to easily report on different aspects of your operation and break down your data into different segments to allow you to take a birds-eye view or get down into the weeds.
Retail Pro reports can also be completely customized. This allows you to save time and money by adapting an existing report to show exactly the information you need without a lot of work and effort.
From inside Retail Pro, you can use customer or inventory statistics to gain more perspective.
X-Out and graphical reports allows you to look at sales activity throughout the day and get instant analysis.
Have a different KPI that makes your retail life easier, or have questions about KPIs? Email us at email@example.com with your comments and questions.
Amid recent retail turbulence, there has emerged an opportunity to provide customers a better, more intuitive shopping experience in the wake of a global pandemic that had serious repercussions in the retail sector.
With many shoppers staying out of brick and mortars due to COVID concerns, online shopping became significantly more popular, especially for buying everyday items like groceries and toiletry items.
As a result, retailers now have a year’s worth of data on new (and existing) ecommerce shoppers that can be integrated with store sales data from the Retail Pro POS for personalization, providing a more holistic customer view.
By preparing personalized and integrated customer solutions, retailers can be better positioned for success as the ability and customer willingness to visit stores increases.
Learning from your customer data
Hyper-personalization refers to enabling personalized, contextualized interactions across all channels, including sales and marketing.
A study from Ascend2 found that 62% of marketing professionals consider hyper-personalization to be critical, but only 9% have successfully implemented the strategy. Traditionally, personalized marketing would include, for example, inserting a customer’s name into an email or serving up specific content on a landing page. Personalized experiences in stores would stem from a salesperson’s ability to engage in clienteling based on the client’s history with a brand, especially in luxury retail.
Today, hyper-personalization uses intelligent tools like visual analytics software like Retail Pro Decisions to aggregate store and ecommerce data, the marketer’s email engagement data, website interactions, and other sources of third-party data to predict customer behavior.
AI algorithms can also compare a company’s shoppers with others online who display the same interests.
AI can aggregate similarities and predict future actions based on those that have already been taken by similar users.
That allows companies to deliver extremely relevant offers or product recommendations.
Rather than making recommendations to shoppers based on their own purchase history, AI compares their preferences and buying patterns to millions of others to discover more advanced, nuanced purchasing habits.
The strategy also builds brand loyalty: The more personal the customer experience feels, the stronger the relationship can be. Integrated data analysis combined with AI-powered loyalty and personalized marketing tools like AppCard for Retail Pro offers retailers something more than the competition.
Acting on data gathered during COVID’s ecommerce upsurge
With the sudden influx of customer data during COVID, retailers are learning more about what is truly important to customers, and what is not.
For instance, curbside pickup is a highlight coming out of the new normal shopping experience, a feature that in particular is helpful to parents of young children, those with disabilities or anyone on a tight schedule.
Prior to the economic lockdown during the first half of 2020, curbside delivery was pretty much limited to grocery pick up.
Retailers must leverage their data analysis capabilities while considering how recent customer trends will impact their supply chains.
They can then accurately respond to both vendors and customers in specific, relevant ways. By understanding the context of what customers want, retailers can adjust to meet those expectations. Retailers can move beyond providing customers with a robust product selection online and in-store. Today, the top retailers also offer a customized, cross-channel, personal shopping experience, resulting in loyal, satisfied customers.
Retail Pro International (RPI) is a global leader in retail management software that is recognized world-wide for rich functionality, multi-national capabilities, and unparalleled flexibility. For over 25 years, RPI has innovated retail software solutions to help retailers optimize business operations and have more time to focus on what really matters - cultivating customer engagement and capitalizing on retail's trends. Retail Pro is the chosen software platform for omni-channel strategy by retailers in 130+ countries.