I’ve found recently this post “Computers scan a crowd, gauging its mood“, in an interesting blog about “design, bussiness and innovation” as they describe themselves.
Well, apart from the artistic and social experience point of view, I think there we have an ocean of possibilities in terms of analizing, for instance, the reaction of the audience when showing a movie, or the reaction of customer’s when checking a new collection in a clothing shop.
It would be a step forward in the devices for data collection of customer’s traffic in POS (points of sales). The most common one is the footfall, a device for counting people’s passing the shops entrance.
What is the “footfall”?
The number of people visiting a shop or chain in a period of time has become to be called it’s footfall.
As it can be imagined, the footfall is an important indicator of how successfully a company’s marketing, brand and format are bring people into its shops.
Footfall is an indicator of the reach a retailer has, but footfall needs to be converted into sales and this is not guaranteed to happen. Many retailers have struggled to turn high footfall into sales.
Trends in footfall do tell investors something useful. They may be an indicator of growth and help investors to understand why a retailer’s sales growth (or decline) is happening. Investors may want to know whether sales growth due to an increase in the number of people entering the shops (footfall) or more success at turning visitors into buyers (which can be seen by comparing footfall to the number of transactions).
Sales growth may also come from selling more items to each buyer (compare number of transactions to sales volumes), selling more expensive items (an improvement in the sales mix), or increasing prices.
Companies such as T-CUENTO or Experian, have developed more shopisticated tools (what they call retail intelligence) to improve the versatility of those powerful tools to measure the impact of decisions in the retail bussiness. In next post, I’ll try to explain some of them.