the impending in-store marketing revolution - WPP.com

Watching as You ShopRetailing: Big shops are using elaborate technology tomonitor and influence the behaviour of their customersLONDON — In a recent British television commercial, John McEnroe, aveteran tennis star, is seen racing his long-time rival Bjorn Borg arounda Tesco supermarket. After arriving in the checkout queue just ahead ofhis opponent, Mr. McEnroe is distraught to see an employee appear andopen another till, giving Mr. Borg the upper hand. The advertisment endswith a reference to Tesco’s “one in front” initiative, which aims to reducewaiting times by opening additional tills whenever there is more than onecustomer waiting at a checkout. This scheme has been running for manyyears, but Tesco recently updated it by investing in customer-monitoringtechnology supplied by Irisys, a British company.The system, called Smartlane, has two elements: sensors by the doorscount the number of people entering and leaving the shop, and sensorsby the tills work out how fast the queues are moving and how many“shopping units” — groups of people, such as families or couples, whowill make one transaction between them — are standing in each queue.(Shopping units are identified using an infra-red sensor that tracks thetrajectory and behaviour of “hot blobs” when they enter its field of vision;this approach is 95% accurate, says Chris Precious of Irisys.) All thisinformation can then be used to predict how many tills will be neededup to an hour in advance and monitor average waiting times and queuelengths. In Tesco’s case, a line longer than one shopping unit triggersthe opening of another till. Sir Terry Leahy, Tesco’s boss, said last yearthat the monitoring system had reduced waiting time for customers andhelped to boost the firm’s profits.Tesco is not the only retailer using technology to keep tabs on peoplein its stores. Mr. Precious says Price Chopper, an American grocerychain, is in the process of introducing Smartlane; and Marks & Spencer,a British shopping chain, uses Irisys’s infra-red sensors, as doesAbercrombie & Fitch, an American fashion chain. Brickstream, a supplierof customer-monitoring systems based on dual-lens cameras, whichare more accurate than single-lens cameras in tracking and countingapplications, counts big retail chains including Toys “R” Us, Office Depotand Walgreens among its clients.Rather than monitoring queue lengths, however, Brickstream’s system,called BehaviorIQ, is used by retailers to gather data on where theirPublished December 6, 2007customers go, where and how long they stop, and how they react todifferent products. This information can then be compared with thestore’s transaction log to determine the effectiveness of store layout,product fixtures and other variables. In-store designs and marketingcampaigns that work can be identified and improved upon, and thosethat do not can be replaced with something more profitable. Retailers,it seems, are buying the idea that by watching customers while theyshop — what might be called “retail surveillance” — and redesigningtheir shops accordingly, they can get people to spend more.ON THE SHOP FLOOROne of the largest customer-monitoring projects undertaken so far isP.R.I.S.M. (or “Pioneering Research for an In-Store Metric”), a collaborationbetween Nielsen Media, a market-research firm, the In-store MarketingInstitute, based in Chicago, and a consortium of consumer-goodsmanufacturers and retailers including Coca-Cola, Procter & Gamble andWal-Mart. The project, which completed its first big trial in September,involved the use of sensors at the entrance and exits and in some ofthe aisles of 160 stores across America. These sensors recorded dataon customer-traffic patterns, to which was added further informationrecorded by human observers. By comparing the resulting data withsales information, it was then possible to gain insight into shoppers’behaviour.Preliminary results from the P.R.I.S.M. programme included the findingthat two-thirds of shoppers who made a visit to the salty-snacks aislemade a purchase, but the people visiting the dairy aisle were far less likelyto buy something. When observational data on the number of childrenpresent during a shopping trip was taken into account, the results wereeven more detailed: the P.R.I.S.M. results showed that although childrentook part in only 13% of food-shopping trips, shoppers bought morewhen children were with them. Purchase of seasonal items was two anda half times more likely with children in tow, but surprisingly there was nocorrelation found between the presence of children on a shopping tripand higher spending on sweets.Continued on next page5