Using sensor technology to evaluate the effects of a price promotion on store arrival traffic

Abstract

Retailers often evaluate the effect of marketing actions (MAs) on store performance via sales volume, a practice that obscures the role of store arrival traffic as a primary driver of profitability. This paper develops a modeling approach to measure MA-driven traffic surges using sensor-captured, shopper-specific arrival times. Our approach isolates the specific impact of an MA from natural traffic variability by predicting a counterfactual baseline for the arrival traffic during the MA period. Our method provides four key managerial contributions: (i) quantifying true “lift” of the MA beyond natural traffic variability, (ii) diagnosing traffic versus conversion failures, (iii) aligning staffing and inventory with predicted traffic flow, and (iv) using early patterns in traffic as real-time warnings to guide later operational adjustments. We illustrate our method with shopper-specific arrival data from a two-week price promotion that generated 2,880 additional arrivals.