The impact of RFID and self-scanning on market basket analysis: The advent of location-based marketing

Most marketing research is dedicated to the study of consumer behavior: how do customers travel within a store, what is the optimal location of each product, which packaging is favored,.... Based on practical experiments, the marketing department will then decide to adjust these various parameters of the store to increase sales. Currently, one of the main limitations of marketing research is the cost that is associated with it as manual intervention is often necessary to collect the required data. For example, to see how customers wander through a store, marketers will follow a representative sample of the customers and record the path followed. Such approach is labor-intensive and subject to various errors. Some recent technological innovations could significantly decrease the cost of marketing data collection. In this paper, we discuss the consequences on market basket analysis of two such technologies: RFID and self-scanning.