Twenty years ago, Herb Sorensen had his great flash of insight into how people shop. The researcher of customer behavior sat in his living room leafing through an old Time-Life book, when a picture of cars moving through an intersection caught his attention. The headlight beams crisscrossed in the dark.
Those cars could be shoppers, pushing carts around a store, he thought. The beams, captured by time-lapse photography as an intricate web of white lines, could show the paths the shoppers take as they maneuver their carts through aisles, searching for cereal or mustard or a quick-cooking casserole mix to fix for dinner.
“I could see all the lines moving, and I wanted to see, where do people really go, and what do they really do,” he remembers. That has led to work that “has been rewarding intellectually beyond my imagination.”
Yet only in the last year has Sorensen, who holds doctorates in biochemistry and biophysics, seen the technology emerge to make this dream come true. Its a wireless system called PathTracker that Sorensens company developed in conjunction with the WhereNet Corp. of Santa Clara, Calif., which helps companies manage “mobile resources.”
Systems such as that used by luxury goods retailer Prada use radio waves and antennas in tags to determine when an object has passed a given point. WhereNets technology takes the radio approach a step further, following an object around, anywhere within a 250-foot radius of an antenna. Its Real Time Location System can show where the object is at any given moment, within 10 feet, depending on the environment.
Using PathTracker, Sorensen realized most people in the Thriftway Store in Troutdale, Ore., where he lives, prefer to shop the aisles starting from the back, not front. That pattern had escaped him in all the years he tracked shoppers with pencil and paper. Now, Thriftway displays that advertise daily or weekly specials point toward the back of the aisles.
“Id tried to track these movements manually, but it was too hard,” Sorensen says. “Were uncovering secrets hidden in plain sight.”
Merchants are hungry for the data that researchers like Sorensen can provide, even without a guaranteed return on investment. Kroger, which acquired two big chains in the Pacific Northwest where Thriftway competes, for instance, manages to clear just 2.2 cents of net profit on each dollar of sales. Independents, like Thriftway, have to scratch for every possible advantage in such a climate.
The Store of the
The Store of the Future
IBM is experimenting with several new technologies in a store-of-the-future laboratory in Raleigh, N.C. Sensors in the ceiling follow the infrared radiation people emit as they move. Systems behind the sensors can distinguish between individuals and families, to differentiate group behavior. On the floor itself, sensors that recognize faces, combined with voice recognition and authentication software, allow researchers to point to a vending machine, speak an order, and pay with a wireless phone, using Bluetooth technology.
Even though consumers may not know all the ways their behavior is being monitored, the idea is to make shopping easier.
“The way people live is changing,” says Daniel Hopping, a consulting marketing manager for IBM. “Time is more important now than anything else, so in actuality the consumer is changing faster than the retailer can change his system.”
Soon every object and piece of clothing will have a paper-thin wireless chip embedded in it, a step beyond the antenna tags that Prada now affixes to the goods it sells in its Epicenter store. Thats according to Stephen Bjorgan, vice president of technology development at France Telecom R&D in South San Francisco. This will help not just keep track of customer preferences, but also help retailers with security and post-sale service.
Back at the Troutdale Thriftway, sensors attached to the bottoms of grocery carts feed signals to antenna scattered around the store. With customized software, these determine the carts locations within five feet. The positions are sent back to a database, where PathTracker can plot customers paths on a map of the stores floor. Then, it can attach data scanned at checkout to determine which products were purchased by which carts on which paths. PathTracker also can determine the time and distance of a shopping trip, and the amount of time a cart spends in a particular spot.
All this lets a researcher like Sorensen figure out a products “eye-share.” By assuming that a customer looks in the direction of his cart and knowing the location of individual products, PathTracker can even calculate the angle at which a customer appears to see and become attracted to a product.
To make shopping more considerate, a “congestion matrix” relates the number of carts at a given place to the time spent buying a product. That leads to insights such as: Baby food should be located in an area with little traffic so parents can linger comfortably over the many little jars bought for their newborn.
Sorensens work is inspired by Paco Underhill, an environmental psychologist in New York who observes customers around the world. Underhill is at the forefront of creating a science around what causes individuals to desire—or reject—a product on store shelves.
His company, Envirosell, hires trained researchers who spend days with pencil, paper and video cameras making meticulous observations of how customers spend time in stores. His 1999 book—Why We Buy, The Science of Shopping (Simon and Schuster, 1999)—has been through 15 international editions, based on observations such as the “butt-brush effect.” Here, stores can boost sales by making sure products aimed at female shoppers can be examined at leisure, without the risk of being touched on the backside by passersby.
Sandy Swan, director of marketing for Dr. Pepper and 7-Up, finds research by Sorensen and Underhill invaluable, although he cant quantify results.
He now understands that he can boost sales for Thriftway if non-cola drinks are displayed alongside Coke and Pepsi products, rather than away from them. Thats because Dr. Pepper is more of an impulse purchase.
“Its just one more bullet in our gun to be able to maintain shelf space,” he says.