Visual Merchandising’s Data Problem  

Visual merchandising is one of the ‘dark arts’ of retail. For the uninitiated, it’s the practice of designing visually appealing sales floors and store fixtures that attract customers and ultimately sell the products on display. It’s a subjective and artistic means of delivering a concrete KPI – sales.

One of the challenges of visual merchandising is data, experimentation & design is all well and good, but not if you have no way of knowing what does and doesn’t work. Sales data is always a good place to start, but there are so many other factors at play that it’s often unwise to attribute visual merchandising to an increase or decrease of sales to a single product. You have to go one step further…

What is Money Mapping? 

So, how do you measure the sales performance of a store based on its layout and design? 

First, you map out the sales floor with the exact location of products. Then you break the map of the store into ‘zones’, typically around certain fixtures, shelves and displays. These zones can consist of several different items, grouped by either category or style depending on the design of the store. 

You then collate the sales of every item in this zone and compare it to others in the same store. The result? An impression of shop floor sales broken down by areas of the store.  

This is called ‘Money Mapping’ and allows retailers to visualise and analyse which areas of a store are ‘hotspots’ and which are ‘cold’ in terms of sales. This gives an initial view of which areas and fixtures are selling products and which aren’t.

To account for other external influences on sales, best practise is to swap items between fixtures or observe a ‘money map’ over a long time, as collections and merchandise changes between seasons. This way, if the localised sales data remains relatively similar even after products have rotated, then it’s clear the design or locations of the fixture is having an impact.

What are the benefits of Money Mapping?

• Insight on consumer experience
• Provides valuable data for visual merchandisers
• Breaks down areas of sales floor by sales performance
• Can be used to optimise store layout
• Drives Sales
• Can compare Product Placement & Visual Merchandising
• Can be used to conduct A/B tests

This all sounds great, so why doesn’t every retailer and every store do this already? The simple answer – the process of matching the sales data to specific locations on the sales floor, manually for every item and every store, is logistically a big ask. This means, if this can be done at all by visual merchandisers, it can only be done in a small number of stores.

How does AI change money mapping?

So how can we solve this data problem for visual merchandisers and make ‘Money Mapping’ easier and more accessible for retailers?

The first issue is having an accurate map of a store which includes exactly where every single item is sold from. Traditionally this would have to be done manually, and then have the sales data of items cross-referenced with their location in a store.

The solution: Using RFID (Radio Frequency Identification) and AI localisation techniques, we can now create a map of a store as part of the daily or weekly stock count.

This is done by adding ‘reference’ RFID tags into the store. Small tags just like ones that go on products are placed on fixtures and walls in the store. Because these never move, we can use the signal strength (relative to the fixtures) from stock counts to map exactly where items are in the store and what items they are grouped with.

This location info is then integrated with data from point of sale to generate an automated Money Map of a store, as part of the regular reporting and analytics function of the store. This can be done for as many stores as desired. With the data collection automated, visual merchandisers can focus on using the data to optimise product placement and store design across stores.

With larger data sets to work with, this also opens up the potential for more detailed analysis and experimentation such as A/B testing product combinations and store layouts!

What’s the process for AI Money Mapping?

• Attach reference RFID tags to walls and fixtures within the store
• Perform regular RFID stock takes as normal
• Software uses machine learning to ‘map’ out item locations within the store
• Integrate point of sale data with RFID software
• Software produces ‘heat map’ of the store based on sales
• Visual merchandisers can use data to inform strategy and measure results

Conclusion

Visual merchandising is a subtle but valuable process for retailers. Done properly it has a huge impact on both sales, customer experience and brand image. The only problem with this is visual merchandisers often don’t have enough data to measure performance and identify where their attention is needed most. The data they can collect is either time consuming, expensive or inaccurate.

Artificial intelligence changes the game for visual merchandising. By utilising RFID tags and Machine Learning, it is possible to ‘map out’ the location of items in a store, and more importantly, the sales distribution of the shop floor. These ‘Money Maps’ tell visual merchandisers what areas of the sales floor are ‘hotspots’ for sales and which are underperforming. Using this data, they can then focus their attention on improving the design or layout of certain areas.

