Retail analytics has become a particularly popular topic recently. J.C. Penney, for example, noted that it was working on the “Science of Retailing,” which is to include a focus on data analytics. Research firm Gartner has predicted that, by 2019, 90 percent of large organizations will have a chief data officer. Fueling this movement are findings, for example, that firms that invest in big data and analytics outperform their competitors by 5 percent in productivity and 6 percent in profitability.
The study of retail analytics can encompass nearly every aspect of a retail business. From merchandising to HR, and supply chain to marketing, there are many areas subject to study and improvement. At the Retail Analytics Council, for example, we are investigating, among other things: the return from, and additional applications of, item-level RFID data; understanding how online behavior impacts in-store purchases; and looking at social data to determine demand and trend forecasts.
One area that we have not noticed being explored is how analytics and digital signage will play together. The concept of messaging that reflects demographics to promote targeted merchandise is not new. The extent to which this is actually being implemented is another matter entirely.
An emerging area worth further exploration is related to the increased use of IoT technologies by retailers. This is because the future of digital signage messaging may lie in better integration of customer activity data. On this point, Richard Ventura, Vice President of Business Development and Solutions for NEC Display Solutions notes that “other technologies such as biometrics, RFID and touchscreen technologies, combined with analytics, help retailers provide more personalized content to better engage customers, and increases the likelihood of a purchase or a repeat visit.”
According to a Tata Consultancy Services Global Trend study, 50 percent of retailers are using IoT technologies to monitor customer data via mobile apps, and 27.9 percent are using it to track data via sensors in physical locations such as stores. While I think these numbers are a bit inflated, the ability to track customer and product movement within a store is becoming more prevalent.
For example, Wi-Fi that tracks a consumer’s location within a store can trigger specific messages. To the extent that other data can be incorporated, such as merchandise that is in their shopping cart (as identified by item-level RFID), that message can become more personalized. If that same customer can be identified more specifically (having opted in to a Wi-Fi network or app), even more personalized information can be delivered. This can include, for example, predictive analytics that consider the customer’s prior purchases (via POS and loyalty card data). On the operational side, RFID can identify milk that is nearing its expiration date, leading to its promotion on a nearby digital screen.
According to Stuart Armstrong, Group President & Chief Revenue Officer at ComQi, “retailers are using ‘things’ to listen to the environment and to speak back to their shoppers and staff. In-store engagement technologies, such as digital signage, are offering a way to deliver the right message at the right time to the shopper. In other words, relevant messages, which drive sales and operational efficiencies.”
The ROI related to technologies such as iBeacons, which present only marketing functionality, is difficult to prove. Digital signs, on the other hand, have many useful functions. Making them smarter by the intelligent integration of data can only enhance their value to a retailer.
Copyright © Platt Retail Institute LLC 2016, and reprinted with permission. Visit plattretailinstitute.org for additional resources related to retail technologies and research.
 See: “Big data: The management revolution,” Harvard Business Review, October 2012, and “Making advanced analytics work for you,” Harvard Business Review, October 2012.