LiDAR: What Do Your Customers Actually Do In Your Store?

After a chance meeting at this year’s Drapers Digital Festival, here’s why I think LiDAR is a retail solution worth taking a look at.

So, if you’re looking for new ways to demonstrate how your bricks-and-mortar are adding value, read on….

The Problem

Driving an improved Customer Experience (CX) is key for retailers.

With e-Commerce playing a key role in catering for customers’ developing and demanding buying habits, more than 66% of CEOs said they expect their companies to change business models within the next three years.

Justifying the cost of bricks-and-mortar is becoming paramount.

The role of the physical store has evolved. But the question still remains, what do your customers actually DO when they’re in the store? How do you measure what’s actually happening?

If you can’t monitor consumer behaviour, it’s impossible to know if your store is having the desired effect.

LiDAR: The Solution?

New technology called LiDAR (short for Light Detection And Ranging) from Hitachi is delivering real-world retail benefits (check out the in-store visitor movement video, above).

For example, it measures:

• Footfall Analysis - Counts customers not only entering and leaving the store, but also those walking past (key metric: conversion ratios).

• Queue Monitoring - Analyses customer queuing behaviour: how long does a payment queue have to be before a customer baulks? How long will customers wait before abandoning their purchase and reneging? (key metric: queue length vs. lost sales).

• Layout Analysis - How can you be sure that your store merchandising displays work properly? How can you monitor areas of use in your store? Do you have ‘hot’ and ‘cold’ areas? Where are they? Why? (key metric: space profitability per square metre)

• Dwell Time Analysis - Understand how long customers spend in certain areas and departments. Is promotional merchandising working efficiently? Are your categories grouped in an optimal way to maximise cross-sell? (key metric: customer dwell vs. spend)

Daphne Dutilleux, Retail Design and Visual Merchandising Director at L'Oréal Luxe, was kind enough to share her thoughts with us on the value of these metrics:

"At L'Oréal we already use footfall analysis to inform our store design strategies. Our ultimate goal is to focus less on the quantity of stores and more on quality, with only one till point, contactless or phone payments. So, I think we should focus on eliminating the queue, not making the queue more interesting - making queue monitoring less relevant. Layout analysis on the other hand is a great tool for large scale stores to find hot spots in-store and link to sales. Dwell time would let me know I'm doing my job correctly. For example, when I focus on creating experience doors, I could actively measure whether people dwell there for long enough."

LiDAR can also be combined with Beacon and Hyper Location Technologies to measure customer movements, store flow analysis, proximity marketing and theft prevention.

As Pierson Broome, Retail SME at Hitachi Consulting explains:

“We can help brands leverage data as a strategic asset to drive competitive differentiation, customer loyalty and growth. LiDAR is anonymous and 100% GDPR compliant with zero privacy implications. It's currently in live operation with numerous retailers in Asia, and ready to be deployed in EMEA.”

How are our Store Designers Using In-Store Digital Tech?

As Brendan Teer, Executive Director, Global Store Design at Jo Malone London explained:

"E-commerce retailers are at an advantage. They have multiple tools at their disposable to quantifiably understand what their consumers are looking for. Retailers of physical spaces need to work a lot harder to gain this same understanding. Products such as LiDAR are the offline equivalent of Google Analytics. They don't make assumptions, they provide formal metrics that allow in-store designers to review and understand more accurately what resonates with their consumers so they can develop a more personalised in-store experience; increasing dwell time, interaction and in turn reducing the risk of that potential loss of sale."

Daphne Dutilleux shares a similar view:

"Technology is booming and at this point we are experimenting with several tools. Retail is changing and no one tool has all the answers, but it's great that we're in a time of creation and trial."

In what new, innovative ways is your brand using digital technology? We’d love to hear from you.

Email us your thoughts.

Photo by Hitachi Consulting.