The Effect of Product Placement on Shopping Behavior at the Point of Purchase : Evidence From Randomized Experiment Using Video Tracking in a Physical Bookstore

Physical retailers are increasingly trying to understand in-store shopping behavior in order to increase sales. However, measuring and analyzing shopper behavior at the point of purchase in physical retailing remains challenging. In this paper, we implement an in-vivo randomized field experiment in a physical bookstore. We leverage video tracking technologies to monitor how shoppers respond to random book placement, which induces random search costs. More specifically, we randomize the position of newly released books on the top of a large table with several rows and columns such that each book's search cost becomes independent of the book's characteristics. We use advanced 3D cameras and vision-understanding algorithms that can track human motions in real-time to overcome the large costs associated to large-scale video data. Our experimental results show that on an average day books placed at the edge of the table are both picked and taken more often by consumers than books placed in the center of the table. However, the likelihood of taking a book that was previously picked is on average similar for books placed at the edge and at the center of the table. In other words, books at the edge of the table sell more only because they are, on average, picked more often. Therefore, search costs in our physical setting are essentially shaping the search decisions of consumers and they are sunk for the purchase decisions. Armed with this knowledge, the bookstore manager may maximize profit by placing books with higher margins at the edge of the table