Consumer Watchdog: Buy: You're on camera

David Corrick believes his technology can encourage people to open their wallets. Photo / Doug Sherring

Retailers use software to track shoppers in store.

Retailers are installing sensitive surveillance software to spy on customers and figure out how to make them spend more.

Kiwi company Reveal is selling the monitoring product around the world, and says some clients are using the technology to convert four times as many shoppers from "browsers" into "spenders".

Reveal managing director David Corrick says long lines and too few staff are generally the biggest reasons customers will turn on their heels and walk out the door without spending, but reasons can be much more complex.

Reveal software tracks customers in a store, noting behaviours such as the path they take, where they linger and how long they stay. The shoppers are not identified, but the patterns are used to optimise store layouts, train staff and encourage spending.

"Customer conversion [the ratio between the number walking in and the number making a purchase] is the holy grail of retail," he says.

Corrick says many retailers are getting it all wrong, and driving customers away in their attempt to cut costs.

"The biggest threat to retail is not online shopping, it's poor service. The internet will kill you every time if you try to sell on price."

He constantly hears retailers saying many people in the shop are simply burning time.

"Almost every person walks in with the intention of buying something, yet customers are not considered customers any more. A huge amount of money walks out the door because someone can't see their size or colour or the product they're looking for."

Likewise, self-service kiosks and in-store iPads are "insane" because a huge body of research shows customers prefer meaningful staff engagement before they open their wallets.

"They want staff who really know what they are talking about, someone who can recommend a product and give a good reason for recommending it. Customers spend more if they are given service. I always challenge people to remember the 'extraordinary' retail moments where they've walked out feeling absolutely thrilled with their purchase. It should be the norm, but most people only have a few in their lifetime."

Another common mistake retailers make is cutting front-line staff. "They don't realise what it's costing them. Putting an extra person on during late-night shopping might cost $50 [in wages] but could increase sales by $1000."

How do your shopping experiences stack up? consumer@hos.co.nz

Software helps identify customers who want help

Noel Leeming and Bond and Bond have used the Reveal software to monitor customer behaviour and develop a "multi-level attack" for the consumer dollar.

Chief operating officer at Noel Leeming Group Tim Edwards says the data was used to redesign store layouts to better serve two distinct types of customers: those craving staff expertise and those who wanted to self-select.

For those who want to be left alone, there are now clearer signs to make comparing and selecting products easy.

For the customers who crave engagement, showcase areas are being rolled out, complete with couches for comfort while staff demonstrate how products work.
The Reveal data is analysed on a daily basis to gauge the store's performance.

Edwards says that it is also useful to overlay the data with staff rosters to get the customer-staff ratio right.