Retailers: Cashing in on the Shorter Queue

Waiting in line—during rush hour on the highway, in grocery store queues or at the DMV—ranks right up there with death and taxes. It's inevitable. But retailers are using the IoT to shorten shoppers' wait times while also gaining insights into their interests and needs.
By Mary Catherine O'Connor
Oct 13, 2015

A few weeks ago at Cisco's San Jose headquarters, I visited the networking giant's Internet of Everything Showcase, a laboratory that develops and tests a range of Internet of Things technologies for clients. One of the projects that Shaun Kirby, Cisco Consulting Services' chief technologist, and Ben Varghese, an emerging technology consultant at the company, showed me is aimed specifically at reducing wait times for shoppers at a big-box retailer, the name of which they said they could not disclose.

The approach that the retailer is testing involves mounting location beacons (the tests involve Wi-Fi tags made by Ekahau) under shopping carts and then using Cisco Wi-Fi access points mounted throughout the store to track their movements. This type of application has been used to improve store layout for many years (it's easy to find examples in the RFID Journal archives).

On its own, this technology could help the retailer improve the planogram to ensure that best-selling products are easy to find, or to place promotional items at locations where shoppers are likely to congregate. But the Wi-Fi tag mounted on the carts also has a sensor with "the ability to listen for infrared-based beacons that have been placed at checkout lanes," Varghese says. "When the cart sensor 'sees' a beacon located at a specific checkout lane, we are able to correlate the position of the shopper with the transaction log currently being opened." This allows the retailer to link the shopper's path through the store to the items he or she buys. "This shows the conversion rate for different departments versus the time spent browsing those departments," Kirby explains. "We can ascertain the effectiveness of merchandising and promotions and improve conversion."

Cisco and the retailer did not stop there, however. They took this experiment even further, by correlating customers' Internet searches—assuming that those individuals are using smartphones logged onto the store's Wi-Fi network—with their location within the store (based on the cart) and the section in which they are shopping.

Kirby says that if such a shopper is browsing for competitive prices, the retailer sees the item in question and what the competition is charging. By examining these searches in aggregate, the retailer can detect the items for which its customers are doing the most active price comparisons, and then set prices that match or beat those of online competitors. Retailers are also increasingly analyzing sentiments about the stores that shoppers express on social media, he says, and are then using that information to guide merchandising decisions. In addition, the company looks for topics that shoppers search frequently, as guideposts for opportunities for improving in-store information displays to "provide assistance with product decision-making."

While peeking into shoppers' searches is an intriguing way to try to boost sales, it is the wait-reduction techniques that could have a quicker payback. Aside from using Wi-Fi tags and infrared beacons to track shopping cart locations within the store, Cisco is working with retailers to leverage traffic sensors in parking lots and inventory trackers in refrigerated cases—because cold or frozen goods are usually the last items shoppers select before heading to the checkout counter.

Not only can all this data help retailers to better anticipate demand at the checkout aisles and thereby reduce shoppers' wait times, it can also help them better allocate labor. That big-box store Cisco is working with? Kirby says it expects to reduce annual labor costs through the use of these technologies, to the tune of $500,000.

Mary Catherine O'Connor is the editor of Internet of Things Journal and a former staff reporter for RFID Journal. She also writes about technology, as it relates to business and the environment, for a range of consumer magazines and newspapers.

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