Brick-and-mortar retailers are changing the shopping landscape. They’re using new technology to transform in-store experiences and take data-driven marketing to the next level to increase sales.
The premise of the solutions might be familiar to retailers, but the technology powering it today is privacy-first and more efficient and effective.
Essentially, the solutions let you understand purchase behaviours in-store, including customers’ shopping paths, which shelves they stop at, and how much they buy.
With that information, you can make data-driven decisions about how to optimise store layouts, product placements, and promotions to enhance the offline shopping experience and grow sales.
A new way to drive digital marketing and offline sales
Previously, retailers might’ve gathered information about customers’ in-store purchase behaviours using technology like Bluetooth beacons and Wi-Fi. But that came with significant drawbacks.
For one thing, it raised privacy concerns because the hardware was usually hidden in store and used by retailers without first gaining consent from customers. Also, the accuracy and types of data provided by Bluetooth beacons were limited by their transmission ranges and placements.
New privacy-first solutions give retailers a more reliable way of understanding customers’ purchase behaviours in store.
One such service provider, Oriient, offers privacy-first software that relies on sensors in the smartphones of consenting users and the earth’s magnetic field to help retailers understand how shoppers behave in-store.
Not only will that save you money from having to install hardware like Bluetooth beacons, AI-powered cameras, or Wi-Fi in your retail stores, it’ll also save you time and accuracy. The information provided by Oriient’s software, Oriient IndoorGPS, is accurate within the range of 1m, and there is no time lag for the collection of data.
Cainz’s experiment shows a potential 6% rise in store sales
Cainz Corporation, which has some 240 home improvement stores in Japan, was keen to supercharge its in-store sales through data-driven marketing. So it collaborated with Google and Oriient on an experiment in Feb. 2024 to better understand the in-store purchase behaviour of its customers.
Cainz was already using Google Cloud for its data infrastructure, and partnering with Oriient, a Google Cloud partner, made the collaboration seamless. In the experiment, shoppers were provided the Oriient IndoorGPS demo app, which included features that offered additional in-store shopping experiences.
Across the nine-day test, 163 shoppers were approached at random to take part in the in-store experiment.
All participants carried a smartphone with the app while they shopped in-store but only those in the test group could use the features in the app. The app gathered navigational information and app usage data, but not personally identifiable information, from the participants who’d given consent.
Following the experiment, the average time spent shopping and the average purchase amount of the test and control groups were analysed across the same periods of time. The results showed that customers with access to additional in-store shopping experiences via features in the app spent more time and money in-store on average.
Specifically, during the peak hours of 9 a.m. to 4 p.m. on a weekend, the average length of stay for the test group was 39% higher than the control group. The sample size of 35 people might’ve been small but the result is statistically significant because the p-value is 0.05, meaning that out of 100 instances, a lift in length of stay would be observed 95 times.1
The impact of Cainz’s experiment on customer behaviour and sales
As for the average purchase amount during the same period, it was 223% higher for the test group than the control group, with the p-value being a reasonable 0.13.
When the above results — taking into consideration the participants’ surveyed response about their intention of using the app — were multiplied by sales during peak times, the impact of the experiment on raising overall store sales was estimated to be around 6%. That’s a remarkable achievement in the retail industry.
Cainz is also able to use information on how much time shoppers spent in an area of the store to make data-driven decisions on how its store layout and product display are optimised for sales. Now, it’s thinking of going beyond experimentation to implementing Oriient IndoorGPS.
Drive virtuous circles of sales and data to fuel growth
Indeed, with a privacy-first solution that lets you efficiently and effectively understand customer purchase behaviour in-store, you can better make data-driven decisions for business growth.
For instance, understanding your customers’ in-store purchase behaviour lets you manage your inventory more efficiently and be more accurate in forecasting demand. In turn, the unit price per customer and your profit margins go up.
The virtuous circle of retail sales and consented first-party data
Also, when you know how traffic flows in your store, you can better optimise it and place popular products in areas with high footfall. Additionally, you can use the customer insights to strengthen your marketing campaigns and create new shopping experiences to boost sales.
As you continue to do the above, not only do you create a virtuous circle of sales, you also grow your base of customers and data, and are able to make data-driven decisions that fuel continuous growth.
In the ever-changing retail landscape, you can choose to stay ahead as a brick-and-mortar retailer that writes the future of shopping. Use innovative, privacy-first solutions that help you better understand your customer’s purchase behaviour in-store and make data-driven marketing decisions that boost sales.
Contributors: Ryohei Muto, Senior Account Executive; Minh Nguyen Senior Marketing Research Manager, APAC Consumer & Market Insights
