Optimizing the in-store retail experience using geomatics

White Paper

2

Optimizing the in-store retail experience

Despite all the data retailers can collect about their operations today, the figurative last mile — the brick-and-mortar store — is still a black box.

When shoppers go through the virtual doors of an online retailer, their every move can be tracked: which departments they visit, how they find a particular item, how long they look at it, whether they put it in the shopping cart, and more. But in a brick-and-mortar store, often the only thing that’s regularly tracked is what customers buy. Who really knows where shoppers linger, which displays catch their eye, or which products they pick up and then put back down?

The truth is, retailers struggle to understand the in-store shopping environment and their customers’ retail experience. Retailers can’t see, in real time and all the time, where customers go or what they do with the products as they shop. And without that information, retailers have a hard time optimizing in-store operations, nor can they add that information to the point-of-sale, logistics, supply chain and other data they collect, including online and mobile customer data.

Enter geomatics, the analytics and management of geospatial data. Geomatics is a powerful digital capability for tracking and analyzing a retailer’s brick-and-mortar space. Retailers can use geomatics to create a digital picture of a retail space that’s automatically updated to accurately portray customers’ experiences. By gathering in-store location-based metrics, retailers can leverage geomatics to better understand and improve their customers’ in-store experience.

Gathering this data involves using advanced presence technology such as lasers in the form of light detection and ranging (lidar) sensors, 3D facial sensors, long-range, low-power (LoRa) wireless systems for internet of things (IoT) applications, and Bluetooth tags with multisensor functionality and machine learning, along with more established technologies such as real-time location systems (RTLS), geofencing, WiFi tracking, RFID and IoT.

While a necessary and meaningful prerequisite, it isn’t enough to capture in-store presences and tracking data alone. When the data is combined with what customers are actually purchasing, retailers have access to the same kind of insights they get online. When analytics are applied, retailers have the information they need to fine-tune customer interactions and customer intimacy. They can optimize demand forecasts; improve product placement, floor plans and in-store design; and even adjust employee scheduling, tasks and placement.

Bring the excitement, interactivity and engagement of online commerce to the brick-and-mortar shopping experience with advanced technology including geomatics, lasers, facial sensors, location-enabled tracking and machine learning.

White Paper

Geomatics is the analytics and management of geospatial data. Geomatics is a powerful digital capability for tracking and analyzing a retailer’s brick-and-mortar space.

The end of brick-and-mortar? Hardly.

Online and mobile retail sales had a banner year in 2017. On Cyber Monday alone, online sales topped $6.5 billion,1 making it the biggest sales day ever for online and mobile sales in the United States. (Cyber Monday is the Monday after the Thanksgiving holiday.)

Brick-and-mortar retail’s performance, however, has been somewhat mixed. While retail sales overall are rising, and retailers continue to hone sales and marketing tactics and shift labor to bolster e-commerce and weather any downturns for in-store operations, thousands of stores closed their doors in 2017, a significant increase from the year before.2 But research also indicates that new brick-and-mortar stores are opening to counter the losses.3 And when one of the world’s biggest online retailers, Amazon, plunks down $13.7 billion to buy a major brick-and-mortar chain, Whole Foods, the message is clear: It’s way too soon to declare the end of the in-store experience. Traditional shopping is still central to modern commerce.

Retailers need to evolve their brick-and-mortar stores to create a more engaging and intimate shopping experience. The only way to do that is to take a more scientific approach. Retailers need to apply technology to uncover customer pain points, gaps in service, low inventory, overstocks, ineffective merchandising, disorganized or inefficient traffic flows, missed sales opportunities and more. Further, they need to facilitate seamless experiences that span the digital and physical realms. The crux is doing so with a customer-centric mind-set.

The art and science of in-store tracking

Much of the information captured in a store using geomatics is similar to what can be gathered online, with one major difference: When it comes to customers, in-store tracking should remain anonymous. Although today’s tech-savvy consumer is ready and willing to shop, bank and do much more online, most people still dislike it when companies collect data about them, especially when that data is sold or used to spam them. Even though nearly every U.S. adult carries a smartphone, most do not want their smart devices being used to track their every move.

Capturing customers’ in-store experience can be done easily without capturing any personally identifiable information. Why track the customer when you can track the shopping cart? Why not smart-enable the employees, and give them location-enabled tools and real-time intelligence? Why not track products so their movements can be captured and used to better understand which products are most interesting to customers, which ones get looked at but not bought, and more? Product tracking also makes inventory and audits more accurate and efficient.

