Sensor-based analytics to grow physical retail business
e-Commerce retailers have been benefitting from insightful analytics for years, whilst their physical counterparts have mostly had to rely on instinct, hunches and trial and error. Sensor technology now allows for these physical retailers to benefit from advanced analytics too — and Irish startup Measurence intends to tap into this huge market potential.
Even in the so-called digital era, 90 % of retail business still arises from physical stores. Measurence believes that its STOREHERO (An AI (Artificial Intelligence) Virtual Business Coach for Physical Retailers) project’s virtual coach —a smartphone app relying on sensors and third party data like door counters, POS or advertising tools APIs to gather useful information on customer behaviour and make business decisions accordingly — can capture this dormant market.
The benefits of STOREHERO technology are summed up in a single quote available on its website: ‘My store is near a concert hall, but I seldom noticed if there was an event because I was too busy. Now I get notified when that happens, I put a beer offer on the window, and I get a steady flow of customers in return: it works!’ Compiling a wide range of sources of data, STOREHERO can tell business owners all about how potential customers behave outside and inside their shop and when they do so. This, in turn, allows for more targeted and context-aware marketing.
The retailer gets notifications when interesting trends are observed, and can even chat with STOREHERO to get help for their business. Conscious of their app’s potential, Measurence is now using EU funding to estimate their growth potential for the next five years.
Why do you think physical retailers need a virtual business coach?
Elio Narciso: Despite the growth of e-commerce, 90 % of total retail sales are still generated by offline retailers.
An extensive amount of data is available for these retailers to make proper business decisions, but most of them still find it hard to make sense of all the available data and use that intelligence to drive their decision making. The bottom line is, they are sinking in data from POS systems, intranets, and internal transaction processes, but they can’t factor in all the new and complex analytical technologies that vendors have made available. In order to solve these problems, Measurence has developed and will soon be launching STOREHERO.
How does STOREHERO work exactly?
Measurence has developed a platform of internet-connected sensors that detect presence, location and activity of people within physical spaces.
We use this hyperlocal data to help retailers build a model that can monitor, predict and manage performance at any commercial physical location. We then connect our proprietary data to other data sources, like marketing data, campaigns, events, weather and point of sales data, and correlate all of this data in our machine learning platform.
In itself, STOREHERO is an AI-based app, a virtual business coach that helps store owners and operators grow their retail business. Thanks to the data collected through this variety of sources, along with the intelligence generated by our proprietary platform of interconnected and remotely-managed plug-and-play sensors, STOREHERO can send text messages and notifications with insights and recommendations on how to improve the retail business.
How far do these recommendations go? Does STOREHERO actually advise on types of promotions that could be successful?
STOREHERO has various features which can be grouped under three categories: descriptive analytics, predictive analytics and geospatial analytics.
Our descriptive analytics provide insights into past business events and their performance by analysing historical and real-time data on traffic (number of visits and unique visitors over a certain period of time), daily captured growth (as a percentage), loyalty (based on repeated visits, return rates, etc.), timing (the time when shoppers come the most often), and A/B testing of store windows (comparing storefront conversion in a certain timeframe). These also include benchmarking analysis to allow for comparisons of store performances, as well as trend analysis to know how much time people stay on an hourly, daily or weekly basis.
Then we have predictive and geospatial analytics. The first provide predictive models related to customers’ in-store behaviour, and the second provide in-store funnel, paths and heat maps to identify places customers visit the most within a store as well as track window conversions.
In other words, we can monitor, predict and manage performance at any commercial physical location. This can be: a franchise looking to better manage a new location; a bank that needs to better understand how to serve its customers in its various branches; a retailer aiming to increase his/her conversion rate; a property owner or manager wanting to provide tenants with better services; or even an airport aiming to better configure stores and traffic in order to optimise business and minimise movement time.
How has the app been received so far?
Measurence’s sensors platform has been available for the past two years and the company has been steadily gaining new clients and revenues. The platform is super easy to install, and our customer list includes prestigious brands like Mercedes.
STOREHERO right now is in a testing phase, and the SME Instrument Phase 1 grant aims to support us in the creation of our prototype and a feasibility study to investigate potential further developments within the next stage of funding. We are planning to apply for Phase 2 in June.
Why did you decide to seek EU funding?
In February 2016 we were chosen among the top 15 tech startups with a European presence, and we were given a grant of EUR 100 000 to join IMPACT, a startup accelerator supported by global brands. We graduated at the top of our class, and were selected as one of the best companies to implement Fiware. We are proud to say that we have built one of the most elegant Fiware solutions in Europe.
We loved the IMPACT programme, which is funded by the EU, so we decided to explore other ways to work with available EU funding programmes.
What have you learned from the feasibility study so far?
It’s a bit too soon for us to disclose information, but a lot of work is still ongoing, so check back with us in May and we will tell you more! What I can tell you is that Measurence and STOREHERO are the result of over two years of work focused on innovating in the area of data analytics for physical commerce. We already have paying customers and the need is only increasing.