Watching the Shoppers

"Tagged" shopping carts reveal purchasing patterns in retail outlets

Santa Clara, CA  April 3, 2002  Ever get the feeling that someone is watching you? Ever get that feeling in a grocery store?

Guess what, you could be right. At least that's what WhereNet and Sorensen Associates are hoping.

WhereNet, a provider of wireless supply chain visibility solutions, has formed an alliance with retail research company Sorensen Associates to provide tracking applications for consumer packaged goods (CPG) retailers and manufacturers.

Sorensen used WhereNet's wireless Real-Time Locating System (RTLS) to develop a system, called PathTracker, that electronically tracks and analyzes the paths and behaviors of shoppers. The newly christened partners said the resulting analysis of this data will enable retailers and consumer goods manufacturers to identify flaws in merchandising and make subsequent improvements to store design to more closely meet the needs of shoppers.

"For an industry that resorts too often to trial and error when merchandising products, retailers will be armed with a powerful new merchandising optimization tool as a result of our alliance with WhereNet," said Herb Sorensen, founder and CEO of Sorensen Associates.

The PathTracker system features active radio-frequency "WhereTags" mounted on shopping carts and baskets, a local infrastructure of WhereNet antennas inside the store that receive transmissions from the tags every few seconds, and WhereNet visibility software that receives the location information from the antennas. The system uses this information to calculate and record in the database the shoppers' specific locations as they walk through the store, analyzing shoppers' traffic patterns and time elapsed in certain aisles or in front of specific point-of-purchase displays.

By integrating data of a shopper's "trail" with the positional coordinates of all products in the store and product purchases from checkout scanners, the PathTracker post-processing statistical methods yield research in the form of tables, charts and graphs.

"We have always said that one of the most powerful aspects of our technology is what end-users do with the data after it is captured by the WhereNet architecture," said Matt Armanino, vice president of business development for WhereNet.

Sorensen has already conducted a pilot installation at a Thriftway store in Portland, Ore., where the system showed that 50 percent of shoppers who visit the store are there only for a few minutes to pick up a few items. Armed with this knowledge, store managers developed a "convenience store" format near the store entrance to better serve these customers. In another case at Thriftway, products having very low "conversion" rates (that is, products that shoppers pass by, rather than those that make shoppers stop and buy) were moved out of a high-traffic area to make room for salty snacks that have both high interest and high purchase rates.

"With WhereNet's ability to feed accurate data into the system, PathTracker has truly opened our eyes to a whole new way of merchandising our store to better serve our customers," said Ron Woodin, store director for Thriftway. "Since installing the PathTracker system last year, we have been able to analyze customers' shopping patterns, and remerchandise and redesign the store layout accordingly to increase traffic flow in slow areas, and maximize shelf and aisle space in other areas. Already, our sales have picked up as a result of Thriftway utilizing this breakthrough wireless technology."