• The Wall Street Journal, Friday, August 22, 2008 9:30 AM

Marketers are starting to personalize in-store promotions, based on what products the consumer recently picked up or purchased. But that is just the beginning. Soon digital retail ads will also target shoppers based on what they looks like.

In a test in Buffalo, N.Y., people ordering a morning coffee at Dunkin' Donuts see ads at the cash register promoting the chain's breakfast sandwiches. At the pick-up counter, the coffee-buyers see ads prompting them to return for a coffee break in the afternoon.

Thanks to audience fragmentation, marketers feel compelled to make their pitches when consumers are closest to making a purchase: in the store. Most of the experimentation is being done on new digital screens that are appearing in store aisles and next to cash registers. Cameras are embedded in many of these screens.

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