Online retailers up until very recently have had a significant leg-up data-wise, simply because a customer’s very presence on their page offered up an intensely educational experience for retailers.
What do consumers look at? Where did they come from? How long did they linger and what did they end up buying? These are all questions which are easy to answer because the data was easy to collect, collate, analyze and build plans around.
It would be inaccurate to say that real world retailers aren’t as interested in data as their etailing counterparts, Euclid Analytics CEO Brent Franson told PYMNTS in a recent conversation. It’s just that, until recently, retailers were somewhat limited in the types of data they could gather.
“For decades, as a retailer, I am looking at data I have easily. That is normally going to come down to a door count and the cash register data,” he noted.
The game changer has been smartphones, which in a very short time have gone from a product for tech enthusiasts into being just a standard part of the operating equipment for most adults in the developed world. And because smartphones are so prevalent, Franson noted, Euclid has an opportunity to build Google analytics for physical retail — something that even five years ago might have sounded a little crazy.
“With the proliferation of smartphones and Wi-Fi, we are creating an environment where we can actually build a data set that tells retailers how people are interacting with the real world. Smartphones are constantly probing for Wi-Fi. As part of that probe request, they are sending a unique IP address called a Mac address and the existing Wi-Fi structure captures that Mac address.”
But that’s just the start.
The Euclid platform ties in with existing Wi-Fi (the firm has agreements with most of the major Wi-Fi OEMs) and uses it to beam a data feed with all of those smartphone/Wi-Fi interactions back to Euclid’s backend.
“We process that and produce a dashboard. That data — all aggregated, all anonymous — doesn’t tell us who people are, just what they did,” Franson explained. “We tell our customers how many people walked by [their store], how may people ended up entering the store, how long they stayed and where in the building they went, if the store is large enough."
All of those data points picked up through the location software function as nice analogs to the conversions, bounce rates, unique users and time-on-site analytics data that online retailers regularly have access to. But then Euclid’s ability to build that analog experience should come as no surprise since one of the firm’s co-founders is Scott Crosby. Though that name might not ring a bell — the product he helped create, Google Analytics, is probably intensely familiar to you.
But Euclid’s goal is to do more for its partners than just help them gather the same type of data insights their online counterparts have.
“If we are looking at the complexity of the problem we’re solving, it is obvious that it is our job to take that data set and turn it into something meaningful and actionable for our customers.”
That is what Euclid’s EventIQ feature is about, Franson told PYMNTS. It takes the data from all of those streams that crop up when one of its retail partners does an “event” (a sale, promotion, celebrity appearance, new layout, etc.) and turns it into a concrete set of observations and actionable insights.
“We need to take something very complex and make it into something very simple so that our customers can make fast bottom line decisions because that is what they are looking for,” Franson noted. “This data is to drive sales and that is the insight retailers need.”
And that need is such that there is no one-size-fits-all answer for all retailers. The beauty of looking at diverse data sets, Franson noted, is noting how custom it often it is — not only from one store to another, but (for some of their larger partners) from one location to another.
“Some stores see sales most closely correlated with engagement rates — the percentage of people in the store show stays longer than 20 minutes. For other stores, the driving sales factor is conversion rate — the number of people who walk by who end up walking into the store. It really is all over the map — and often will change even within the same store.”
Today, over 500 retailers work with Euclid — and Franson reports their size varies from ultra-tiny SMBs to large retailers with hundreds of locations. The world his firm operates in today is very different from the one it launched in a mere five years ago.
“I think we didn’t expect it to move as quickly as it has. If we would have gone to investors in 2010 and said we have magic wand and then used it to reveal the smartphone penetration and Wi-Fi proliferation numbers we actually have today, the investors just wouldn’t have believed us. We wouldn’t have believed us.”
But today, Franson says, just about everyone is a true believer when it comes to smartphones — and from that, a whole new belief set has emerged among retailers: a sudden upswing in wanting to get in on the data party.
“Retailers are getting more focused on using data to drive their business. When we started, we were working the really early adopters — this was not the general market. Now this is very much the norm; retailers expect to have and use data to understand consumer behavior and set processes.”
Those processes, he said, will vary and will in fact become even more specialized with more data available. But it will also allow physical retailers to really focus on their customer and really build out those personalized experiences that are increasingly becoming the cost of doing business in a marketplace.
“I think we have been surprised by how quickly retailers have jumped on the data-driven decision model,” Franson said.