Additionally, with this data stores can look to leverage their sales hotspots either by prioritising the best locations for best-sellers, high-value items or items that are due to go out of season.

Either way, AI-enabled Money Mapping is another important evolution in retail data and analytics. Providing retailers with unprecedented insight into exactly what goes on in Brick and Mortar Stores.

Smart fitting rooms consist of an interactive touch-screen mirror connected to an RFID reader and a motion sensor. They sense when customers enter the fitting room, and sense what items they have brought in with them by reading their RFID tags. They then assist the customer throughout the fitting room process, giving them information on products and calling for assistance if required. In simple terms, they allow consumers to experience the same benefits they get from online shopping whilst in the fitting room, as well as let them request items be brought directly to them.

What does a Smart fitting room do?

• Detect movement and presence of a customer
• Identifies which item the customer brings to try on
• Displays additional product information
• Provides availability information to the consumer
• Shows product recommendations that would complement the currently selected style
• Provides additional services such as Call for Assistance or Call for different products / colors / sizes

Smart fitting rooms have existed in the fringes of the retail technology space for a number of years. The interactive mirrors certainly capture the imagination, but they’ve only really existed at trade shows and in concept stores rather than out in the wild. It’s fair to say the technology was in the category of interesting and fun but not really taken seriously. Fast forward to 2020, and we have just seen the first major commercial use of smart fitting rooms, in a truly digital, experience-first, award-winning store.

What makes up a Smart Fitting Room? 

• Framed Mirror
• RFID Reader & Antennas
• Motion Sensor
• Touchscreen Display
• Internet Connection
• A store that is using RFID item-level tagging

So, now is the time to start paying attention to Smart Fitting Rooms. But for those looking at the technology, either for the first time or with fresh interest now that solutions are live in the market, the business case might be a concern. In this article, we will break down exactly what a smart fitting can do, and what kind of value they offer for retailers, customers and retail profits.

Improving Customer Experience

As a customer-facing technology, we’ll start with the most obvious (yet qualitative) use of the smart fitting room – an improved customer experience.

Rather than taking this for granted, however, let’s dig into how, why and even if smart fitting rooms offer a better experience for customers. Having a mirror automatically detect and display item information is nice and will wow customers (at least to begin with) but doesn’t really add much more value than an interactive screen that can scan products barcodes or even a product QR code.

What sets smart fitting rooms apart from these solutions are the interactive options and how they support customers. This includes offering additional and related or ‘frequently bought together’ items, information on exactly what is available in the store (using the real-time stock view RFID provides) as well as being able to request items be brought directly to the fitting room. These options being built directly into the mirror that customers already use will both delight customers and make the fitting room experience more convenient.

How smart fitting rooms benefit the customer:

• Shows different product combinations
• Makes product recommendations
• Article availability check
• Shows full range of articles to browse through
• Additional information, videos, social media integration
• Customer-friendly fitting (Article-Bring-Service)
• Enables digitally supported purchase decisions
• Direct reservation or ordering of articles
• Different delivery options (delivery to home address, from another store, etc.)

The economic value of customer experience:

Increase Sales

‘Customer experience is king’ has been a favourite tagline of innovative retail for some time. While it’s probably true and certainly sounds good, when it comes to the business case of new technologies you really do need to look at revenue. In terms of the customer, that generally means sales. So, what effect do smart fitting rooms have on sales? Other than more tenuous effects like bringing more customers in to the store, Smart fitting rooms increase retail sales in two ways:

Combating Lost Sales

Fitting room conversions is a self-explanatory if unfamiliar term for brick and mortar stores. That’s because as a KPI retailers have never had any way to measure or track this (more on this later). But fitting rooms are absolutely pivotal to apparel sales.

According to The Retail Doctor, shoppers who use dressing rooms are 70% more likely to buy versus those who don’t. It’s easy to see why, as customers have already decided that they like the item and want to purchase it, so fitting rooms become a question of making sure, and finding the right size.

It’s finding the correct size where most fitting rooms sales are lost. If a customer needs a different size, they will have to leave the fitting room and come back. Studies prove that this can have a major impact on sales, as 50% and 21% of people say they will sometimes and every time respectively leave the fitting room and the store if they were looking for assistance to change colour or size of an item and can’t find anyone.

