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Maciej Witkowski

COO
Lab4Motion Solutions

Biography

With deep expertise in strategy development and competitive analysis, Maciej Witkowski serves as COO at Lab4Motion Solutions, specializing in advanced image and video intelligence solutions that transform raw data into real-time actionable insights that enable CPG manufacturers, retailers and service organizations to better define, target, control, and continuously improve their retail execution, sales and service strategies. He is a senior executive with hands-on experience in startups as Investment and Portfolio Manager in one of the Polish seed funds, and as a serial Angel Investor.

Maciej also held consulting and business analyst roles at KPMG, where he leveraged his economics and financial background to provide financial & strategic advisory services as a member of M&A teams. In the course of his advisory career he has worked with multiple retailer and FMCG companies.

 
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Video recognition and analysis has been referred to as “Google Analytics for the offline shopper.” Can you expand on that?

A lot of things that happen offline are similar to those in the online world, but they’re only being measured in the online space. Google Analytics measures marketing campaign effectiveness, pricing communication, and the promotion of products by analyzing metrics such as site traffic volume, user flow, conversion, times spent on each particular site, and abandon rate. Without basic knowledge about the number of visits or time spent on the site, a website’s efficiency cannot be properly measured. The design of e-commerce websites is data driven, not based solely on expert knowledge, and behind each design change there are A/B tests with traffic performance indicators which are deployed to continuously improve website performance.

Video recognition and analysis transfers the same methodology to the offline world. While translating physical world traffic and shopper behavior into high quality data is certainly more challenging, the expected return is also much higher. It’s also worth noting that approximately 94% of all retail sales are still generated in brick-and-mortar stores today – so there’s a huge opportunity in the offline space.

 

What are some issues you see in regards to the traditional methods of tracking consumer behavior?

Existing methods rely heavily on repetitive manual work, which is expensive, non-scalable, and unreliable, as tests are only performed on a selected sample set of data, on customers who agree to respond, but in a manner which is intrusive to their natural behavior and not representative of the total population. Furthermore, by the time the information is collected and processed, it may no longer be relevant due to the time required to complete all of the tasks and it also does not provide opportunities to react in real-time and address specific situations which may be happening in store. As a result, traditional methods of tracking offline consumer behavior do not provide the business value opportunities that methods deployed in the digital space provide.

 

What information can CPG companies and retailers learn about their customers and how can they use this information as a competitive advantage?

Peter Drucker, a business management guru set out a thesis many years ago, which is still valid today and answers this question perfectly – “If you cannot measure it, you cannot improve it.” Thanks to the latest technological breakthroughs and achievements, around IoT, image recognition and artificial intelligence, it is now possible to obtain high quality customer traffic and store-level data, and analyze this information cost-effectively in real-time.

By understanding the customer journey until the moment the customer selects a product from the shelf, CPG companies, as well as retailers, can verify how their pricing communication, product design initiatives, shelf positioning strategies, and point-of-sale marketing materials affect consumer behavior. Until now, verifying the effectiveness of these sales and marketing activities could only be done via focus groups, customer surveys, and sales data aggregated at a very high level– again, a very expensive and inefficient means that is often not representative of true consumer behavior. Without actually seeing the true conversion rate in store, how can you assess the effectiveness of these initiatives?

Video technology can track 100% of consumer behavior and measure the most important metric of all – conversion. This allows CPGs and retailers to properly assess the effectiveness of their sales and marketing initiatives – and not only those in store, but ATL activities as well. Furthermore, if companies want to test whether they can then improve conversion rates, they can implement A/B testing to further monitor and verify the strategies and activities that are improving conversions, and select those which optimize conversion rates and average basket sizes in real-time.

CPGs may also decide to utilize consumer traffic information to send their reps or merchandisers to locations which have high consumer traffic volumes, but low conversion rates, as these stores could represent the greatest opportunity for growth. They can work on testing optimizations to product placement strategies, planograms, pricing strategies and supply chain strategies to ensure the product is always on the shelf when it should be, relative to customer traffic times. CPG’s can also better assess the effectiveness of implemented trade promotion programs.

Today, 70% of trade promotions do not generate a positive ROI and it’s not clear whether this is due to an improper design of the promotion or the actual execution itself. Video recognition and analysis provides CPG companies with the insight to properly assess the design of the trade promotion by providing conversion insights. Remember, trade promotions are the second largest line item in a CPG’s P&L, falling only behind Cost of Goods Sold, so it represents a huge expenditure to businesses and a huge opportunity for optimization.

 

How can this technology provide consumer goods companies and retailers with a competitive advantage?

By knowing which marketing activities, merchandising strategies or supply chain models are meeting their purposes, and combining that with the ability to react quickly on underperforming strategies, CPGs and retailers can gain a tremendous competitive advantage. By understanding the seasonality of visits and footfall at a very detailed level – not only monthly or quarterly averages, but an actual read of each particular store, by time of day, including rush hour traffic, by day of the week, weekends, by day of the year and holidays – CPGs and retailers can finally understand shopping patterns like never before. They can assess whether the marketing spend, merchandiser focus, or supply chain models deployed properly match consumer behavior. Investment of resources can be focused on those initiatives where the greatest ROI is attainable.

 

Does video analysis provide any benefits to consumers?

Today’s consumers want shopping to be a positive, easy experience – getting products they need, when they need them. If you’re a customer and the product you’re looking for is not on the shelf, you’re going to do one of three things – either buy a different product, not make a purchase at all, or go to a different retailer – all of which can result in a missed revenue opportunity for CPG companies and retailers.

With a better understanding of customer traffic trends and conversion rates, companies can more accurately forecast the future and implement processes which are optimized to meet the demands of their customers, while concurrently enhancing the customer experience so when that same customer comes in looking for that particular product, it’s on the shelf right where it should be.

 

How do you see this technology advancing in the future?

This is truly an exciting time to be in offline retail and trade. The Internet of Things will optimize the way traditional brick and mortar retail is managed, providing the same capabilities to this channel that are available in the online world. Solutions in the brick and mortar world will provide a means to fully measure, understand and optimize in real time to the needs of the customers.

We’ve seen how understanding consumer behavior at the deepest of levels has led to the online success of Amazon. With superior analytics, the e-commerce giant understands their customers in ways that no offline retailer does. Now, they’re starting to apply this same philosophy to the offline channel with the launch of their Amazon Go store concept.

To compete with the likes of Amazon, traditional brick and mortar retailers will have to adapt and implement such technologies now. And so as not to be left out of the opportunity that this technological revolution provides, CPGs will have to react and adjust as well. Those who do it first will reap the benefits, while the followers may not be around, as they may quickly be overtaken by the online players who deploy their online capabilities to the offline world.

Thank You

Thank you Maciej for taking the time to share your thoughts with us today.

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Thomas R. Buckley
Chief Executive Officer, StayinFront

As the CEO of StayinFront, Tom Buckley is the driving force behind the company's vision and growth and has built a team of top-flight managers and strategic alliances with key industry partners. With a vision of leveraging technology to solve business problems, Tom founded StayinFront in 2000. He has grown the company into a leading global provider of SaaS-based mobile field solutions in the life sciences and consumer goods industries with successful deployments in over 50 countries across six continents.