FOOTFALL ANALYSIS

Footfall is also known as 'Walk-in' in the number of people walking into a retail store for the respective period be it a day, week or month. With the advent of technology and IOT, it has become easier for retailers to track footfall attributes accurately. It lets a retailer understand the success of the retailer's marketing strategy and brand power. There are huge benefits in analysing the footfall and its attributes. The below are few of the analysis that can be done by collecting footfall information (in brief) :
- Direction Analysis
- Gender Analysis
- Age Group Analysis
- Time Analysis
- Conversion Rate
- Location Analysis
- Loyal Customer Walk-ins

1.Direction Analysis: 
Customer tend to move towards a direction, either right, left or straight when they walk into a store. Display of mannequins, gondola display, store layout can force customers to move it a specific direction which will cause drop in sales to the areas of the stores which get minimal footfalls.

2.Gender Analysis: 
Brick and mortar stores have limitations with respect to space, which cannot be expanded. So analysing the percentage of male and female walking into your store will help you plan your assortment such as few stores may require better assortment and range of products suiting female customers compared to male customers. This is more important in fashion retailing.

3.Age Group Analysis: 
This analysis helps retailer under the age group it is catering to by understanding what percentage of walk-in is kids, millennials, baby-boomers/senior citizens, etc. Classification of age group can be coupled with gender to give better meaning to your analysis so that assortment and display can be planned accordingly. For example if a store has more of senior citizen walk-in then display has to be structured in such a way that their respective products are kept at reachable heights and easily accessibly aisles of the store to give a comfortable shopping experience. Also retailer can provide facilities like wheelchairs, electric carts with shopping basket attached, etc.,

4.Time Analysis: 
This analysis helps retailer understand the peak hours, peak days and peak seasons. Based on the analysis outcomes in-store promotions can be planned to liquidate inventory and make the best use of peak walk-in. Shifts for staffs can be planned according to the peak hours during the day, weekend or sale season so that customer service is not compromised due to staff shortage. Retailers also higher contract staffs for bagging and for visual merchandising during off-sale to maintain the shopping environment and visual merchandising standards. For example if the walk-in is more in the evening then the retailer can plan for clearance price in fruits and vegetables after 6 PM to clear the unsold ones from the morning so that fresh stock can be stocked the following day there by reducing wastage and retaining freshness in Fruits and Vegetable section.

5.Conversion Rate:
This analysis will let the retailer know what percentage of customers who walk in to the store actually buy from them. Conversion rates are usually low in Mall Store formats and high in Stand alone stores. But by understanding what is the actual reason for drop or increase in conversion rate during various time frame will help retailer to take necessary action to sustain higher conversion rate.

6.Location Analysis:
This analysis will let the retailers understand which stores in their chain has highest walk-in. This coupled with conversion rate will give insights into which store has high walk-in compared to which stores are actually converting this walk-in into sales. ATL and BTL marketing activities can be conducted to increase walk-in.

7.Loyal Customer Walk-In:
With advance in technology and IOT, retailers can differentiate between Loyal customers and new customers who can be converted into a loyal customer. In-store routers and mobile app can assist retailers achieve this. If there is high percentage of loyal customers coming into a store and the store is also a top performer in location analysis then the store team is hitting the right cord with the customers there by maintaining high level of customer satisfaction.

Customer Relationship Management : RFM Analysis and RFMV Analysis

What is RFM analysis ?

RFM analysis is done in order to understand the health of a customer's relationship with a retailer and the value of a customer to a retailer by analyzing the historical sales data for the respective customers. The outcome of this analysis is used in direct marketing, customer centric promotions and loyalty programs.

The modules used in the analysis are :

RECENCY :
How recent did a customer purchase ?
This explains when was the last purchase made by the customer, by this we can select the list of customers who has purchased from the retailer in the last 90 days or 180 days or 365 days.

FREQUENCY :
How frequently a customer purchases ?
This explains what is the frequency of purchases the customer makes with a retailer. This is calculated based on number of purchases made by a customer in the last 90 days or 180 days or 365 days.

MONETARY VALUE :
How much does a customer spend ?
This explains how much does a customer spend for a stipulated time period similar to the previous two scales. This also provides information on customer spend per purchase and over a period of time i.e. a customer might not make big shopping per visit but totaling their purchase over the same period of time will project a bigger purchase value compared to a customer who has done a single big purchase.

VOLUME :
How many products a customer has purchased ?
This is an add on to the RFM analysis which indicates how many products a customer has purchased or volume quotient of a customer's purchase pattern over a period of time. This in combination with Monetary value of the customer shows whether the customer purchases high value products or a general shopper buying small value products for regular use


SCALE OF MEASUREMENT
Recency, frequency and monetary bench mark scales may vary from retailer to retailer based on their product assortment and the lifespan of the product sold. Based on a retailer's product portfolio they can choose a scale based on a benchmark set for each of the module. We can look at how this can be done through a simple example :

A is a supermarket store having products in convenience, home appliances and grocery categories.

