What is Image recognition?
Image recognition is related to computer technologies that recognize images, shapes, objects, animals, and products through algorithms or machine learning processes.
It is a subset of computer vision that enables the computer to see things as the human does through image processing.
The image recognition market size shown is projected to grow from USD 26.0 billion in 2020 to USD 53.0 billion by 2025 at a Compound Annual Growth Rate (CAGR) of 15.1% during the forecast period.-Marketsandmarkets.com
In the retail world, which is the next big thing, image recognition is used by CPGs as a productivity tool to enable faster audits, high accuracy, and boosted efficiency.
Consumer brands have always struggled due to the variability of products and their sizes and compositions. Due to this, it becomes unlikely to have one plan for the whole store display.
Thus it is acceptable that there will always be some disconnect between their planogram and display.
FMCG and CPG manufacturers are constantly challenged to track hundreds of SKU assortments per category per segment across thousands of stores in real-time, which is more complex.
And while a well-implemented in-store strategy can set your customer experience apart, the hard reality is that poor retail execution is responsible for 25% of lost sales.
Although this bridge can also cover image recognition by tracking their in-store KPIs, which yield better results, are more efficient, and are accessible to a broader customer base.
Image recognition could help CPG in tracking:
- On-Shelf Availability
- SKU Presence
- Stock Levels by Threshold
- On-Shelf Visibility
- Number of Facings
- Share of Shelf
- Planogram Compliance
- Assortment Compliance
- Promotion Compliance
- Number of Displays
Image recognition(IR) does not limit itself to in-store strategies; instead, it extends to analytics. IR has been a propitious medium to keep tabs on competitors and their activities. It becomes important for any retail sector, from consumer goods to fashion to grocery to consumer electronics.
It becomes indispensable for any business to evaluate its competitors’ markers. Thus IR comes into play and has become pivotal in the retail industry since then. The process is called Competitive analysis.
What is competitive analysis in image recognition?
Competitive Analytics advises and develops analytical workflows for successful retail companies empowering them to understand their competitive environment, enhance their predictive modeling capabilities, and target customers with the highest lifetime value by deploying advanced retail analytics.
Get competitive insights on how your display, promotional, and pricing strategies stack up against competitors’ in-store strategies
Various goals can be achieved through competitive analysis:
- improve sales performance
- Analyze profitable customer segments
- Increase customer loyalty
- Create efficient manufacturing strategies
- Monitor and make decisions based on store traffic trends
- Powerful customer insight
- Develop strategies for targeted interactions with current and potential customers
- Improve brand perceptions
The human brain can process images the eye sees in just 13 milliseconds, the first evidence of such a fast processing speed.
It is believed that many times when consumers find out-of-the-stock situations at retail stores, which leaves them with four alternatives:
- Buy from a neighboring competitor
- Go and buy the identical product from a different chain
- Buy online
- Or halt for some time and buy during the next purchase.
Steps involved in competitive analysis for SKU
1. Identifying the present and future competitors
The best way to identify the competitors is by analyzing the targeted product. This allows you to examine the branded and unbranded companies in the same product line
2. Analyzing the market share
Knowing your competition’s strengths and weaknesses is only plausible once you know their presence.
In addition, you can also search a supermarket to find the reason why your competition is selling. Is it sold because it is readily available, the quality is high, or the price is low? This step will help you perform a SWOT.
3. Competitor’s Pricing
Pricing has been a vital concept while analyzing competitors as, for a majority of customers, the price of the commodity is a paramount basis while shopping.
The range of products under a price band or pricing across various retail outlets must be determined for an unerring competitive analysis and competitor pricing strategy.
4. Performing SWOT analysis
SWOT analysis is needed to determine the strengths and weaknesses of the competitors to get the trigger points that can benefit you and your store.
Once the market share is received, the next step is the primary and secondary SWOT analysis. Every brand needs a benchmark to move forward and undermine the strategies of its competitors to get ahead.
5. Customer behavior patterns
Customers are the recipient of your products and strategies implemented. Customer satisfaction always gives better insights into how a business is doing. Analyzing your business also comes under competitive analysis.
Competitive analysis for IR – SKU in retail
- Image recognition helps identify the SKUs through the shelf facing, which allows the brands to get insights and details on how much of their product is selling and improves shelf availability for the SKU marketplace.
- Image recognition makes it effortless and facile to determine the key performing indicators. So that in the future, the brands can start working on them and extract outgrowth.
- It is an uncomplicated process wherein you need to click a picture of the requisite SKU, and it pans out the information regarding the performance of the brand’s products.
- Identifying the product phase, penetration, technological know-how, etc., are deep-dived to understand the product trends and output.
- The factors such as sales and demand from past trends are considered to estimate future market growth and analyze upcoming strategies for follow-up analysis.