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Affected by the macroeconomic deflation after the epidemic, the physical retail industry continues to face challenges. Coupled with the strong presence of e-commerce channels, offline retail (esp. for those chain stores and franchise conglomerate) are confronted with severe issues such as reduced in-store footfall and decreased conversion rates.
Public information has shown that in 2022, the year-on-year growth rate of offline retail in Europe was only 1.09%, and the United States witnessed a wave of closures of the physical stores. In the first quarter of 2023, the sales of supermarkets and specialty stores in Chinese retail industry above a certain limit increased by only 1.4%, much lower than economists’ expectations. Passers-by footfall is a crucial indicators for store operations, and the in-store conversion rate is essential for both acquiring new customers and encouraging repeat business, putting pressure on end-sales performance. In the context of a significant global slowdown in growth and substantial profit contraction, accelerating the digital transformation of physical retail stores has become inevitable to enhance operational capabilities.
The challenges faced by the digital transformation of physical retail stores are continuous and systematic. From footfall volume to repurchase rate, all key elements throughout the entire conversion funnel must be interconnected and aligned for retail store digitization to achieve maximum efficiency, thereby assisting businesses in decision-making analysis, precise marketing, and refining in-store user data to improve store sales.
According to incomplete statistics, 76% of store operators focus on the complete conversion of the “sales funnel,” 41% of store operators monitor and analyze the footfall data at the entrance, and 48% of store operators deploy intelligent people counting devices for fine-grained in-store conversion rate assessment at the gate position.
Among these, the sales funnel is a commonly used tool model for sales management in physical retail stores.
VionVision, as a leading comprehensive store digitization solution provider, integrates AloT hardwares and SaaS Open Cloud services. Using globally-leading computer vision analysis technology and self-developed & patented algorithms, VionVision deeply analyzes customers’ shopping processes while ensuring individual privacy, significantly optimizing operators’ marketing strategies. The BI platform, based on the sales conversion funnel, can assess abnormal factors affecting each level of the funnel, providing direction for store operation optimization. Simultaneously, through functions such as AI store patrols and intelligent supervision, VionVision continuously drives positive store operations.
As a long-term AI+IoT service provider empowering and accelerating the digitalization progress of stores, VionVision’s store-level footfall solution has achieved remarkable results in optimizing in-store conversion rates. Over the past few years, this solution has assisted leading brand chain stores such as Huawei, OPPO, Xiaomi, Carrefour, Aimer, Bugis, Chanel, Starter, Deji Plaza, and others in embarking on a new chapter of digital business transformation, achieving scientific predictions, optimizing business strategies, and boosting sales.
The digitalization of stores is the key to gaining advantages in the fiercely competitive market of the physical retail industry, as evidenced by:
Reconstructing business processes by analyzing customer behavior, sales, and other data to reduce costs and increase efficiency.
Using automation, intelligent identification, and recommendation methods to enhance operational efficiency and service quality.
Improving customer satisfaction by providing customized products and services.
4—BI Data Analysis and Decision Support
Achieving fine-grained operation and management of stores through big data analysis and reporting.
The OODA and PDCA theories for system operation are indispensable steps in digital operation and analysis. The OODA loop focuses on obtaining data on the high and low changes in various layers of the sales funnel, issuing sales conversion warnings for stores, and attributing analysis of store operation strategies. Corresponding rectifications can be made to quickly drive the next cycle of customer flow data and improve sales transaction conversions.
The PDCA cycle focuses on continuously and stably optimizing store operational processes. Through the formulation, testing, verification, adjustment, and promotion of phased operational plans, the best “sweet spot” for store operations can be found.
Igniting sales opportunities, improving funnel efficiency, and comprehensively using both OODA and PDCA loops will be more effective. Through the use of these two loops, we can efficiently, accurately, and continuously achieve business goals, providing comprehensive support for empowering physical retail in the era of digital operation and management.
VionVision’s store digitization solution can provide end-to-end data support based on OODA/PDCA methodologies, facilitating better application. VionVision has always focused on core AI technology innovation from perception to collaboration and decision-making, leading the innovation and implementation of AI applications in the digital retail industry. As a leading comprehensive store digitization solution provider, it is also committed to advocating, leading, and ultimately achieving the digitization transformation of the retail industry.