
The Most Powerful Sales Tool at Lowe's: Satellites - 1337biz
http://www.businessweek.com/articles/2014-02-26/lowes-most-powerful-sales-tool-satellites
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maxerickson
The actual information is less exciting:

 _Laura Champine - Canaccord

Good morning. Thanks for taking my question. Your close rate performance was
impressive, how do you measure that?

Bob Hull - Chief Financial Officer

Laura, so a couple of different ways, so of late, we have been using satellite
imagery. So we take pictures of parking lots throughout the course of the
year. We max that up with actual transaction counts in stores. Of late we have
been actually using some technology that involves traffic counters in the
stores, which gives us close rate by day, by hour, which is going to further
allow Rick and the team to optimize labor going forward. We have tested both
methodologies for the same stores and got similar results. We are pretty
comfortable with the methodology. It allows us to forecast and see actual
improvement in close rates_

From the earnings call:

[http://seekingalpha.com/article/2051323-lowes-companies-
ceo-...](http://seekingalpha.com/article/2051323-lowes-companies-ceo-
discusses-q4-2013-results-earnings-call-transcript?page=7&p=qanda&l=last)

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gadders
>> "A little creepy? Yeah. Smart? Definitely."

Is it creepy? They're only looking at car park occupancy in aggregate. They're
not tracking car number plates.

~~~
protomyth
I don't get the creepy either. It seems like an ok plan to judge volume[1] of
traffic compared to sales. Might even do some analysis of what vehicle types
are going to the store.

1) I am with other posters and would have put up security cameras and done my
count that way

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dmd
I'm puzzled why they would go to the expense of using real time satellite
imagery for this, versus mounting a camera on a light pole in the parking lot.

~~~
kfcm
This is the exact same thought I had when reading the story.

Not only would it be cheaper, but you could follow each vehicle through the
lot and figure out the traffic flow patterns better.

Plus, to tie in with this other front-page story (
[https://news.ycombinator.com/item?id=7346629](https://news.ycombinator.com/item?id=7346629)
), you could track the plates of the cars, and tie that in with retail
cellular tracking (
[https://news.ycombinator.com/item?id=5154089](https://news.ycombinator.com/item?id=5154089)
). Facial recognition still needs a couple of years. Over time, you could tie
the cellular phone, vehicle, and electronic payment (debit or credit card) to
an individual.

Continual tracking.

And all brought to you by technology. In the words of Pogo: "We have met the
enemy...and he is us."

~~~
k2enemy
That, and you can see the parking lot on cloudy days too.

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joebo
Why not track how many times the entrance/exit doors open or close? Or add a
laser(?) that cuts across the entrance that counts each time it's line is
broken. Directional but also simple to do.

~~~
Naga
A lot of companies do this actually. Sure its not perfect, but it gives a good
enough estimate.

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rollthehard6
It doesn't sound like it would make sense to do this given that stores
generally have counters on the readers that detect stolen tagged items on
exit. Surely it would be easier to use this data to figure out when the busy
periods fall?

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mrfusion
How about if a hardware chain used satellite imagery to detect new structures
being built, like sheds, barns, etc, and mailed targeted coupons out to the
property owners?

~~~
TheCraiggers
Isn't that a bit late in many respects though? The holy grail for a hardware
company would be knowing when a person was _thinking_ about building a new
shed, barn, etc, not when they've already bought all the wood and nails to
begin construction.

That said, we already know they're trying their damnedest to track just that.

~~~
vailripper
Isn't permitting info in the public domain? I wonder why they don't leverage
that?

~~~
TheCraiggers
A good question. My assumption is that even though it's considered public
knowledge, there is still a cost for it and it's not electronic.

For instance, in my state and/or township one can go to township office and
request a copy of all the property taxes for any piece of land, no matter who
owns it. It costs something like ten dollars and in return you get a hardcopy
with a bunch of numbers on it.

Assuming the process for getting copies of new permits is similar, the biggest
downside is cost for the information and paying for some intern or whatever to
type it in. Even if it's five dollars plus intern is decent chunk of money (I
have no idea what the profit margin is on lumber, etc). And then you have to
factor in the cost of the promotion which will eat into yet more profits.

~~~
drone
In Houston, it's electronic and searchable. See:
[http://www.cohtora.houstontx.gov/ibi_apps/WFServlet?IBIF_ex=...](http://www.cohtora.houstontx.gov/ibi_apps/WFServlet?IBIF_ex=online_permit_start)

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incision
Neat.

Satellite imagery isn't terribly expensive and Lowes has 1830 stores.

I'd bet it's a lot more efficient in the end to just buy a consistent set of
images for X stores of interest, X times a year than worry about the
installation, maintenance of location specific concerns of cameras/sensors at
every store.

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mkmk
Kroger uses infrared near the checkout lines to similar effect:
[http://www.timesdispatch.com/business/retail/infrared-
techno...](http://www.timesdispatch.com/business/retail/infrared-technology-
cuts-kroger-checkout-time/)

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squigs25
really cool? yes. Impractical? probably?

Scanning earth using satellites is really cool. Maybe they're outsourcing this
to a central company, and paying a hundred bucks per store per month. fine.
But to be honest, there are some more effective low tech ways to catch these
numbers, for example by looking at the number of transactions, or installing
sensors on every entrance to count the number of people entering.

Seems like they're shooting a pigeon with a cannon.

~~~
kej
>But to be honest, there are some more effective low tech ways to catch these
numbers

Heck, just have someone count cars and write down the time whenever they
retrieve shopping carts from the parking lot.

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suprgeek
"Satellite imagery" is the most powerful Sales Tool?

I understand the need for "link-baity" headlines but this is flat-out wrong.
The very same article goes on to state some numbers - 1% improvement vs 2%
reduced labor.

If they can attribute it ALL to Satellite Tracking as opposed to say other
promotions/general economy & barring other accounting tricks, it is still too
little to be even attributable.

~~~
lostlogin
At the hospital I work at we correlate 'sales'in a similar way. Just we found
a cheaper way. We noticed that at night less people come in. So we reduced
staffing at night.

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gstar
I don't understand why they don't correlate EPOS, door and aisle counters, put
it in their data warehouse, and have precise close rate based on 1) visits 2)
store departments

I'd have thought this was totally standard practice!

Still though, really cool that they have confidence that satellite imagery is
a good proxy for this.

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rickdale
Hm, what the article doesn't say is that Lowes are typically located near Home
Depot. Definitely close enough to get a snapshot of competitors parking lot
too.

