As the variables impacting shopper behavior continue to increase and diversify, retailers want to know more and more about their shoppers to keep them shopping and coming back for more. Online, retailer and e-commerce websites can track and get to know shoppers through a plethora of tactics (i.e. bread crumbs, click-throughs, mouse hovers, shopping carts, favorites, cookies and social media, just to name a few). In-store, loyalty programs have been around for years that enable retailers to collect data about shoppers’ habits. Many shoppers have caught on, connecting the ads they see online to their search habits or the catalina coupon printed at the register for brand X because they bought brand Y the week before.
Theories behind shopper behavior have been driving retailer research and exploration for years. Technology is now enabling the testing and observation of such theories in store on a whole new level. Today, retailers are experimenting with various technology in-store in an effort get more well-rounded snapshots of their shoppers and to bring those tactics for data collection on par with the depth of data that can be reaped online.
The New York Times recently covered this subject with an overview of an experimental tracking system at Nordstrom, which tracked customer movements via the Wi-Fi signals from their smartphones. Nordstrom posted a sign alerting customers of the experiment and ultimately ended the experiment in May 2013, in part because of the complaints.
“Way over the line,” one consumer posted to Facebook in response to a local news story about Nordstrom’s efforts at some of its stores. Nordstrom says the counts were made anonymous. Technology specialists, though, say the tracking is worrisome.
“The idea that you’re being stalked in a store is, I think, a bit creepy, as opposed to, it’s only a cookie — they don’t really know who I am,” said Robert Plant, a computer information systems professor at the University of Miami School of Business Administration, noting that consumers can rarely control or have access to this data.
Some consumers wonder how the information is used.
“The creepy thing isn’t the privacy violation, it’s how much they can infer,” said Bradley Voytek, a neuroscientist who had stopped in at Philz Coffee in Berkeley, Calif. Philz uses technology from Euclid Analytics, of Palo Alto, Calif., the company that worked on the Nordstrom experiment, to measure the signals between a smartphone and a Wi-Fi antenna to count how many people walk by a store and how many enter.
Still, physical retailers argue that they are doing nothing more than what is routinely done online.
“Brick-and-mortar stores have been disadvantaged compared with online retailers, which get people’s digital crumbs,” said Guido Jouret, the head of Cisco’s emerging technologies group, which supplies tracking cameras to stores. Why, Mr. Jouret asked, should physical stores not “be able to tell if someone who didn’t buy was put off by prices, or was just coming in from the cold?” The companies that provide this technology offer a wide range of services.
The article goes on to discuss several companies that are on the leading edge of these new technologies. RetailNext, one such company, uses multiple layers of technology, such as video footage to study shopper navigation and differentiate individuals, smart phone WiFi pings to pinpoint where a shopper is in the store, and mobile device identification codes to identify repeat shoppers and their frequency of shopping. RetailNext can help retailers collect this data to ultimately impact the design of their stores, such as display placement in relation to the shopper path recorded.
Just last week, an European outdoor advertising firm kicked off ads using face detection technology, OptimEyes. This technology promises to enable advertisers to know the number of people seeing their ads and the kinds of people specifically, identifying them by gender and approximate age. According to Todd Wasserman at Mashable:
Amscreen, which has a network of more than 6,000 screens in Europe in gas stations and convenience stores, is using the technology to let advertisers see the results of their ad spends. Such ROI data is common for online ads, but has proved elusive for more traditional forms of advertising, like outdoor and TV… The company isn’t alone in looking to Minority Report-like face detection as a solution for advertising ROI. Last year, Microsoft filed a patent for Kinect that would let advertisers know how many people were using the product at any given time. A company called EyeSee manufactures mannequins for retail stores that use face detection to let retailers assess their traffic.
This area of technology will continue to develop and further push the line. How shoppers will react or adapt to these tactics as they become more main stream remains to be seen. Take into consideration that there are several factors at play here. Some technology gathers data purely through observation, some gather data through submission (think app downloads and email sign ups) and others gather data building off other technology (like smartphones). With that said, some shoppers are participating in the data collection voluntarily, perhaps in hope of a coupon or special sale, while others feel a heated aversion to such tactics and consider any range of these techniques a violation of privacy.
However, I can’t help but wonder if that as generations of shoppers shift and as millennials, who are so accustomed to sharing everything about themselves, grow older, this aversion will become less and less. Until then, as the boundaries of privacy become blurrier and the avenues for retail continue to blossom into more areas of daily life, retailers will have to walk a fine line of learning all they can about their shoppers through technology while not alienating them by trying to learn too much.