This is why helpful fitting rooms assistants have such a big impact on sales, customers who receive assistance in fitting rooms make twice as many purchases as those who don’t. Smart fitting rooms address this issue, showing customers what other sizes are available and letting them request different sizes be brought directly to them. This allows stores to have assistance on hand (they are notified via a mobile application) without needing a permanent fitting rooms assistant, which is not feasible for many stores.

Increasing basket size with in-store cross-selling

The other sales driver of smart fitting rooms is having product recommendations made based on the items brought into the fitting room. This brings cross-selling common in e-commerce to the brick and mortar experience. Whilst these can be done as an endless aisle (so the entire product range of a store) the better way is to only offer items that are available in the store (using the stock visibility RFID provides). Much like requesting additional sizes, customers can request to have items that catch their eye brought directly to them. This can drive sales significantly and has been seen to increase fitting rooms basket size by 100% in initial studies.

New Data and Insights For Stores

The lesser-known use case of smart fitting rooms is the data and insight provided about the customer experience. It’s often said that compared to e-commerce, retailers have next to no data about what actually happens inside their stores. Other than what gets sold, they’re blind. In an industry as competitive and fast-moving as retail, this lack of analytics can be fatal.

We’ve already established how important fitting rooms are to apparel sales, so it seems that collecting and analysing data from them is a no-brainer. Traditionally however this hasn’t been the case, but with RFID and smart fitting rooms, retailers can collect that data in a non-invasive way.

What kind of insights are provided by smart fitting rooms? 

• Item Conversion rate – How often are items selling (or not selling) immediately after being tried on in a fitting room?
• Fitting baskets vs shopping baskets – Most tried on vs most sold
• Number of items per session
• Session duration
• Recommendation conversion rate – How often are items recommended, requested and then sold?
• Need assistance use – How often are staff called to the fitting room using the mirror?
• Staff response time – How long does it take for store staff to react to customer requests? (gaining actionable insight to customer experience)

Conclusion

Consider the context of interactive displays, AR, VR and even RFID tables. Smart fitting rooms are both a part of this space and completely apart from it. This is because fitting rooms aren’t new, they are and always will be a part of the apparel shopping experience. Rather than adding a new element to the shopping experience like VR for example, smart fitting rooms are improving an integral (and for many, unpleasant) part of the customer experience.

In other words – it’s an evolution, not a revolution.

Whether retailers embrace this evolution will be decided in the coming years, now that smart fitting rooms are finally out in the wild. Perhaps even more crucially, especially when talking about business case, now smart fitting rooms are out in the market we will begin to see data and results that will prove the value once and for all. As early innovators of the technology, we can’t wait.

Radio frequency identification (RFID) has become established as a dominant force in the apparel industry, with the technology finally approaching mass adoption after years of threatening to.

The technology involves tags or “labels” that emit a small radio frequency, allowing radio stock counts that are both highly accurate and incredibly fast compared to traditional methods. The result of this is a very up to date, or even real-time, view of stock. The main use cases responsible for the technology’s success include the increased process efficiency, superior inventory management and the enablement of seamless omnichannel services.

That’s the story of RFID in apparel, but what about other retail industries? After years of technical roadblocks that have kept the technology out of other markets, the technology has matured to a point where new industries are RFID-viable for the first time ever. The beauty and cosmetics industry is beginning to take notice of RFID, and perhaps now food retailers should do the same.

Why? Because modern RFID is so well positioned to tackle the food industry’s unique challenges, like optimising inventory, minimising food waste and increasing the traceability of the supply chain.

Whilst this sounds great, the limitations of the technology that we mentioned earlier have historically meant RFID just wasn’t viable for the food market. As well as liquid and metallic products traditionally interfering with the RFID signals, the food industry’s drastically lower average article price compared to the apparel industry were significant roadblocks. But this changing…

Mature RFID technology is ready to take on the food industry

RFID is reaching a level of maturity that means the previous barriers to entry for the food industry are starting to disappear:

• The price of individual RFID tags has fallen significantly, making it viable for more and more food products.
• RFID tags have become smaller – so it’s now possible to label even the smallest items.
• More advanced tags now exist that work on metal and liquid products
• Durable tags that survive high and low temperatures and even microwaves are now available, meaning all kinds of food packaging can be tagged with RFID.

