While e-commerce is rapidly increasing, physical stores still have their advantages. In fact, adopting new technology, such as facial recognition, can efficiently boost retail sales to the next level and streamline store operations.
What is Facial Recognition and its Application?
Facial Recognition technology can verify an individual's identity using their faces without close contact. It is a category of biometric security that include voice recognition, fingerprint recognition, and eye retina or iris recognition. This technology collects people’s biometric data associated with their faces and facial expressions to identify them. Apart from security usage, it is also widely used in retail, healthcare and even law enforcement. Nowadays, an increasing number of private and public organisations are using facial recognition to provide high-level security and apply it in smart surveillance systems. The global facial recognition market is expected to grow from $4.71 billion in 2021 to $5.48 billion in 2022.
5 Benefits of Facial Recognition for Retail Stores
During the pandemic, more and more physical stores accelerate their pace of digital transformation. This meant that facial recognition technology is now being widely experimented with in many shops and has sparked a wide concern on how this technology really benefits offline stores. Here are five advantages of placing facial recognition systems in offline shops.
1. Sharpen Marketing Strategies
Demographic statistics about clients are vital to every retail company’s retail marketing. With the video recognition and data analysis, stores can gain more data to estimate the customer behaviours including:
- Visitor number
- Visitor gender, age group and race
- How long did each visitor stay in the store or in a specific area
- Peak traffic hours
- Which product sections attracted the highest number of visitors
With this data in hand, the marketing team can adjust sales and marketing strategies, and allocate more accurate resources to retarget different potential or current customers.
2. Provide Personalised Customer Experience
Understanding customer needs is the crux of grabbing their affection for the store. To achieve that, there is a need to determine customer preferences for different products and their feelings about the purchase journey in the store, whether positive or negative. Facial recognition can help detect and analyse customer sentiment in real time and gather the data to help companies look further into it, to see how to provide a better shopping experience for their customers.
Recently, the US supermarket chain Walmart announced that they would adopt Minority Report-style facial recognition technology from the big screen to retail stores to identify unhappy customers at scale. For example, if shoppers consistently leave, say, the supplement corner looking a frustrated, it probably means there is something disappointing among the products. Then, the store can offer a special discount or change the visual merchandising to get a better reaction from customers.
3. Improve Employee Productivity
Apart from customers, the facial recognition system can also be utilised to monitor employees’ productivity automatically and remotely. From the perspective of management, the technology is there to ensure that employees will not get away with wasting time or treating customers in an unprofessional manner, which acts as both a deterrent and an encouragement to employees. From the perspective of employees, replacing the traditional clocking-in system can avoid inconvenience if staff forget their cards or have other employees' clock in and out for them. The technology can also quickly recognise VIP customers, so employees can place more emphasis on servicing them.
4. Prevent Theft Efficiently
Facial recognition system can assist with shop security and compliance obligations 24/7. According to the Hong Kong Police Force, there were 3,736 cases of shop theft in 2021. To combat these often coordinated thefts, retailers are advised to use facial recognition technologies. As the system is able to memorise hundreds of faces, therefore, once a theft has occurred, the store can extract the data from the system and quickly catch the offenders. The mere presence of the device also provides a deterrent for thieves to stop thefts happening in the first place. Overall, the technology creates a safer working environment, prevent theft and reduces lost revenue.
5. Implement Health Management
During COVID-19, facial recognition technology evolved with different health applications to check the health status of customers. The majority of facial recognition devices for retail can also checking customer and employee body temperatures and of they are wearing mask. If customers take off their masks or their body temperature is fluctuating, the system will send instant alerts to staff. The effectiveness of facial recognition for monitoring in-store health and safety is highly appropriate for offline stores.
Our Solutions for Retails
The retail industry should always surprise customers with innovative technology and fresh experiences to maintain a good in-store purchase record. Iris by HKT provides solutions to capture video from centrally managed surveillance cameras, analyses video data to produce key intelligence on customer behaviour and provides real insights to enable retailers to optimise their business strategies.