Grocery stores in the United States and elsewhere have gotten customers used to carrying "loyalty cards" that track their shopping habits in exchange for in-store discounts. The Modiv Shopper, made by Modiv Media of Quincy, MA, takes things one step further. Customers using the device, which works with the store card, can save time by scanning and bagging their own groceries as they shop. Meanwhile, it displays advertising and offers electronic coupons for instant savings, all chosen according to the customer's purchasing history and location in the store. Introduced in July 2007, the Modiv Shopper is now used in 260 stores. The company says customers who use it spend $7 more per trip--and visit the store 10 percent more often--than they would otherwise. Modiv makes its money by licensing and developing its system for retailers and by collecting advertising revenue whenever an offer is displayed.

A. Scanner
The Shopper uses a Motorola MC17 handheld computer running Windows Embedded CE (an operating system designed for low-power devices) and software designed by Modiv. Customers scan their store card to check out a device before beginning their shopping and then use the Shopper to scan the bar code of each item they select. Before they leave, they scan a bar code near a self-­service register and rescan their store card. The list of items in the cart is transmitted to the register, where the customer pays.

B. Radio Module
A radio chip inside the Shopper communicates with Wi-Fi hot spots around the store, triangulating with them to orient itself. (Wi-Fi is more reliable than GPS indoors.) By creating an internal map of the locations where the scanned items are stocked, the device is able to deliver coupons at appropriate points in a shopping trip.

C. Browser Application
Wi-Fi radio enables the device not only to deduce its location but also to receive data stored on central servers in the store. The customer interacts with the device through a Web application built by Modiv.

D. Display
A full-color LCD display allows customers to scroll through a list of items currently in the cart and to view coupons and advertisements for nearby items on the shelf.

E. Data Mining
Each time customers use their store card, information is collected about the shopping trip. Modiv uses the aggregate data to spot shopping trends, and it uses the specific data to tailor promotions to the individual shopper. For example, a soda company might offer coupons to someone who normally buys from its competitor. Other offers might be triggered in real time by a customer's actions. Scanning a pack of hot dogs, say, might prompt a coupon for buns.