Tag Archives: shopper measurement

The Really Short Introduction to DM1 and In-Store Measurement

Take a minute (okay – a minute and a half) to check out this video overview of our DM1 store measurement platform. It’s the shortest and crispest introduction we’ve produced so far.

As more than one famous writer/philosopher has remarked, “If I had more time, it would have been shorter.” Brevity, like wit, takes work. And practice. We haven’t achieved wit, but we’re getting close to brevity:

I also really like the video’s flow. It starts with a very short intro into the basic concept of store measurement and then introduces the platform with the Digital Planogram tool – the Configurator. When you get right down to it, this capability is the single most important part of the platform. Digital representations of the store are critical to every report and analysis DM1 delivers. And the ability to rapidly create, adjust and maintain those digital maps is essential to making the tool work.

When we first released DM1 the configurator lagged behind some of the reporting tools – not very friendly and a little prone to bugginess. Its grown into quite a good tool – a pleasure to use and capable of handling even very complex store layouts pretty easily.

From the configurator, the video flows into the Layout tool – which just maps metrics right onto those digital planograms. Not only does this show how effortlessly you move from a map of the store to a metric, but I really like the way the video works through a small set of metrics to show how easy the visual interpretation is.

Once you’ve got a feel for basic metrics in the Store Layout, the next logical step is to tackle journey. And the next two sections highlight funnel and path analysis. Both of these tools help transition thinking from a static view of store performance to a focus on shopper journey. Funnels tell you how effective the store is in moving shoppers down an engagement path. Path helps you understand which in-store paths are popular and which drive conversion. After this, it’s a quick look at the data exploration capabilities of the platform – and the ability to build reports around whatever problem you choose to tackle. Finally, it wraps up with a sample of the dashboards.

Truth to tell, I’ve sometimes done this same presentation in almost the reverse order – starting with Dashboards and ending with configuration. It’s plausible that way too, but I think this works better for analysts. Because while dashboards are the first view for end-users of DM1, for analysts their task really starts with store mapping, proceeds through various levels of analysis, and ends with wrapping a nice, neat bow around the data for others. That’s that way this video proceeds and that makes the structure more compelling and natural if that’s the way you tend to think.

Check it out.

 

Hey, unless you’re a very fast reader, you’ve already spent more time on this post than the you will on the video!

 

 

Machine Learning and Store Analytics

Not too long ago I spoke in Toronto at a Symposium focused on Machine Learning to describe what we’ve done and are trying to do with Machine Learning (ML) in our DM1 platform and with store analytics in general. Machine Learning is, in some respects, a fraught topic these days. When something is hard on the hype cycle, the tendency is to either believe it’s the answer to every problem or to dismiss the whole thing as an illusion. The first answer is never right. The second sometimes is. But ML isn’t an illusion – it’s a real capability with a fair number of appropriate applications. I want to cover – from our hands-on, practical perspective – where we’ve used ML, why we used ML and show a case-study of some of the results.

 

Just what is Machine Learning?

In its most parochial form, ML is really nothing more than a set of (fairly mature) statistical techniques dressed up in new clothes.

Here’s a wonderful extract from the class notes of a Stanford University expert on ML: (http://statweb.stanford.edu/~tibs/stat315a/glossary.pdf)

Machine Learning vs Statistics

It’s pretty clear why we should all be talking ML not statistics! And seriously, wasn’t data science enough of a salary upgrade for statisticians without throwing ML into the hopper?

Unlike big data, I have no desire in this case to draw any profound definitional difference between ML and statistics. In my mind, I think of ML as being the domain of neural networks, deep learning and Support Vector Machines (SVMs). Statistics is the stuff we all know and love like regression and factor analysis and p values. That’s a largely ad hoc distinction (and it’s particularly thin on the unsupervised learning front), but I think it mostly captures what people are thinking when they talk about these two disciplines.

 

What Problems Have We Tried to Solve with ML

At a high-level, we’ve tackled three types of problems with ML (as I’ve casually defined it): improving data quality, shopper type classification, and optimal store path analysis.

Data quality is by far the least sexy of these applications, but it’s also the area where we’ve done the most work and where the everyday application of our platform takes actual advantage of some ML work.

When we setup a client instance on DM1, there’s a number of highly specific configurations that control how data gets processed. These configurations help guide the platform in key tasks like distinguishing Associate electronic devices from shopper devices. Why is this so important? Well, if you confuse Associates with shoppers, you’ll grossly over-count shoppers in the store. Equally bad, you’ll miss out on a real treasure trove of Associate data including when Associate/Shopper interactions occur, the ratio of Shoppers to Associates (STARs), and the length and outcome from interactions. That’s all very powerful.

If you identify store devices, it’s easy enough to signature them in software. But we wanted a system that would do the same work without having to formally identify store devices. Not only does this make it a lot easier to setup a store, it fixes a ton of compliance issues. You may tell Associates not to carry their own devices on the floor, but if you think that rule is universally followed your kidding yourself. So even if you BLE badge employees, you’re still likely picking up their personal phones as shopper devices. By adding behavioral identification of Associates, we make the data better and more accurate while minimizing (in most cases removing) operational impact.

