Retailers are trying to catch up with their online counterparts by using new tools for tracking shoppers in brick-and-mortar stores. These businesses are gathering the same kinds of analytics that Internet retailers can get using cookies.
The efforts don't always go smoothly.
Nordstrom, for example, deployed technology in the fall to track customer movements by following WiFi signals from their smartphones, according to The New York Times. "But when Nordstrom posted a sign telling customers it was tracking them, shoppers were unnerved," the NY Times said. The retailer ended the experiment in May, in part because of customer comments.
Nordstrom's experiment is part of a movement by retailers to gather data about in-store shoppers' behavior and moods, using video surveillance and signals from their cellphones and apps to learn information as varied as their sex, how many minutes they spend in the candy aisle and how long they look at merchandise before buying it.
All sorts of retailers -- including national chains, like Family Dollar, Cabela's and Mothercare, a British company, and specialty stores like Benetton and Warby Parker -- are testing these technologies and using them to decide on matters like changing store layouts and offering customized coupons.
While customers accept this kind of tracking online, they're pushing back in brick-and-mortar stores, says the NY Times, which connects the issue with Edward Snowden's leaks about government surveillance. " '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."
The NY Times described technology from companies including RetailNext, which uses video footage and data from smartphones to track customer movements. In another example, Brickstream sells a $1,500 camera that separates adults from children, and counts people in different parts of the store. And Realeyes analyzes facial cues to detect how happy shoppers are.
Synqera, a start-up in St. Petersburg, Russia, is selling software for checkout devices or computers that tailors marketing messages to a customer's gender, age and mood, measured by facial recognition.
"If you are an angry man of 30, and it is Friday evening, it may offer you a bottle of whiskey," said Ekaterina Savchenko, the company's head of marketing.
Great idea! If a guy's angry, the best thing to do is get him drunk, too!
The backlash against this technology is baffling. It's not like surveillance in retail stores is anything new. Customers are already being watched closely in retail establishments, and have been for decades, by security guards, salespeople, and hidden cameras. This new technology doesn't introduce anything new into the retailer-customer relationship. It's just a new tool for doing that which has always been done.
Fortunately, retailers can win consumers over to the benefits of this technology with time, patience, and trustworthiness. If retailers are simply transparent about the technology, use it to benefit consumers, and don't abuse it, consumers will get comfortable with these tools, just as they have with Internet shopping Ė- another once-new technology initially viewed with alarm by some consumers.
Not all the objections to this technology are privacy-based. VentureBeat calls the embryonic trend a "big mistake," because it ignores the real problem with retail: "The in-store experience is typically really, really awful."
Tracking customers' in-store activity doesn't help if customers aren't coming to the store, and might even alienate customers, says VentureBeat.
For retailers, the goal shouldn't be to emulate Amazon and envy its data and price-driven hegemony -- it should be offer a very different experience from Amazon: More human, more comfortable, and less about viewing customers as sacks of data and more as, well, people.
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ó Mitch Wagner , Editor in Chief, Internet Evolution