The key to Amazon’s success has been its "users also bought" follow-up service made possible by the accumulation of shopper data—and now, retail stores are trying to beat Amazon at its own game.
Using various techniques, from smartphone Wi-Fi signal tracking to security camera facial analysis, department stores are keeping tabs on customer movement and habits to gauge and improve customer experience. This can be as simple as improving the layout for customer flow or combining movement data with cameras to gauge customer moods—and offer products to match.
Realeyes, based in London, which analyzes facial cues for responses to online ads, monitors shoppers’ so-called happiness levels in stores and their reactions at the register. 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.
Although a recent Nordstrom’s experiment with "customer tracking" came to a halt after customers complained about the in-store signs alerting customers that they were being tracked, other companies quietly track data that customers don’t even know they’re sending. If a customer’s smartphone is set to passively search for Wi-Fi networks, their movement can be tracked within a 10-foot radius, even if they don’t connect to a Wi-Fi network. As each phone sends a unique ID code when searching for networks, companies can even track return customers—or how many wander past the store without going in. Though this passive accumulation of data seems a violation of privacy, retailers defend its practice as an intelligent substitute for online visitor metrics.
"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?"
Of course, some retailers are acquiring customer data voluntarily via branded apps that offer deals and coupons. In return, the app accumulates personal data to build a customer profile, tracking her time within the store and where the customer spends it. If the customer hovers around shoes, the app relays that information to the retailer and they might send the customer a footwear coupon.
Customer volunteering of information is a more democratic vision of data collection than passive accumulation, but with the attention on global Internet privacy, retail experiments in local data might be too small a fish to fry for privacy advocates.
[Image: Flickr user Andrew]