We use a combination of rule-based logic and ML to classify Associate behavior on ALL incoming devices. It turns out that Associates behave quite differently in stores than shoppers. They spend more time. Go places shoppers can’t. Show up more often. Enter at different times. Exit at different times. They’re different. Some of those differences are easily captured in simple IF-then programming logic – but often the patterns are fairly complex. They’re different, but not so easily categorized. That’s where the ML kicks in.

We also work in a lot of electronically dense environments. So we not only need to identify Associates, we need to be able to pick-out static devices (like display computers, endless aisle tablets, etc.). That sounds easy, and in fact it is fairly easy. But it’s not quite as trivial as it sounds; given the vagaries of positioning tech, a static device is never quite static. We don’t get the same location every time – so we have to be able to distinguish between real movement and the type of small, Brownian motion we get from a static device.

Fixing data quality is never all that exciting, but in the world of shopper journey measurement it’s essential. Without real work to improve the data – work that ML happens to be appropriate for – the data isn’t good enough.

The second use we’ve found for machine learning is in shopper classification. We’re building a generalized shopper segmentation capability into the next release of DM1. The idea is pretty straightforward. For years, I’ve championed the notion of 2-tiered segmentation in digital analytics. That’s just a fancy name for adding a visit-type segmentation to an existing customer segmentation. And the exact same concept applies to stores.

As consultants, we typically built highly customized segmentation schemes. Since Digital Mortar is a platform company, that’s not a viable approach for us. Instead, what we’ve done is taken a set of fairly common in-store behavioral patterns and generalized their behavioral signatures. These patterns include things like “Clearance Shoppers”, “Right-Rail Shoppers”, “Single Product Focused Shoppers”, “Product Returners”, and “Multi-Product Browsers”. By mapping store elements to key behavior points, any store can then take advantage of this pre-existing ML-driven segmentation.

Digital Mortar's DM1 Shopper Segmentation

It’s pretty cool stuff and I’m excited to get it into the DM1 platform.

The last problem we’ve tackled with ML is finding optimal store paths. This one’s more complex – more complex than we’ve been comfortable taking on directly. We have a lot of experience in segmentation techniques – from cluster analysis to random forests to SVMs. We’re pretty comfortable with that problem set. But for optimal path analysis, we’ve been working with DXi. They’re an ML company with a digital heritage and a lot of experience working on event-level digital data. We’ve always said that a big part of what drew us to store journey measurement is how similar the data is to digital journey data and this was a chance to put that idea to the test. We’ve given them some of our data and had them work on some optimal path problems – essentially figuring out whether the store layout is as good as possible.

Why use a partner for this? I’ve written before about how I think Digital Mortar and the DM1 platform fit in a broader analytics technology stack for retail. DM1 provides a comprehensive measurement system for shopper tracking and highly bespoke reporting appropriate to store analytics. It’s not meant to be a general purpose analytics platform and it’s never going to have the capabilities of tools like Tableau or R or Watson. Those are super-powerful general-purpose analytics tools that cover a wide range of visualization, data exploration and analytic needs. Instead of trying to duplicate those solutions we’ve made it really easy (and free) to export the event level data you need to drive those tools from our platform data.

I don’t see DM1 becoming an ML platform. As analysts, we’ll continue to find uses for ML where we think it’s appropriate and embed those uses in the application. But trying to replicate dedicated ML tools in DM1 just doesn’t make a lot of sense to me.

In my next post, I’ll take a deeper dive into that DXi work, give a high-level view of the analytics process, and show some of the more interesting results.

A Year in Store Analytics

It’s been a little more than a year now for me in store analytics and with the time right after Christmas and the chance to see the industry’s latest at NRF 2018, it seems like a good time to reflect on what I’ve learned and where I think things are headed.

Let’s start with the big broad view…

The Current State of Stores

Given the retail apocalypse meme, it’s obvious that 2017 was a very tough year. But the sheer number of store closings masked other statistics – including fairly robust in-store spending growth – that tell a different story. There’s no doubt that stores saddled with a lot of bad real-estate and muddied brands got pounded in 2017. I’ve written before that one of the unique economic aspects of online from a marketplace standpoint is the absence of friction. That lack of friction makes it possible for one player (you know who) to dominate in a way that could never have happened in physical retail. At the same time, digital has greatly reduced overall retail friction. And that reduction means that shoppers are not inclined to shop at bad stores just to achieve geographic convenience. So the unsatisfying end of the store market is getting absolutely crushed – and frankly – nothing is going to save it. Digital has created a world that is very unforgiving to bad experience.

On the other hand, if you can exceed that threshold, it seems pretty clear that there is a legitimate and very significant role for physical stores. And then the key question becomes, can you use analytics to make stores an asset.

