How stores track your shopping behavior | Ray Burke | TEDxIndianapolis

thank you very much I'm delighted to be here today well I wanted to share with you a little bit about my background and in my interest in watching shoppers okay so to understand my fascination with this we need to go back to my first job which was a Cardinal camera store so I was hired as a salesperson when I was 16 years old and this was my dream job because I loved photography and I really enjoyed interacting with with people but I discovered that the salespeople in this store worked on Commission and it actually turned out to be very competitive so we'd stand at these glass counters and customers would pull up in front of the store and they'd walk in and we try to size them up and see you know who are the big spenders and you know you get different types of shoppers who come in so one type of customer they were just there to browse and it didn't matter how much time you spent with them or how many cameras you showed them if they're going to buy anything they were going to go to the discount store that was down the street other people would come in and they were there just to pick up some film or some photo processing but there was a third group of shoppers and they had bigger plans in mind they may have had a wedding that was coming up or a vacation or a birthday party I remember one occasion where we're standing there and this old truck this pickup truck pulls up in front of the store and the back was filled with junk and and this guy gets out and he comes into the store and it looks like he hadn't showered in a week and the other salespeople they scattered so but I saw when he came into the store that he was walking with intention and his eyes went to a display case that had some of the nice cameras and we struck up a conversation and I learned that his wife was expecting their first child and they wanted to get some really nice pictures and they've been saving up for this and so we looked at some different equipment and he ended up getting some nice nice gear so I learned from this experience the value and watching shoppers now I still watch shoppers today but I have more sophisticated tools for example at the Kelly schools customer interface lab we have tools that allow us to simulate the shopping experience in some cases we actually build out part of a store with shelf fixtures and checkout lanes and we use eye tracking technology in others we use virtual reality simulations to recreate the appearance of the store so for example we've simulated mass retail stores and grocery stores specialty retail stores so this is an example of a gourmet food and wine shop now the advantage of the lab is you've got a lot of control a lot of flexibility but in some cases we actually have to go into the stores bring the lab into the store to study shoppers in their natural environment now we will in some cases use you know you go into the stores and see the security cameras that are used for property loss prevention we've we've used the data collected from those cameras we've also looked at the shopper behavior using our own cameras in the store that use 3d imaging so we can measure not just where the shopper is standing but there their skeleton position where they're reaching where their head is facing their facial expressions and we have software that automates the coding of this and is able to capture this information anonymously now occasionally you'll read stories about this kind of tracking and in the Wall Street Journal or the New York Times and they tend to have headlines like big brother is watching us or spying in the aisles and so they have a very negative tongue so you might ask you know Ray why do you spend so much time and energy watching shoppers especially when there are these legitimate concerns about consumer privacy and the reason is because I believe that through these insights you can improve the customer experience you can increase customer satisfaction and increase business performance so how do we do this well if we watch what people buy we can infer what their needs and desires are and even anticipate what those needs will be in the future if we watch shoppers we can see the points of engagement in the shopping process and that in the points of friction the obstacles to purchase and then we can modify the experience and improve the shopping experience and observe shoppers behavior so our goal here is to optimize the shop ability of the store let me give you an example from some research that we've done with Marsh supermarkets no Marsh is right here in Indianapolis and they've actually been very innovative in their use of technology forty years ago Marsh was the first retailer to use the UPC scanners so you know when you go into the store and you checkout now originally they use those to improve operational efficiency at checkout but that information is captured it provides a rich source of consumer research so let's take a look at a receipt from a shopper what can you learn just by watching what people purchase well this shopper they picked up some sliced turkey this is just a few weeks ago some roma tomatoes and some peaches okay well because this person uses a customer loyalty card and most shoppers do we can track their purchases over time so again we're back in Marsh a week later and what's this person buying some sliced turkey some peaches and some roma tomatoes okay so if we want to build the loyalty if we want to reward this shopper for their loyalty we can send them we know their contact information we have their information from the loyalty program we can send them a mailer for peaches we know they like that maybe send them some coupons even give them a recipe it turns out that about 85% of what you buy is basically the same from one week to the next but we can learn more than just people's preferences for individual products so now let's go to que aquella kook Iowa and this is a shopper who visited a Walmart and they picked up some Diet Pepsi an Atkins bar and some slimfast okay so it looks like someone's counting calories here okay but you wonder why they're also buying Cheetos and ice cream and popsicles okay maybe they have got kids in the in the family okay well if you look just a few days later they're back and Walmart again and they're buying major league baseball cards so it does look maybe that like they have a child at least one child in the house and they're buying dog treats okay so it looks like they might have a dog as well a few days later they're back in the store and they're getting some fishing hooks so they like to fish and they're buying marine oil so they actually have a boat so as you look across these transactions you start get a picture of the household the profile of the shopper the DNA that's going to drive their purchases in the in the future now it's not enough just to know what people's needs and desires are we also need to understand how that interacts with the store environment so we've done research where we approach shoppers and ask them to wear a special pair of glasses that have a little camera and and it tracks where they're looking as they walk through the store so what opportu they go through well it looks like they're on roller skates right I mean this is the actual speed that the shopper goes through they have certain products in mind they see what they're looking for grab it boom they're on to the next product category okay so what a shoppers actually see as they navigate through the store well they tend to scan horizontally about four feet off the floor so this is a heat map that shows the concentration of visual attention they notice special displays so like a two-for-one promotion for potatoes or in aisle displays they're they