Striving for a Greater Knowledge of the Consumers’ Minds

August 22, 2015 |  by

For everyone associated with the retail industry, an insight into consumer behaviour is worth its weight in gold. From one on one interaction to online surveys, a variety of methods are employed to gain a deeper understanding of the customers’ purchase pattern. Following is one of the many experiences one can have as a result of such an activity.

Modern pizza owes its origin to Naples where this flat bread became a poor man’s staple at some of point time in the Middle Ages. But today, pizzas are relished worldwide across all economic strata. They are served with generous toppings of bacon and eggs in Australia, barbecued paneer in India, manchego and chorizo in Spain and so on. Without a considerable understanding of the demography and tastes of the consumer, such localisation of an age old recipe would not have been possible. But research into such behaviour patterns, both for qualitative and quantitative analysis, requires very sophisticated techniques.

Understanding Consumer Intentions Online

Marketers and retail analysts use various methods to track the habit and surfing pattern of the internet users. Cookies, browser fingerprinting, social network usage etc contribute to a massive pool of data prepared to understand consumer behaviour and, eventually, attract prospective buyers. Similar data are also collected from digital tv viewers and users of one or multiple wi-fi devices. Internet of Things (IoT) or Internet of Everything (IoE) is providing further impetus to this process of collecting relevant and interpretable data.

IoT to Win the Hearts of New Age Customers

Though IoT as a conception is older than two decades, its use in online retail or ecommerce industry is still evolving. Following are some of the reasons of its new found popularity:

  • Falling Costs of Hardware – The costs of GPS sensors, microchips etc are getting cheaper at an inversely proportional rate to their mechanical capabilities.
  • Intelligent Machine – Machines are fast becoming more interactive. Machine-to-machine (M2M) communication is no longer an alien term in the retail industry. On the contrary, if Vodafone’s (1) forecast is anything to go by, then by 2020 an estimated 50% of all companies are going to have fully operational M2M technology in place.
  • IoT Platform Low cost and even open source IoT platform have made capturing the data with connected devices easy. And also it allows integration with analytics platform to analyse the data for meaningful insights.
  • A Connected World – Both wired and mobile connectivity have improved a lot in the recent years. This eases the challenges associated with reaching distant markets and measure behavioural aspects of prospective customers there. The potential of growth and optimisation are almost exponential in this increasingly connected world.

According to McKinsey Global Institute (2), in about a decade’s time from now, IoT has the potential to create an economic impact close to USD 6.2 trillion annually. By 2020, IoT revenue will reach an estimated USD 2.6 trillion in Asia Pacific alone, followed by Western Europe and North America contributing USD 2.1 and 1.9 trillion to it respectively (3). What Greg Swimer (VP IT, Business Intelligence, Unilever) thinks today, will no longer remain a sentiment expressed in isolation,

The Internet of Things is an important technological shift for customers, consumers, and our brands. Our ability to explore and learn and innovate around IoT in retail is a key part of our constant thirst for knowledge around our brands – connecting and engaging with consumers.”

Tracking In-Store Consumer Behaviour

Though tracking mechanisms across digital media are many and relatively simple ones, tracking in physical stores always possesses considerable challenge.

  • Increasingly, customers are weary of responding to time consuming and, for them, apparently meaningless polls.
  • Security concerns prevent most people to answer questions that can provide valuable information about their buying habit.
  • Personalisation or one on one interaction is hardly possible in large retail outlets.

So the necessity of a discreet yet unobtrusive way of collecting relevant information is growing by the day.

From online to brick-and-mortar store, the path taken by the customers about to make a buying decision is hardly a straight one. This involves a substantial amount of scouring about the digital channels. Increasingly, customers are frequenting social media, ecommerce and company websites to scan through a variety of available products, performance details, deals and offers, retail outlets and nearby service centres before making a purchase decision and visiting their chosen stores. This makes the process of behavioural tracking even more replete with riddles.