So let’s talk about…

The Current State of In-Store Customer Analytics

It’s pretty rough out there. A lot of companies have experimented with in-store shopper measurement using a variety of technologies. Mostly, those efforts haven’t been successful and I think there are two reasons for that. First, this type of store analytics is new and most of the stores trying it don’t have dedicated analytics teams who can use the data. IT led projects are great for getting the infrastructure in the store, but without dedicated analytics the business value isn’t going to materialize. I saw that same pattern for years in web analytics before the digital analytics function was standardized and (nearly always) located on the business side. Second, the products most stores are using just suck. I really do feel for any analyst trying to use the deeply flawed, highly aggregated data that gets produced and presented by most of the “solutions” out there. They don’t give analysts enough access to the data to be able to clean it, and they don’t to a very good job cleaning it themselves. And even when the data is acceptable, the depth of reporting and analytics isn’t.

So when I talk to company’s that have invested in existing non Digital Mortar store analytics solutions, what I mostly hear is a litany of complaints and failure. We tried it, but it was too expensive. We didn’t see the value. It didn’t work very well.

I get it. The bottom line is that for analytics to be useful, the data has to be reasonably accurate, the analytics platform has to provide reasonable access to the data and you must have resources who can use it. Oh – and you have to be willing to make changes and actually use the data.

There’s a lot of maturing to do across all of these dimensions. It’s really just this simple. If you are serious about analytics, you have to invest in it. Dollars and organizational capital. Dollars to put the right technology in place and get the people to run it. Organizational capital to push people into actually using data to drive decisions and aggressively test.

Which brings me to….

What to invest in

Our DM1 platform obviously. But that’s just one part of bigger set of analytics decisions. I wrote pretty deeply before the holidays on the various data collection technologies in play. Based on what I saw at NRF, not that much has changed. I did see some improvement in the camera side of the house. Time of Flight cameras are  interesting and there are at least a couple of camera systems now that are beginning to do the all-important work of shopper stitching across zones. For small footprint stores there are some viable options in the camera world worth considering. I even saw a couple of face recognition systems that might make point-to-point implementations for analytics practical. Those systems are mostly focused on security though – and integration with analytics is going to be work.

I haven’t written much about mobile measurement, but geo-location within mobile apps is – to quote the Lenox mortgage guy – the biggest no-brainer in the history of earth. It’s not a complete sample. It’s not even a good sample. But it’s ridiculously easy to drop code into your mobile app to geo-locate within the store. And we can take that tracking data and run it into DM1 – giving you detailed, powerful analytics on one of the most important shopper segments you have. It costs very little. There’s no store side infrastructure or physical implementation – and the data is accurate, omni-joinable and super powerful. Small segment nirvana.

The overall data collection technology decision isn’t simple or straightforward for anyone. We’ve actually been working with Capgemini to integrate multiple technologies into their Innovation Center so that we can run workshops to help companies get a hands-on feel for each and – I hope – help folks make the right decision for their stores.

People is the biggest thing. People is the most expensive thing. People is the most important thing. It doesn’t matter how much analytic technology you bring to the table – people are the key to making it work. The vast majority of stores just don’t have store-side teams that understand behavioral data. You can try to create that or you can expand the brief of your digital or omni-channel teams and re-christen them behavioral analytics teams. I like option number two. Why not take advantage of the analytics smarts you actually have? The data, as I’ve said many times before, is eerily similar. We’ve been working hard to beef up partnerships and our own professional services to help too. But while you can use consultants to get a serious analytic effort off the ground, over time you need to own it. And that means deciding where it lives in your organization and how it fits in.

Which I know sounds a lot like…

Everything old is new again

I make no bones about the fact that I dived into store measurement because I thought the lessons of digital analytics mostly applied. In the year sense, I’ve found that to be truer than I knew and maybe even truer than I’d like. Many of the challenges I see in store analytics are the ones we spent more than decade in digital analytics gradually solving. Bad data quality and insufficient attention to making it right. IT organizations focused on collection not use. A focus on site/store measurements instead of shopper measurement.

Some of the problems are common to any analytic effort of any sort. An over-willingness to invest in technology not people (yeah – I know – I’m a technology vendor now I shouldn’t be saying this!). A lack of willingness to change operational patterns to be driven by analytics and measurement and a corresponding challenge actually using analytics. Far too many people willing to talk the talk but unable or unwilling to walk the walk necessary to do analytics and to use it. These are hard problems and it’s only select companies that will ever solve them.

Through it all I see no reason to change the core beliefs that drove me to start Digital Mortar. Shopper analytics is critical to doing retail well. In a time of disruption and innovation, it can drive massive competitive advantage if an organization is willing to embrace it seriously. But that’s not easy. It takes organizational commitment, some guts, good tools and real smarts.

Digital Mortar can provide a genuinely good tool. We can help with the smarts. Guts and commitment? That’s up to you!