Analytics and the Big-Box Retailer: Challenges and Opportunities
What does it mean to be a big box retailer?
Mega. Hyper. Super. Many words can be used to describe big-box retailers, which can be defined most simply as retailers housed in large warehouse-style spaces that offer a wide range of low-cost products (some packaged in big boxes) covering many consumer needs.
While one-stop shops like Walmart and Target—to use common examples from the US, arguably the birthplace of big-box retailing—are big-box retailers covering a wide range of products answering consumers' most common demands, there are many specialized big-box retailers. For example, Germany's MediaMart, with its focus on consumer electronics; DIY home improvement store B&Q in the UK; and Sweden's IKEA, which specializes in meatballs...and Scandinavian lifestyle furnishing.
The neighborhood Best Buy may not be concerned about measuring visitor behavior outside the four walls of its showroom space, but DIY retailers using in-store analytics to improve performance are. And with good reason, understanding the relationship between indoor and outdoor retail spaces is crucial for optimizing layout and product placement.
Because big box usually means big carts, layout optimization is a particularly important issue for big-box retailers. A big-box retailer not attuned to the relationship between product positioning and how customers move through a space with specialized shopping carts could miss selling opportunities, or worse, create unnecessary friction that diminishes the customer experience.
Can in-store analytics be done in outdoor spaces?
Many readers have undoubtedly found themselves in an "associate desert" in a big-box store, a frustrating situation with significant financial consequences. That experience repeated in a vast outdoor space at a DIY retailer can be a deal breaker for some consumers, one of the reasons some home improvement stores have established a point of sale in outdoor spaces in recent years.
Brick-and-mortar retailers can connect data capture devices to a broad range of automated in-store processes, and many use these systems for in-store analytics to manage staff allocation and shorten A/B testing periods. The overarching goal for many retailers of varied sizes is the same: manage operational costs while delivering a remarkable retail experience.
The range of data capture devices that can cover the large physical areas big-box retailers occupy is already limited, as not all technologies have the range or precision needed for an effective analytics protocol in such an environment. For those that can accurately capture objective, real-time data in these expansive spaces, outdoor applications pose different challenges.
Indoors, data capture devices are protected from rain, snow, extreme heat and cold, and the distorting effects of light changes. That reality can significantly reduce the accuracy and reliability of a device not designed specifically for the outdoors.
Take it outside: a sensor-based solution for retailers with outdoor spaces
Xovis has earned a reputation thanks to the exceptional accuracy of its AI-powered 3D sensors, which are equipped with adjustable data privacy settings that respond to changing perceptions. Our PC-series sensors are used by retailers globally to understand what is happening in their stores. The KPIs generated from this data are relied on for improving decision-making and managing resource planning and automation.
Our products are designed for many different industries and environments, including outdoor spaces important for customers and partners in retail, aviation, transportation and building management. Because so much relevant activity takes place beyond the four walls of the retail space, we have developed multiple sensors explicitly designed to withstand the elements and other issues related to outdoor operations.
For many big-box retailers, the outdoors is just as important as what happens indoors. The need for measuring performance in both spaces is equally relevant to meeting performance and revenue targets. Solutions with such capabilities tend to come into focus in the spring and summer months when customers move more freely outdoors. And now, with summer fast approaching, many retailers that have integrated indoor and outdoor analytics are already looking forward to the fruits of their strategies.
Tags: | retail | outdoor analytics | in-store analytics | KPI | customerflow | big-box retailers