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Home-Improvement Retailer Uses RFID to Improve Store Layout

By providing its customers with active Wi-Fi-based tags, Rautakesko can track their movements and actions, in order to optimize the design of its sales floor.
By Claire Swedberg
Nov 07, 2008Rautakesko, a Finnish retailer of hardware, tools, household appliances and building materials, with stores in Russia, Belarus and six other Baltic or Nordic countries, is employing active Wi-Fi-based RFID tags to obtain information regarding customer behavior, in order to improve the layouts of its stores. The company is using Ekahau's real-time location system (RTLS), which it most recently installed at its Byggmakker location in Trondheim, Norway, and at its K-rauta store in Örebro, Sweden.

By analyzing customers' shopping behavior, Rautakesko hopes to improve each store's layout, in order to draw customers to products that are top sellers, improve traffic flow throughout each store and reduce out-of-stocks. Because Rautakesko operates 320 stores in eight separate countries, each location's layout needs to be tailored to the shopping patterns of its specific customer base—though traditionally, the stores were all built relatively similarly. By improving its understanding of a store's shopping patterns, the company can better determine what the layout should be, says Jouni Jaakkola, Rautakesko's concept manager.

Rautakesko used Wi-Fi-based RFID tags to help it design the layout of its Byggmakker store in Trondheim, Norway.

The retailer undertook its first in-store study in 2006, at its K-rauta store in Porvoo, Finland, where a number of customers wore active Wi-Fi RFID tags around their necks while shopping. The tags transmitted information to wireless 802.11 access points within the store.

In 2007, Rautakesko held a similar study at a newly constructed K-rauta store in Tondi, Estonia, and at another K-rauta location in Örebro, Sweden. Because the Tondi site was newly constructed, the company was able to lay it out based on the specific needs of the earliest customers who passed through the store, according to Konsta Kuokkanen, the firm's project manager. By contrast, the Örebro store had been designed based on an earlier concept, in which all locations were laid out in the same manner. "So this was the first time when we were surveying the old-store concept," Kuokkanen says.

In 2008, the company also began conducting its study at the Byggmakker store in Trondheim.

With each pilot, as customers enter a store, an employee offers them one of 30 Ekahau Wi-Fi tags. About the size of matchbook, each device transmits its unique ID number at a rate of every three seconds. The tag's battery has a life of approximately five years, and can transmit to any Wi-Fi access point. The tag also has two buttons that are not currently being used but that could serve as a customer service request button in the future, says Tuomo Rutanen, Ekahau's VP of business development.

If a customer agrees to wear the tag, the worker inquires about that person's age bracket and inputs that data, along with the customer's gender, into a software application where it is linked to the ID number, as well as the time and date. The shopper proceeds through the store and on to the checkout point, then returns the tag at the exit, where it can be cleared from the system for reuse.

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