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Does Intelligent Video Translate Increased ROI

Does Intelligent Video Translate into Increased ROI for Retailers?

James Talbot
Ionit Technologies
June 2010
www.ionitusa.com

It’s undisputed that organizations run better when employees have access to timely, actionable information. Understanding shopper behavior in stores is paramount to improving operations and increasing sales and profits. Video centric business intelligence systems correlate shopper behavior data from multiple systems and automatically deliver actionable reports to help hold companies to internal performance benchmarks. Use of video intelligence also allows for intra-store, inter-store and enterprise analysis with a few clicks of a mouse. Although early phase issues of reliability made initial buyers cautious, today’s systems are dependable, affordable and easy to implement.

Video analytics is sometimes viewed as a purchase add-on. However, it’s more than just the integration of traditional video surveillance systems with video analytics software. Today’s systems gather information from multiple sensors. When buying a system, retailers need to future proof by choosing one that is infinitely expandable and capable of incorporating multiple information gathering systems. As multiple departments will be accessing the video, choosing one with excellent video compression is important.

Video Centric Business Intelligence (VCBI) systems provide permanent, verifiable data for analyzing customers’ instore experience. It is cheaper, more reliable, and provides longer term data than surveys or simple compilations of merchandise purchase statistics. The systems gather information without altering the shopper’s environment. State of the art video analytics will correlate customer traffic counts with POS data, and multiple other sensors i.e. RFID, shelf monitoring system to report conversion rates per shopper (how many people are entering vs. how many people are actually buying) and by individual SKU. It can also be integrated with employee time card data to yield conversion rates per employee. The software uses facial detection and other video event “triggers” to measure shopper engagement throughout the store. Measurements also include engagement time at a particular display, product or category, and how long customers queue at registers, dwell in specific aisles…. Shopper traffic patterns, “heat maps” and advertisement correlations can be reported as well.

Most of this data is generated in automated reports which can be tailored to meet virtually any need. Management can use the information to optimize staffing levels, monitor marginally performing stores and determine the efficacy of product displays. In addition to the automated reports, a third party back-room staffed by relatively inexpensive labor can be performing customized studies wherein the actual behavior of clients can be monitored and demographic data noted.

The business advantage of video analytic applications is the creation of daily actionable data which allows managers at the store level through C level to make immediate operational and merchandising adjustments which translate into enhanced profitability. This means that video, once considered to be a cost center, now has the potential for creating an actual ROI for a company.

Retailer data also has value to your suppliers. Your data in the proper format can be sold thereby turning internal video into its own separate profit center. The sale of shopper-centric data to CPG’s is not a new business model as instore shopper analytic companies have flourished for decades. VCBI systems merely improve the existing model by significantly lowering the cost of data acquisition. It offers CPG’s lower cost, longer term, and census-wide data which is more accurate and verifiable. Actual video of shoppers adds greater depth to the studies without altering the shopper environment.

The first step to moving forward with VCBI solutions for any retailer is the identification of the stake holder(s). Multiple departments in your organization - loss, prevention, marketing, merchandising and store operations - will all benefit. Only 32% of IT projects actually get implemented. Early identification of the individuals in your organization with both foresight and the ability to execute new technologies and approaches is key to successful implementation.

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