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Brick-and-mortar stores have long been envious of the amount of data and shopper information that their online counterparts are able to collect.  Last fall, Nordstrom announced that it was going to use Wi-Fi signals to track customers’ movements around the stores from their smartphones.  Nordstrom’s initiative was part of a much larger movement with retailers like Family Dollar, Cabela’s, Benetton, and Warby Parker using Wi-Fi signals, video surveillance and apps to learn about customers including gender, how they move around the store, how many minutes they spend looking at an item, etc.  Retailers are hoping that this information provides insights on how they can best maximize store layout as well as offer customized coupons.

Article 8RetailNext, a retail software provider, uses video footage to show how shoppers navigate a store.  RetailNext uses data from customers’ smartphones to determine more specific patterns, as well as recognize returning customers.  RetailNext can also use data to map how shoppers travel through the store.  Brickstream, an Atlanta based company, uses cameras to watch customers and determine what aisles are popular and how long people have to wait in line.  Realeyes, based in London, uses cameras to analyze facial cues for responses to customers’ happiness levels at the register and while shopping. Nomi, a software company in New York, matches a customer’s phone with the customer’s behavior in the store.

However, while customers seem to be willing to put all of their personal information out in cyberspace, many of them are bristling over the perceived intrusion at a physical retail location.  Consumers think that with an online cookie, retailers don’t “really” know who the customer is; but the idea of being “stalked” in a store is somewhat creepy to some customers.  Scientists think that what really “creeps” customers out isn’t the privacy violation, it’s what retailers might infer from physical observation.

Some customers, though, are willing to trade privacy for deals.  For example, a new app called Place, asks customers where they are in a store in exchange for cash or gift cards.  Over half a million people have downloaded the app and provided information like gender, age and income as well as agreeing to be tracked over GPS and Wi-Fi networks.  Placed then sells the data to retailers.

Discussion Questions:

1. What can retailers learn from tracking customers’ movements in stores?

2. How is tracking customers movements in stores different than doing it online?

3. How do you feel about a store tracking your movements in its stores versus on its website?


SOURCE: Stephanie Clifford and Quentin Hardy, New York Times, July 14, 2013