Retailer Uses RFID, Social Media and Cameras to Track Shopper Behavior

By Claire Swedberg

ISA Boutique is utilizing the hybrid solution to identify which products are of interest to shoppers, as well as where inventory is located and when it requires replenishment.

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ISA Fashion Boutique International Ltd., a seller of international luxury brands in Hong Kong, mainland China and Macau, has deployed an RFID-based inventory-management system provided by Hong Kong IT services company PCCW Solutions. The system enables the retailer to track the locations of products, engage with customers, learn their preferences and reduce labor costs based on inventory counts. The solution, known as Infinitum Retail, includes IP cameras as well as ultrahigh-frequency (UHF) RFID readers. As a result of the improved inventory management, the retailer says that it plans to deploy the system this year at all 11 of its stores. Alpha Solution Ltd. installed the technology.

Traditionally, RFID has had limitations since it can track a tagged product, but not necessarily link that item with a particular customer, explains Jacky Ting, PCCW Solutions’ digital practice leader. By itself, RFID cannot enable a store to forward product information and promotions to shoppers. However, by linking RFID data to closed-circuit television (CCTV) camera images and social-media sites such as Facebook, a retailer can identify where shopper traffic is heaviest (using a camera-based heat map), understand how an individual responds to a product (by tracking the expressions on his or her face) and monitor comments that its customers make on social media (with their permission), using the store’s Wi-Fi network.

The reader built into an ISA store’s EAS gate can capture the ID number of a customer’s RFID-enabled loyalty card, prompting the Infinitum Retail software to send promotional offers to that individual’s phone, based on his or her previous purchasing behavior.

Infinitum Retail aims to overcome a variety of problems that stores face, says Wing Lee, PCCW Solutions’ senior VP, such as understanding which products interest customers, and then approaching them with relevant offers. ISA Boutique uses camera images only for tracking shoppers’ locations within its stores, Lee notes, while it could opt to use facial analytics in the future to identify each customer’s age, race, gender and response to products based on facial expressions.

In 2012, ISA Fashion first installed an RFID system for counting inventory and tracking product locations at one of its stores with the help of Alpha Solution (see ISA Boutique Tracks Inventory, Shopper Behavior Via RFID). The system, which is still in use, employs tiny RFID labels attached to jewelry, as well as readers installed in display cabinets, to track when goods are on display and when they are removed from a cabinet. After Infinitum Retail was released in October 2015, the retailer began using the system to track all of its products, which also include clothing, leather goods, eyewear and watches, at three shops and one warehouse in Hong Kong, as well as a single shop in mainland China. The new solution includes the use of electronic article surveillance (EAS) hard tags for non-jewelry products.

Infinitum Retail consists of RFID readers built into the EAS gate at the door, as well as a feature known as iR-Furniture—RFID interrogators built into shelves to read tags in real time. The system also includes readers installed at checkout terminals. In the warehouse, readers are used to identify when goods are received and then shipped to a store.

At the warehouse, an EAS hard tag with a built-in EPC Gen 2 ultrahigh-frequency (UHF) RFID inlay is attached to each product other than jewelry. The inlay is read at the warehouse for inventory purposes, and the cloud-based hosted software is automatically updated to indicate, for instance, if a tagged item has been shipped, as well as to which store and when this occurred.

Upon arrival at the store, some goods are placed on iR-Furniture shelves, where they are then tracked in real time. Those items consist of products other than the small jewelry that is monitored via the jewelry-tracking cabinets which the retailer first deployed last year. In the sections of the store in which iR-Furniture is used, readers capture tag ID numbers until an item is removed from the display. The software identifies that action and can issue an alert if the item is not returned to that location or purchased, says Tafe Tsa, Alpha Solution’s director.

Additionally, after a store closes at the end of the business day, employees can log into the software to determine whether all products are on the iR-Furniture shelving, instead of having to check every item one at a time.

Jacky Ting, PCCW Solutions’ digital practice leader

Customers also carry RFID-enabled loyalty cards so that they can be recognized as they arrive at the store. This enables them to receive offers on their smartphone, based on their location within the building.

The reader built into the EAS gate can capture the ID number of each customer’s loyalty card and forward that data to the hosted software, which identifies that shopper’s buying habits based on a record of coupons redeemed and purchases made by that individual. The software forwards offers and coupons to that individual’s phone, based on his or her previous purchasing behavior.

When a customer brings a tagged product to the cash register at the point of sale, a counter-top RFID reader captures the ID number of that item’s RFID tag, links it to the product’s stock-keeping unit (SKU) and removes that item from the inventory list. An employee then detaches the hard tag from the object. In that way, as the individual walks out of the store with his or her purchases, the EAS gate is not alerted. That data enables the store to replenish a product as soon as it is purchased or taken off the premises.

CCTV cameras are used to identify where shoppers travel within the store, and where they spend the most time. The software can then compare that information with sales data in order to determine which items are attracting attention, as well as whether they are being purchased.

Because shoppers often interact on their phone while making a purchasing decision, the store also wanted to be able to know what was being said about their products online. Therefore, customers can use the store’s Wi-Fi network, but must first provide their social network ID so that the retailer can view comments about its products between shoppers and their friends. Once a customer attempts to connect with the in-store’s Wi-Fi access point, a Web link pops up on that person’s devices, asking him or her to connect with the retailers’ social-media platforms, such as Facebook, Twitter or WeChat. The shopper is then directed to the corresponding social-media application. Once customers “like” or “follow” the retailer’s social-media platforms, they can then use the in-store Wi-Fi.

Adopting Infinitum Retail enables ISA Boutique to have a deeper understanding of customers’ demographic and behavior, Tsa explains. The data analytics provides the retailer with the information it needs to design effective marketing campaigns, he adds.

Wing Lee, PCCW Solutions’ senior VP

According to Lee, ISA has reported that its use of Infinitum Retail has led to an increase in sales amount and volume, while reducing costs due to the decreased workforce required to track inventory. Since the system was taken live at ISA Boutique, he says, the retailer has reported increased operational efficiency and sales, as well as decreased expenditures thanks to a reduction in human resources.

Infinitum Retail also has a facial-analytics component, though ISA Boutique is not yet using this feature. With the system, the CCTV camera captures an image of a person’s face and passes that photo to the Infinitum Retail software’s video-analytical algorithm so that it can estimate demographic information, such as gender, race, age range and expression (such as smiling). “For the sake of accurate analytical result,” Lee states, “the CCTV or camera should be located in the area of sufficient lighting and [be] able to capture the front side of the whole faces of customers.” That information would help the retailer to understand what kinds of customers are interested in a product, he explains, and to ascertain their level of interest based on their facial expressions.

IR-Furniture read data can be paired with this facial-analytics data to identify which items customers pick up. Infinitum Retail has been launched since early October 2015, Lee says, and ISA Boutique is among its first customers.

“In the IoT era,” Ting says, “our major focus should be placed on the utilization of solution and information under the customer-centric business environment.” He adds that “understanding customers’ behavior and needs can help retailers with the market share.”