Sensors measure the external environment by receiving physical inputs and translating them into an electrical signal sent to a computer. They measure a range of elements, including motion, sounds, images, temperature and connectivity.

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Customer Experience Tools and Trends

Our insights share how the right CX tools make customers’ lives richer and more fulfilling and strengthen a company’s economics by holding down costs and securing new revenue streams.

Sensors deployed in stores or branches use such technologies as barcode scanning, Wi-Fi, radio-frequency identification, videoLAN client, Bluetooth and near-field communication. Using sensor-based technology helps businesses understand customer movement, optimize in-store engagement and manage inventory, while transforming physical customer experiences and blending them with digital experiences.

Proximity sensors or beacons allow firms to collect information on store traffic. This data feeds into systems that optimize store location and layout, inventories and products, directly affecting a company’s revenues.

More recently, companies have shifted focus from sensor hardware to software, with an accompanying shift from capex to opex. Reduction of capex budgets is particularly beneficial during economic downturns.

How companies use in-store or branch sensors

• Optimize the physical network and store performance. Store sensors help managers understand footfall, cross-visitation and customer profiles, as well as multiyear, seasonal, or even localized insights and trends. This enables decisions on branch network optimization, including new stores or store closures.
• Optimize conversion. Insights derived from sensor data can improve merchandise planning, pricing or personalized offerings, all of which lead to better experiences and economics. Increased conversion rates, whether in-store or digitally, can be realized through aligning products and stocks with store customer profiles, using smart shelves for inventory management, or integrating the vital branch experience into an integrated cross-channel one.
• Enable real-time decision making. Information from sensors, along with other data, enables frontline employees to provide real-time support and differentiated experiences for customers.
• Increase operational efficiency. In-store sensors can be deployed to improve operations such as self-checkout, registry-free checkout, inventory management, shelf stocking and airport security.
• Protect against theft and reduce shrinkage. Store sensors can detect theft and, using machine learning, identify specific movements or patterns related to theft.
• Track shopping mall traffic. Understanding customer traffic enables decisions on store placement, rent and advertising.

Key considerations

• Privacy and cybersecurity. Regulations such as the EU’s General Data Protection Regulation have increased scrutiny of sensor usage, while consumers have become more concerned about the collection and use of their personal data. Hence, companies need to fold the use of sensors and the data collected into broader privacy-management and cybersecurity frameworks. Make sure the policies are transparent to consumers and that they adhere to laws and regulations.
• Alignment with digital vision. The application of sensors should align with a company’s digital vision and roadmap. The use cases for such devices should clearly link to business value in order to justify the investment. For example, deploying sensors at a select few stores may yield more business value than a blanket installation across all stores.
• The right partner for the right use case. Vendors of digital tools have proliferated. Cut through the noise of this marketplace by choosing the right use cases, then find a partner that provides relevant solutions. 
• Integration in technology and data ecosystem. Data from sensors works best when it supplements data from other tools to fuel analysis and insights about the entire customer experience, both physical and digital. Many retailers are also adopting a combination of cameras and mobile tracking beacons, which give a full view of customer and merchandise flows, including tracking of known customers.
• Focus on software over hardware. The value from sensors is moving from the device itself to the software. With the latest software, for instance, a standard camera can perform full image recognition. The shift from device to software implies a shift from capex to opex, along with the rise of subscription-based models.