RS Research (4) puts it very succinctly, “On the surface, it should be easier to figure out the value of digital channel investments: consumers’ paths to purchase and conversion rates are far easier to track. But consumers tend to ‘go dark’ when they move between the digital and physical realm.” A report published by Deloitte (5) in 2013 suggested, modern digital technology influences 36% of the in-store retail purchase decisions which is equivalent to a staggering USD 1.1 trillion in financial terms. This number was slated to increase at least by 50% in the following year.

It is somewhat of an irony, that once again it is IoT that steps in to make headways in this apparently difficult to solve situation. With IoT, the physical barriers are no longer an impediment to gain valuable insight into customers’ buying patterns. Armed with latest technology, retailers can look forward to reaching a broader base of target audience. Global business opportunities have already started to open up at a rate never experienced before and new delivery models are being deployed to suit the changing needs.

Technology to Help Peer into Consumer Behaviour

Using technology to track the digitally empowered customers is certainly not a new concept. Smart retailers are already using infrared beams, 3D stereo sensors, wi-fi tracking and Bluetooth Low Energy Beacons to track consumer’s movement in store. Within 5 years of its inception, RFID (Radio Frequency Identification) tags have gained huge popularity. It is actively promoting omni-channel retailing which is nothing but an earnest effort to provide a seamless customer experience. Dr Bill Hardgrave, founding member of RFID Research Centre, believes (6),

“RFID, when used by traditional retailers, could provide the tool, the weapon in their arsenal if you will, to combat the pure online. RFID provides the capability to compete, and it provides that because traditional retailers can finally become omni-channel retailers.”

Despite wide spread use of technology, tracking consumer behaviour at a granular level, without being coarse, offensive or obtrusive, remains somewhat of an elusive dream. Yet, nonverbal behaviour like facial expressions or gestures can provide a significant insight into a person’s buying habit, particularly considering that two thirds of human communication is done nonverbally (7).

Enter Smart Shelf – A New Era of Tracking In-Store Consumer Behaviour
Smart Shelf is a  physical shelf connected with sensors to capture consumer behaviour. Smart Shelf uses the power of  Computer vision and thermal sensors to help retailers successfully and unobtrusively track customer’s intentions. While thermal sensors register the sensory output, Computer vision aim to capture the emotional ones of a potential buyer. The benefits of this process are manifold:

  1. This is not an intrusive way of collecting information. It does not pry on anyone or breaches the privacy that everybody is entitled to.
  2. Customers are already familiar with the presence of in store cameras. They are more relaxed about the usage of such technology and no longer consider it offensive.
  3. In this method, the system working at the backend does not need to record such sensitive information as name, address, social security number and so on that can divulge someone’s identity without one’s consent.
  4. The collection of data takes place real time and ad hoc analysis helps the retailers with insights to design effective planogram and others…
  5. Smart shelf is affordable. This especially matters, considering how retailers are striving to keep the costs down.
  6. Stores can use their existing infrastructure to adopt it. Implementing from scratch does not break the bank either.
  7. A better understanding of consumer behaviour helps retailers to improve their business efficiency more effectively and formulate new ideas to expand the business.
  8. Behaviour analytics will not only empower the retailers today, but will put them on a firm footing when newer technological trends will start knocking on their doors.

It must also be remembered that collecting data forms only the first step in this quest of a greater understanding of consumer behaviour. Harmonising the information acquired from various sources to draw meaningful conclusion in a timely manner poses the next challenge. With sophisticated analytics software already in place, this part seems to be not too big a concern at the moment. Retailers will need to act on it with a sense of urgency. Needless to say, in the ultra competitive retail industry, those currently standing on their toes will sprint miles ahead of others in this race.


  1. Vodafone, The M2M Adoption Barometer, June 2013
  2. Report by McKinsey Global Institute, May 2013
  3. Worldwide and Regional Internet of Things (IoT) 2014–2020 Forecast: A Virtuous Circle of Proven Value and Demand, International Data Corporation, May 2014
  4. Retail Systems Research (
  5. The new digital divide – Digital’s influence on in-store sales, Deloitte, 2013
  6. Auburn’s Dr. Hardgrave Discusses Omni-Channel Retailing & RFID, June 2014 (
  7. Can’t get Through 8 Barriers to Communication, Hogan K & Stubbs R, 2003, Pelican Publishing Company