spend two to four times the amount of time looking at these than the surrounding products so the store environment has an influence but also their goals have a powerful influence on their visual attention so let's say that you're in the store you're not actually shopping for produce on this visit you tend to look towards the center of the display on the other hand if you're shopping for Tomatoes this is what you say or if you're strolling past the bakery and you're not shopping for donuts this is what you see if you're shopping for donuts it's like the whole display case lights up alright so how can we help shoppers to find what they're looking for in the store to connect what's in their mind with what's physically available so we've done these simulation studies where we manipulate the Shelf displays and measure the amount of time it takes for shoppers to find the products so let's say that you're looking for frosted Cheerios and you just have the name frosted Cheerios in mind takes you about nine point four seconds to find the product on the shelf on the other hand if you have a picture of the product in mind only takes 2.5 seconds to locate the product or let's say that we pick a different product this is Golden Grahams now if you have a picture the product of mine takes you about 5.7 seconds to find the product but there are other products on the shelf with a similar appearance Cheerios are also in a gold package shredded we what if we ask you to find a product that's more distinctive like Apple Jacks in the green package only takes you 1.1 seconds to find it now one of the tools that the retailer has to help you to find products is the number of shelf facings how much space they allocate to products on the shelf if we look at post bran flakes with two facings two packages that are visible it takes about three point three seconds to find the product if we expand the amount of space that's allocated to this product its reduced to two point one seconds even how straight the shelves are in the store influences the shoppers ability to find things so you know you go into the store it's a Saturday afternoon and things look really picked over if you're looking for Golden Grahams in this situation takes about 8.2 seconds to find the product but just by straightening the shelves we're able to reduce that to 5.7 seconds so again there's some simple things that retailers can do to help you to find what you're looking for in the store now let me take you to a different context which is apparel shopping and show how we can apply some of these examples the retailer that I worked with on this project they allocated about half of their floor space in the store to men's products but only 30% of their customers were men and only about 20% of their sails where the men's merchandise and we observe shoppers we actually put a special panoramic camera in the ceiling of the store that could and wrote some software to track people and so here's what men would do when they'd walk into this store they would walk through the entrance and they go to this lead fixture that's where a lot of the new products were shown in the store and then they would walk to the very back of the store so what's in the back of the store the sale the clearance right stuff right and then if they didn't find something that they liked they'd walk out so how do we connect with shoppers in the center part of the store well we did a couple of things one is we looked at the sales data again to try to understand what consumers needs are and we looked at the products that men were buying it and the outfits that they were putting together because men struggled to put together outfits and we created this what we called a style center but the other insight that we had was as we watched men shop they would sometimes they would pick up a product and then they would try to fold it and put it back on the shelf and they couldn't fold it the right way and that discouraged them from picking things up so what we did was instead of doing the normal crease fold we just took the product folded in half put it on the shelf those two changes caused an 85 percent increase in product touch and a 40% increase in sales now I haven't changed the assortment I haven't changed the prices all I've done is do a better job of connecting what the shopper has in their mind with what's physically available in the store now if we want to see where the future of retailing is going I think we can look at how innovative retailers are using these insights today to improve the customer experience we did a project a couple of years ago with the retail industry leaders Association and looked at some best practices one of the things that we need to do is provide effective navigational aids if customers don't see the product and can't find the product then essentially it's not for sale so or Shawn in France uses simple color-coded maps that you can read the time it takes you to take the escalator up to the store entrance in this boots pharmacy there's no question about where to pay for the merchandise right now you know you laugh at the size of the sign but people's visual acuity is is decreasing as we have an aging population and we need to show the product the product is the goal object it's what draws the customer into the store it's what energizes the shopping experience so I'm not a big fan of cauliflower or broccoli but I salivate when I look at this display at Central Market in Plano Texas another example comes from Disney this is the once upon a toy store in in Orlando so they have these little figurines that are in cellophane packaging all they did was they unwrapped the package and put example figurines in this Plexiglas display case their sales went from 40 items a week to 900 items a week we also need to give consumers information that they need to make their purchases now when I'm buying avocados I don't need to know a lot right I just is it ripe or not so super-clean provides with us with this information new products are the lifeblood of retailing they keep customers coming back they bring customers into the store so so retailers need to showcase new items this comes from the the fashion show mall in Las Vegas and what they have is a runway it's motorized actually comes up out of the ground and three times a day they have fashion shows and the models are wearing the apparel from the retail stores in the mall and they're able to increase their sales by up to 30% just by showing the fashions on the runway so by using these insights to improve the shop ability the store I think it benefits everyone who's involved it benefits the manufacturers because shoppable stores clearly communicate the benefits and the value of the brands that are being sold it helps the retailer because it creates a convenient and enjoyable shopping experience that creates satisfied customers who loyal and come back and it enhances the experience for the consumer because they can find the products that they're looking for so what's where is the future going here well technology is going to continue to provide us with more detailed and comprehensive information about shoppers the companies have to recognize that this data is the property of consumers and the retail stores where they shop and should be used just for their mutual benefit and if they don't respect consumers privacy they're going to lose the trust of the shopper which is going to undermine the relationship which is the foundation for business success thank you very much you

Channel: TEDx Talks

Views: 434,191

Keywords: Data Science, English, tedx talks, Technology, United States, ted, TEDxTalks, ted x, ted talk, tedx, tedx talk, ted talks

Id: jeQ7C4JLpug

Length: 16min 15sec (975 seconds)

Published: Tue Nov 25 2014