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From Clicks to Bricks: Online Retailers are leading an Analytical Revolution in Brick and Mortar
While Amazon and eBay get a lot of attention for truly disrupting brick and mortar retail, especially when it comes to pricing and delivery, smaller eCommerce companies such as Warby Parker, Bonobos and Blank Label may be the next big physical retail disruptors with in-store analytics.
While analytics have made some headway in brick and mortar retail over the last decade, the primary method for retailers to obtain store floor data for analyzing has been through video solutions. That method has proven to be costly and a heavy burden on bandwidth.
Armed with their successful ability to track and analyze how shoppers visit, browse and checkout at their online stores, “click to brick” retailers like Warby Parker and Bonobos are taking a different approach with in-store analytics. Schooled in A/B tests and tracking customers through their sales funnels, they’re now focused on maximizing revenue per square foot, optimizing foot traffic and converting online browsing into in-store buying. And they're using new tools.
It’s a massive opportunity; with 90% of retail sales still occurring in brick and mortar stores. Furthermore, in-store analytics can provide major bottom line benefits. For instance, a retailer can adjust staffing on the fly based on store traffic patterns and the time of day with the most shoppers in-store. Store floor layouts can be optimized based on top selling merchandize and in-store displays can be analyzed based on what signs are actually driving shoppers to pick-up merchandise.
Based on these benefits, and the barrier to entry of in-store analytics being lowered by smartphone adoption and innovative new technologies (less cumbersome than video), traditional retailers are getting into a new age of analytics as well. Nordstroms, Bloomingdale’s, Macy’s and American Apparel (to name a few) have all experimented with analytics using different types of indoor location and analytics platforms.
They’ll need to keep experimenting to keep up with Warby Parker. The eyewear retailer is literally trying to replicate “the everything can be measured” philosophy from the Web in its showrooms. Sensors throughout these locations in New York City, Los Angeles and Boston measure the way shoppers browse store floors very similar to the way the retailer measures every bit of its online store. Yet, the biggest winners may be shoppers, who gain more entertaining, engaging and personalized retail experiences. And in a visit to Warby Parker, a photo booth to capture their enjoyment.