Because of these changes we are already seeing the first steps of RFID breaking into the food industry, with RFID-giant Avery Dennison beginning to operate in the market and last year the first-ever blockchain beef shipment taking place using RFID tagging, providing a potentially industry-changing level of traceability and assurance only possible through RFID.

Superior inventory management for efficient operations.

The first major use case for RFID in the food industry is one already tried and tested in apparel – superior inventory management. Replacing manual stock-keeping methods with fast and highly accurate RFID processes gives retailers a reliable and up-to-date view of their entire stock. Whilst having a clear view of store inventory is highly beneficial for any retail business but for the food industry, where items have to be managed and monitored much more intensely, an RFID system could cut shelf life labour costs by up to 50%. Another major impact of the 99% stock accuracy RFID provides is the reduction in inventory sizes due to not needing extra ‘safety stock’, this could have a major economic effect for food retailers and would also stop inventory shrinkage from expiry dates. Leading us to our next major use for RFID in food retail:

Reducing Food Waste

Food waste is a massive problem. Every year in the UK alone 18 million tonnes of food end up in landfill, Around 1/3 from producers/ supply chain, 1/3 from retail and 1/3 from households. Not only is this an environmental and ethical issue, but for the food industry itself, this sees huge amounts of capital literally wasting away.

When it comes to retail, fresh produce and waste due to shelf-life is a unique issue to the food industry, but one RFID (and an effective RFID platform) is well suited to manage. Expiry dates result in a huge amount of food waste in the commercial sector and are also very labour intensive to manage on the shop floor.

So how might RFID solve this problem? The benefits that the accurate and item-level view of stock RFID provides has been well documented in the apparel sector, but with the food industry, this real-time view of stock will be even more valuable. An Internet of Things platform (giving individual physical objects a unique digital identity) designed specifically for use with food products would not only be able to monitor and maintain stock levels on shelves but could monitor the expiry date of individual products, alerting staff when items are nearing expiry or need to be marked down.

A fully Visible and Transparent Supply Chain – for consumer satisfaction and better handling of product recalls.

The final major use case of RFID  for the food industry is the traceability of products through the supply chain. Whilst other retail industries get value out of this in terms of warehouse efficiency and smooth operations between distribution centres and stores, the food industry is an industry where traceability of products is a major concern, for consumers just as much as retailers. People are increasingly concerned with where their food comes from, and suppliers and retailers could look to take advantage of RFID traceability and even utilise new blockchain methods alongside this to offer their customers assurances and gain the trust of consumers. We are already in the very early stages of this having already seen the first blockchain beef shipment take place, giving consumers 100% traceability and visibility of where their produce comes from.

On the other end of the food traceability issue is food recalls. Product recalls are an unfortunately common problem in the food industry, costing the industry an estimated $55.5 billion a year. A recent example of this being the major recall of humous products across the UK due to salmonella. These have a huge impact on the industry, not only economically but also on brand reputation. RFID’s ability to accurately trace individual items across an entire supply chain could prove invaluable in such an event. Having complete accuracy would allow food suppliers to pinpoint exactly where the issue occurred and easily track where all other products from the compromised location were sent, allowing for fast and efficient recalls. This would also potentially reduce food wastage due to over-recall and increase consumer trust in the retailer.

Conclusion

So, the food industry has several challenges that RFID has been proven to solve and the technology has gotten to a point where it is viable among the much more diverse and complicated range of products. The only thing that may hold it back is the cost. Whilst the price of tags has dropped significantly, the price point for food products is far lower than in apparel.  This may prove a barrier for tagging some food items, at least initially. Fresh products like meat and fish (and potentially some fruit and veg) however have both a high enough price point and a limited shelf life meaning managing them with RFID could prove hugely beneficial. The food industry is a new frontier for RFID, and time will tell just how well it does in the market. But make no mistake, in the coming years we will see it attempted, and the success of the technology in the industry will be decided, one way or another.