Over the last years, retailers have been focusing on developing a strong online presence. In an increasingly digital world, that makes sense. These companies will definitely find a lot of customers through the internet. However, that doesn’t mean they can afford to neglect their physical stores.
Even when it might sound counterintuitive, retailers should still pay attention to their physical stores. That’s because, in North America, they still account for about 90% of all retail sales. And since it’s highly likely that percentage will still be high for some time, thinking on ways to improve the physical shopping experience is a must for retail companies.
Naturally, there are technologies that are already revolutionizing physical stores, mainly augmented and virtual realities. But there’s an up-and-coming trend that will most definitely make a splash across the retail industry. It’s called human mobility data.
What’s Human Mobility Data?
Take a minute and think about this: how much do you know about how the things around you are physically arranged? Surely you know why your home is organized but go beyond that. Why are streets, buildings, offices, and other things around the city arranged like they are? And what about the things inside those buildings? Why do certain supermarkets open in a seemingly random location? And why do they organize their aisles in the way they do?
You can have multiple answers to those questions. You could say that certain things are just random or due to aesthetic reasons. You could say that some are convenient. You could even say that some of them are carefully calculated. All of those answers would be right. But for the purposes of this article, let’s focus on that last possibility.
Companies (especially big ones) don’t open stores in random locations. Before doing so, they study the neighborhood of the potential location to see a number of things, from how many people live and work nearby to their habits when they walk down the street. They also check the available services, from electricity to transportation. They even scout the area to find other companies that can be competitors or potential allies.
All of that data is what ends defining whether a place is the right fit for a store or not. However, in recent years, how people move around the physical space and how they interact with the things they find in their ways has become crucial. The data resulting from the observance of those habits it’s what’s called human mobility data.
By understanding how people move in the real world, companies can better organize their stores, make them stand out in their blocks, be an almost obligatory stop on people’s way, and even make them more appealing to the specific people that walk down the store’s neighborhood. You can see why retailers are so interested in human mobility data right now.
How is Human Mobility Data Collected?
The rising interest in the field of human mobility data has an evident explanation. Thanks to the advance of numerous technologies, gathering data about people moving about the city is easier than it’s ever been. Of course, the key role in the collection process is played by our smartphones, through GPS and apps with enough permission to get the data in the first place.
Believe it or not, a lot of apps do this with your (mostly automatic) consent. Studies have shown that 45% of the most popular Android apps and 25% of the most popular iOS apps request location tracking. So, even when it seems like trailing the whereabouts of people as they move through the city is weird, chances are some of the apps you have on your smartphone are already doing it.
Naturally, the location of smartphones is just a piece of the puzzle. Cell tower data, Wi-Fi data such as logins in public networks and even purchase receipts are all being used to know how people move in their daily lives.
What’s more – whenever a person walks into a store, the number of potential sources for data doubles. Companies are using everything from video security streams and their own Wi-Fi hotspots to beacons and interaction with store systems such as POS hardware and kiosks. All of those sources converge into one database from which retailers can reconstruct a normal day in the mobility of an individual.
How Human Mobility Data Can be Used for Retail
Now to the fun part. You already know what human mobility data is and how companies gather it. But how do they end up using it? And to what purposes? Well, first and foremost it’s important to note that not all of the data coming from those sources is useful. That’s because the only information that’s truly relevant is the one that’s more precise and high-quality.
Since there are several sources at play, sifting through it all to find truly actionable insights can take a lot of effort. Fortunately, several companies are partnering with developers and outsourcing IT services to develop better analytical tools. They are mostly benefiting from Artificial Intelligence, whose algorithms are perfect to identify patterns and extract insights from large datasets.
The ultimate goal? To recreate how people move on a normal day and the role the retail physical spaces play in their lives. That’s because there’s more to just finding better ways to arrange the products throughout a market’s aisles. Human Mobility Data can help companies understand who’s buying in their stores, where they are coming from, how they move inside their spaces, where they go afterward and even if they visit the competing stores.
Unfortunately, that feels more like a somewhat distant goal today. Given how much human mobility data is useless and how difficult it is to come by and combine information from so many sources, retailers using this data today are employing it for a couple of purposes:
- Improving the in-store experience. Retailers can collect more detailed information about the people that visit their stores, as they have more possibilities to do so. With that data, they can find a lot of answers and opportunities for improvement. From learning when the peak times are, which are the most active aisles, and how quickly customers find the products to tracking people that don’t buy anything to see how they move about the store. Such information can help in a better arrangement of products and aisles, make for more effective communication, and even open up some chances of personalized interactions in specific micro-moments that only happen in store.
- Choosing the best location for a new store. As discussed above, companies use human mobility data to define which is the best place to open up a new store or office. Though sometimes the decision might seem obvious, the use of this data can show that there are some untapped opportunities waiting for the retailers to find about them. What’s more – human mobility data can even help in defining how a specific store can disrupt how people move and the chances of diverting business from the competitors to their own stores.
The Challenges Ahead
If you’ve read carefully, you already know that there’s a lot of work to be done for the retailing industry. Improving the quality of human mobility data is a must that can come from the further diversification of the sources or by enhancing the processes used to pick the information for strategizing. Additionally, retail analytic companies have to establish further alliances with developers and IT companies to put the insights they get into usable features in different systems.
There’s also the challenge of understanding how to build a person’s entire mobility throughout a day. This is the ultimate goal and can bring further uses for this data. It can help in the creation of shopping corridors, improve the selling prospects, and create a more rich experience for customers and non-customers alike. What’s more – it can all be integrated with government efforts in the same sense to further improve the lives of the citizens.
It will take a lot of effort, that’s for sure. However, all of it will greatly reward retailers. As the companies that have tried it can attest, human mobility data is a gold mine that can point towards new directions and suggest growth opportunities that would never make themselves evident in any other way.
Given that physical retail stores aren’t going anywhere any time soon, retailers should start paying some attention and integrating the “real world” with the digital one. Because, while the latter might be in everybody’s minds, the former still is the choice for millions of people every day.