Swarm Shopping: The Simulation of Herd Behavior

Supermarkets have two opposite goals: retailers want to keep the customers in the store as long as possible, customers want to leave as soon as they’re done shopping

More profit and sales are the number one priority for every manufacturer to live, succeed and stay in business

Two ways:

1. out?store tactics (direct mail, etc.)
2. in-store tactics (bargains, everyday low prices, limited offers, etc.)

They looked at real-time datamining, i.e., while customers are in the market

Impulse shopping: pure impulse, reminder impulse, suggestion impulse, planned impulse (sale or bargain)
Impulse shopping accounts for 40% of all shopping in supermarkets (wow!)

He keeps skipping past interesting-looking slides

People have a natural tendency to follow the crowd ? knowing what is being purchased by other people in real-time will affect others to purchase the same product

Ideally the implementation of our model can provide customers with a better shopping experience and retailers with a higher sales level, thus easing the tension that we described earlier between the customers’ and the stores’ goals

Using RFID shopping carts, provide users with real-time information about popularity of items, real-time, personalized offers based on what they’re currently buying

The Swarm-Moves simulator attempts to capture the collective average choice that customers are taking ? no need to worry about WHY (age, sex, status, pay, etc.), just WHAT

Database contains the inventory of swarm mall (the virtual supermarket)

120 products with various attributes

Customers do not care about others’ purchases until it reaches a certain threshold

Goes through the simulation and the equation that produces suggestions, based on that threshold

Swarm model is able to increase sales by 29% over just using discounts and promotions

How will people trust the system? The supermarket can just add ‘cheaters’ to influence the count. So they tested that, and found that they would need as many cheaters as customers in order to influence the system! Not feasible (KC note: it’s really a silly argument. No customer will ever investigate the technology to find out that level of detail — they’ll either trust the system or they won’t. And in the end it may not even matter — everybody knows laugh tracks are fake but we still laugh louder and longer if they’re used.)

Effective marketing tool for supermarkets to increase their sales volume based on collective choice of customers

Environmental information can be used to influence customers to buy more on impulse

Future work: Addition of multiple entrance and exits, combine bargains, effect of other factors, like price, weight, size, etc.

With RFID, amount due is already prepared when you get to the front of the store

KC: I think this guy could be a billionaire in the next year or two…

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