Sameer had purchased at A 5 times in the last 30 days as on 30-Nov-15, his last purchase was on 27-Nov-15. He has purchased for 1000 Rs., 2500 Rs., 1500 Rs., 1500 Rs. and 2200 Rs. respectively. Total quantity of products purchased by him is 20

Rachel had purchased at A only once in the last 30 days as on 30-Nov-15, her last purchase was on 2-Nov-15. She has purchased for 10500 Rs. Total quantity of products purchased by her is 1

Based on the above purchase data we can easily arrive at the below observation through data analysis:

Sameer and Rachel are both high value shoppers but there Is a lot in difference between the two which this analysis throws light on, that can help the retailer can use to arrive at customer centric promotion to increase sales and frequency of customer visits.

SAMEER'S PURCHASE ANALYSIS :
- He is a recent shopper who has visited the supermarket in less than 15 days
- He has purchased 5 times in the last 30 days so he is a frequent shopper
- He is a high value shopper as per the retailer's bench mark. His total purchases are worth 8700 Rs.
- He is a high volume shopper as well and based on his value and volume of purchase we can see that he buys less expensive products that are more of a necessity than luxury

RACHEL'S PURCHASE ANALYSIS :
- She is an old shopper who has not visited the supermarket in the past 15 days
- She has purchased only once in the last 30 days so she is a occasional shopper
- She is a high value shopper as per the retailer's bench mark. Her total purchase is worth 8700 Rs.
- She is a low volume shopper as well and based on her value and volume of purchase we can see that she buys expensive products that are more of a luxury than a necessity

Customers who have not purchased in the stipulated time period can be contacted by customer service manager or marketing team can mail the customer attractive promotions based on their historical purchases to resume trade.

NOTE : RFMV analysis is not a standardized analysis matrix in CRM. This is a customized version used by me in analyzing customer value. I feel this provides better depth into customer purchase pattern there by helping a retailer analyse his customer' value better

THREE TIERS OF SUPPLY CHAIN IN RETAIL

Retail industry is a very complicated and sensitive network bound by people and machine. Any gap or lapse in process will lead to collapse of the complete supply chain. That's why its right said, "Retail is Detail". We need to plan, do, check and act (PDAC coined by William Edward Deming) in every segment of the supply chain. To implement PDCA process we also need to understand the classification or tiers in retail supply chain. We can define 3 tiers in any retail supply chain i.e. a supplier's supplier to a customer's customer.
1. Supplier Relationship Management (SRM)
2. Internal Supply Chain Management (ISCM)
3. Customer Relationship Management (CRM)


1. SUPPLIER RELATIONSHIP MANAGEMENT
SCM deals with the overall planning and assessment of the third part logistics or players involved in the sourcing and procuring of products by the organisation. This could involve manufacturers, suppliers, wholesalers, distributors and local vendors. SCM opens up the doors for closer ties with a few suppliers to uncover the potential of doing business together which will be mutually beneficial. Some of the health checks that can be done to review the relationship with the supplier in terms of SCM can be done through the below ratios and reports :
- Stock fulfilment ratio
- Payment report
- Supplier purchase report
- Supplier sales report
- Vendor Managed Inventory
- Vendor - Retailer performance report
- Demand Forecasting Report

2. INTERNAL SUPPLY CHAIN MANAGEMENT
ISCM covers all the internal movement of goods within the organisation over which the management has full control on. These involve the processes of internal distribution, replenishment and storage. The primary goal of Internal supply chain management is to satisfy the CRM's demands and manage reverse logistics.
Reports to monitor efficiency of internal supply chain management are :
- Distribution centre fulfilment report
- Distribution centre performance report
- Store Returns report
- Inventory ageing Report
- Replenishment Report
- Demand Forecasting Report

 3. CUSTOMER RELATIONSHIP MANAGEMENT
CRM deals with the processes involved in the interface between an organisation and its customers. In retail it covers Point of Sales/Service, Customer Loyalty Program, Website, Marketing activities and customer data analysis & analytics to forecast customer demand. It is CRM that defines the demand to be fulfilled by ISCM.
Reports to monitor efficiency of internal supply chain management are :
- Customer Churn Report
- Market Research Report
- Sales Reports
- E-commerce website analysis report
- Competitor Analysis report
- Market Basket Analysis

Overview of processes involved in the three tiers of supply chain management

SRM	ISCM	CRM
Sourcing	Strategy Planning	Marketing and market study
Negotiation	Demand Forecasting	Competitor Analysis
Supply Collaboration	Supply Planning	Sales analytics and analysis
Deals and Contracts	Reverse Logistics	Point of Service
Supplier Performance Review	Demand Fulfilment	Omni channel management