Tracking a Shopper’s Habits

Tracking a Shopper’s Habits

Infosys’s sensor network turns stores into mini-Internets.

By Michael Fitzgerald  / MIT Review
Monday, August 04, 2008

Infosys may
have solved a $100 billion problem for companies in the retail
business: how to tell whether their promotions really work. In the
process, Infosys has also created the potential for stores and
consumer-goods companies to track things like traffic and inventory in
real time.

Consumers like Procter & Gamble
and the retailers they sell through spend more than $100 billion per
year to promote products in stores, according to Forrester Research.
They pay fees for shelf space in stores, including premiums to have
their products at eye level. They pay for special promotion stands. And
although they pay for armies of checkers to see whether retailers
follow through on the deals, it’s a system fraught with error, says
Forrester analyst George Lawrie.

"Stores make lots and lots of mistakes," Lawrie says, noting that at
many retail stores, the people who stock the shelves may have little or
no interaction with the people who make the promotional deals. "In the
big brands, the CFOs know they’ve had to hand these funds over to be
eye level on aisle number one, and they don’t know if it’s really
happening, and they’re beginning to start to ask if the stores can
prove it."

So Infosys, which counts 12 of the world’s 20 largest retailers
among its current customers, has developed ShoppingTrip 360, a hosted
software application that can track shoppers and inventory, using
wireless sensors placed on shelving, promotional displays, and shopping
carts. The sensors, which use the 802.15.4 wireless protocol to connect
to each other in a mesh network, can send information such as where
shoppers stop in a store, what products they pick up, what they put
back, what they put in their cart, and whether a product is out of
stock. Infosys has also developed an application to let consumers in
the store use their cell phones to get information such as store maps, or to access an online shopping list or collection of recipes.

"This, we believe, is the next wave of innovation in the retail space," says Infosys cofounder and CEO S. "Kris" Gopalakrishnan.
He notes the push by retailers in the 1970s and ’80s to develop
electronic data interchange, as well as the 1990s push into e-commerce.
He says that Infosys is trying to usher in the in-store Internet.

Retailers and consumer-goods makers typically get data on a daily
basis, from point-of-sale scanners. Getting better data about product
sales was a big reason why retailers like Wal-Mart and Target pushed radio frequency identification (RFID) technology,
minuscule radio chips that were expected to replace the bar code on
individual products. But RFID chips remain too costly to be ubiquitous,
and Lawrie says that they may never be. He says that the cost of the
chips, coupled with the substantial amount that retailers would have to
spend to outfit their stores to work with the chips, have limited
interest in RFID.

What’s more, RFID raises privacy concerns that ShoppingTrip 360
might not. Infosys says that its system is completely anonymous, unless
the consumer agrees via cell phone
to tell the system who he or she is (and consumers can opt to identify
themselves based on just their shopping-cart number). Infosys says that
it will pay to install the sensors in stores, charging retailers only
for the data that they want to use.

"I’m charging to tell them when stocks are reduced by a certain percentage, or when a consumer redeems a coupon through their mobile phone," says Sandeep Dadlani, global head of sales for Infosys’s retail unit.

Exactly what the data will cost is not yet determined, says
Gopalakrishnan. He says that Infosys is piloting the system at a number
of large retailers in the United States, Europe, and Asia. Girish
Ramachandra, head of the innovations practice for the Infosys retail
unit, says that it is no harder to install its wireless sensors than to
set up a wireless router in a home. Initially, it will take a week per
store to deploy and test the system.

Infosys says that it is ready to offer three things: "heat maps" of
stores that show levels of inventory, levels of inventory at the fronts
of shelves, and concentrations of shoppers in the store; a smart shelf
pad with a built-in wireless sensor that is powered by the store’s
lights; and a shop-by-cell phone option, which lets consumers get
recommendations or coupons on their phones.

Infosys thinks that there will be many other applications it can
develop for the system, such as a "perpetual checkout" service that
would let shoppers ring up their goods as they put them in their carts,
allowing them to walk out of the store when they are finished shopping.
For apparel retailers, the company is developing smart mirrors that
will recommend combinations of clothing and automatically notify
salespeople to bring things for shoppers to try on. Infosys could
develop an application to let stores employ the sensor networks to
manage energy usage. And it intends to open its development platform so
that other companies can create applications for the service as well.

Forrester’s Lawrie says that without seeing the system in action in
a store, it’s too early to say how well it will work. But if the system
works as promised, he says, "this would be a huge breakthrough."



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