Lidar is a remote sensing method that uses light in the form of a pulsed laser to measure ranges and generate precise, three-dimensional information. It is not a new technology. Scientists at the National Oceanic and Atmospheric Administration (NOAA), for example, have been using lidar for years to produce more accurate shoreline maps and make digital elevation models for use in geographic information systems and other applications. Lidar has become a key component in self-driving cars. As the technology continues to evolve and its price point drops, its use in retail and other applications will rise. Because the 3D images lidar creates do not provide any personally identifiable information, lidar is an ideal technology to map the interior of a store and track the movement of things, including people, within it.

1 “Cyber Monday Hits New Record at $6.6 Billion, The Largest Online Shopping Day in U.S. History,” Forbes.com, November 28, 2017. https://www.forbes.com/sites/jeanbaptiste/2017/11/28/report-cyber-monday-hits-new-record-at-6-6-billion-over-1-billion-more-than-2016/

2 According to retail think tank Fung Global Retail and Technology, more than 5,700 store closures were announced in 2017 by September 1, 2017. That’s a 181 percent increase over 2016. https://www.fungglobalretailtech.com/news/weekly-store-openings-closures-tracker-22-perfumania-files-bankruptcy-close-64-stores-macys-names-new-president/

3 “Retailers Opening Over 4,000 Stores in 2017, Debunking the Retail Apocalypse,” IHL Group, August 30, 2017. IHL’s research report estimates that retailers will open 4,080 more stores in 2017 than they are closing and plan to open over 5,500 more in 2018. http://www.ihlservices.com/news/analyst-corner/2017/08/retailers-opening-over-4000-stores-in-2017/ 3

White Paper

White Paper

4

4 “Walmart is developing a robot that identifies unhappy shoppers,” Business Insider, July 19, 2017. http://www.businessinsider.com/walmart-is-developing-a-robot-that-identifies-unhappy-shoppers-2017-7

How DXC Technology can help

Meeting the challenge of understanding changing consumers and satisfying their needs will require more than the individual efforts of retailers. To know customers intimately and provide the best possible shopping experience, whether in-store or online, retailers must understand shopping behaviors and deliver a shopping experience that delights and delivers for consumers.

To do this, retailers must reexamine and redevelop processes and systems that have existed for decades. It will require them to reimagine the in-store consumer experience as well as the retailer’s role in the value chain. A scalable and efficient analytics framework will be a foundational component to enable this new capability.

As the world’s leading independent, end-to-end IT services company, DXC Technology has developed solutions for clients in every function that touches the retail industry. DXC has both in-house and partner capabilities to address analytics issues for retailers. With a long history as a global systems integrator, we bring together the pieces to solve business problems. Our DNA is built on partnering and integrating the kinds of capabilities that retailers need.

Many retail operations already have closed-circuit television (CCTV) cameras installed for security purposes and for tracking how customers move through stores. WiFi hot spots strategically placed throughout a store can also capture customer movement by anonymously tracking the WiFi connectivity that’s often left activated on people’s smartphones. And as customers’ Bluetooth-enabled phones come close to shelves, displays or even products tagged with Bluetooth-enabled beacons, retailers can determine — also anonymously — how long a customer peruses that display or product. Pressure- and heat-sensitive tags on products can also be used to determine whether a product is picked up and how long it is held. That kind of information can tell a retailer that one jacket style got tried on dozens of times in a week, while another was never even taken off the rack.

Products tagged with RFID and Bluetooth also can provide critical inventory information. Employees carrying lightweight handhelds can more easily run inventories. Smart shelves can do so automatically. And if a customer can’t find a medium-size shirt in blue on the rack, a quick search on the handheld could reveal that the shirt is in the store but currently in a dressing room. Integrating the inventory data with point-of-sale (POS) systems and even supply chain and fulfillment information can also make it easier for employees to answer customers’ questions about product availability. Maybe there are no medium-size blue shirts in stock, but more will be arriving the next day.

Emerging technologies such as facial recognition can give employees cues about how customers are feeling as they shop. Walmart is reportedly experimenting with technology that uses video cameras to monitor customers’ facial expressions and movements as they stand in line to check out.4 If the system detects an unhappy customer, it can alert employees to report to a register.

OmniLocation: The bigger picture

Using customer and product tracking technologies to crack open the black box of customers’ in-store experiences can only go so far, of course. Retailers need analytics to make sense of all that data, and they need to correlate the in-store data with all

the other data they collect end-to-end, from supply chain information to fulfillment data to sales and pricing information — including online

and mobile operations.

