Open innovation applied to the future of retail

A USE CASE BY

Introduction

The company is a multinational of optical shops created almost 50 years ago and the current market leader.

It’s present in 16 countries and its growth is based on a franchise system, it is an internationalisation success model, with more than 500 franchised, 1.500 selling points and a turnover of 850 million euros approximately.

It’s mainly known by its distribution model, that combines multiformat presentations –with a shop network in different locations, with adapted areas and an active management that guarantees an optimal functioning– and multichannel, as it also has several e-commerce platforms under different brands.

Need

One of the strong points of the company is the physical selling point, in which they want to get the best possible result. This entails an optimal distribution of the spaces and an excelent traffic management, that allows the clients to have good visibility and easy access to all the products and services, generate interest and curiosity to know more about them and raise the conversion rates and sales.

The company already has analysis and measurement systems, however, it has been observed that the current systems are very sensitive, and they are affected by deviations that entail inaccuracies in the obtained data.

The analysis of this data must allow, additionally, to know the exact behaviour of the customer in the store, companion measurement, definition of heat maps, route, time spent, checkout rate… and to give the possibility to cross data with online visits to know, for example, if a visitor comes from an impact through the website.

Having this information will allow to design specific sale actions on, for example, companions, based on the interest they might have shown in the exhibited models or their movements through the exhibition areas, or launching campaigns on specific models according to the interest they have awaken.

Besides, the company is fully aware these requirements can only be tackled with high investment, so they need external validation for the decision to be made.

Goals

Search of existing technologies to carry out analysis and measurements.

Finding suppliers that dispose of reliable systems with implementation possibilities in this business model.

It’s about finding a technology supplier that enables a reliable data gathering from a series of indicators, each one with specific weight, as represented in this chart:

Indicators
Visits
External traffic
Frequency
Sales conversion
Sociodemographic profile
Access to information cabinet
Heat maps
Reason to visit
Companions

In this technology, other features are also valued, such as its user-friendliness, the customisation possibilities of the technology, the utility of the gathered details or the option of extracting reports.

Solution

The multinational managers in Spain decided to entrust Peninsula the search of the best provider enterprise to implement the measuring systems. To do so, our company created a pilot process to locate and evaluate technology suppliers, that would allow the mesaurement of the interest parameters. This pilot was done carrying out three coordinated phases:

1

Interviews

2

Pilot implementation

3

Results and pilot analysis

The assessment and comparison solve the problem, assigned to the most adequate provider.

Achieved results

An exhaustive search of potential suppliers was carried out. Then, from these a selection was done to develop the analysis and the evaluation of their suitability, leaving 4 candidates to do the study.

The pre-selected enterprises don’t match a single business model or corporation, but they combine the collaboration between big and small startup companies with cutting-edge specialised technology.

The comparison between the different interest parameters, indicators and the cost of the technology gave as a result the eselection of the recommended company: Cad&land.

It covers the needs of analysis of the main indicators, as well as WiFi coverage for the visitors to use or the realisation of marketing campaigns. It uses Orange and Flame Analytics as collaborators.

Development and methodology

As we said, a 3-steps pilot was developed:

Interviews phase

Sessions of ideas generation with the different stakeholders to achieve the necessary information and to define the indicators. We contacted HR, management, finances, sales & franchise, store management, online department, marketing, IT, shop and office staff.

From the data gathered here, we looked for suppliers to which a well-defined request is presented, being able to value what technology and service each one offers.

The information of this part is summarised in the interview report and the KPI definition document

Pilot phase

The different pre-selected companies had to implement their product in the selling points chosen by the client: 2 in Barcelona and 1 in Madrid.

The tasks to be done by Peninsula include:

The duration of this fase was 2 months so all the suppliers could act.

The manually-audited measurement report in selling points gathers all the information during this period.

Analysis and results phase

An evaluation of the obtained results with the different technologies by the pre-selected providers and the conclusions that were highlighted during the comparison was realised, that is, analysing its price, considering both the installation and the maintenance and the reliability of their data, and also the different offered services, among which they value, besides of the already specified, the stay time in each shop area, the online/offline conversion and the visit in the selling point: gender and age of the client, country of origin or socioeconomic level.

The information here is summarised in a comparative report with recommendations and the presentation of results in the client’s headquarters.