Much has been praised about omnichannel — a multichannel approach that combines in-store, online, mobile and even

catalogs. Leading online retailer Amazon is aggressively pursuing an omnichannel strategy with its Whole

Foods acquisition; its ongoing purchases of warehouse space in urban areas so as to offer

same-day delivery of online and mobile purchases; and even its new clothing line

that includes Prime Wardrobe, which lets users try before they buy. Walmart, the

stalwart brick-and-mortar retailer, is ramping up its online presence with recent purchases of online properties such as Jet.com, online grocery ordering and pickup, and a new partnership with Google.

To deliver a consistent retail experience across digital and brick-and-mortar, retailers need services that track, measure, analyze and optimize their end-to-end operations, from the moment inventory is ordered to the minute a customer makes a purchase — whether that purchase is made in a store, online or with a mobile device.

Cloud-based omnilocation services can help retailers manage their entire operations, starting with real-time track-and-trace technologies to help monitor shipments, distribution and estimated time of arrivals (ETAs), so scheduling, workforce management and inventory planning can be more accurate. For example, if a retailer is alerted to delays or shipping issues as soon as they happen, decisions can be made to mitigate any fallout and rectify the situation. In-store geomatics give retailers real-time information about their shoppers’ experience in brick-and-mortar stores, and that information can be integrated with all the data culled from online and mobile operations.

Through data transformation and integration, APIs, machine interfaces and other tools, retailers can eliminate the typical silos that exist between point of sale, inventory, financial, logistics and merchandise planning systems that prevent enterprise views. With real-time analytics, retailers can accelerate the integration of these various data sources and better equip themselves to interpret the data and identify, prevent and fix inefficient processes as they are happening, rather than months down the road.

DXC OmniLocation® (see Figure 1) is an enterprise visibility product and services suite that delivers everything a retailer needs for logistics planning, monitoring, management and in-store geomatics. It includes system engineering, hardware, commercial off-the-shelf software, and hybrid cloud and managed services. The suite, which is platform neutral and technology inclusive, integrates cyber and real-world data to help retailers reduce risks, improve customer relationships and experiences, optimize sales and take advantage of opportunities.

Figure 1. DXC OmniLocation: Key differentiators

Complete geospatial visualization• No dependency on GIS or search vendor maps — better cost, security, flexible hosting, data privacy• Global transportation system metadata and monitoring• Mapping indoor to shelf level, outdoors from space to undersea, and underground — 2D and 3D• Supplier, shipment, inventory value, volume and status

Track, trace and trend data ingestion and transformation• Assets, vehicles, people and shipments• Location, performance, health, availability, fit for purpose• Real-time analytics with multichannel notification• Trace history, track behavior, predict trend

Active controls• Remote control of machines• Machine-to-machine autonomic controls• Planning and replanning logistics

Resource workflow planning and management• Business intelligence• Predictive analytics• Task, team, schedule, route optimization

Open and flexible architecture• Flexible hosting — SaaS, Managed, Bare Metal• Integration — Azure IoT, AWS IoT, IBM Bluemix• Common content and analytics stack

5

www.dxc.technology

Learn more at www.dxc.technology/analytics

White Paper

© 2018 DXC Technology Company. All rights reserved. MD_7685a-18. June 2020

Transforming the last mile in retail for the ultimate in-store experience

Retailers know more about their supply chain operations, logistics, inventory and customers than ever before. But there’s always opportunity for more insights, and new technologies are emerging to deliver. By digitally transforming retail operations with geomatics, retailers can automatically capture the information they need to better understand shopper experiences.

Knowing that, retailers can refine the store so it offers seamless interaction with customers and can dynamically adjust to customers’ needs, wants and expectations. By putting the right product in front of the right customer at the right time and creating a frictionless and more fulfilling shopping experience, brick-and-mortar retail will continue to play a vital role in the retail consumer’s path to purchase.

About the authors

Dr. Michael Boykin is the Americas’ industry chief technologist for the DXC Technology Consumer Packaged Goods and Retail business segments. Michael brings more than 25 years of information technology strategy and leadership experience. He collaborates with DXC clients, offering teams and technology partners to cultivate consumer and retail industry solutions and strategies to accelerate clients’ digital transformation agendas. michael.boykin@dxc.com

About DXC Technology

DXC Technology (NYSE: DXC) helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. With decades of driving innovation, the world’s largest companies trust DXC to deploy our enterprise technology stack to deliver new levels of performance, competitiveness and customer experiences. Learn more about the DXC story and our focus on people, customers and operational execution at www.dxc.technology.