2013-07-16

Retail Stores Are Tracking You Like Crazy

Using Wi-Fi data-scraping and camera surveillance, retail stores are getting into the data accumulation game just in time to haunt a newly privacy-aware public.



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]




Add New Comment

2 Comments

  • Stephen B

    You just received a positive pregnancy test, and call your best friend. She shares your excitement, and sets a date take you "fantasy shopping" what would you buy for your baby (or yourself) if you could afford it. You think it's a game, she sees  baby-shower in your future.  You get to the store, and she ducks away for a moment, returning with a scan gun. You ask, and she says it's just to check prices. It can do that, but she's using it to build your "Baby shower Registry." As the two of you walk through the store, you visit departments that you haven't been to before (although your friend has, she has a toddler or two at home).  She seems to be checking prices on a majority of the things you look at. She know cribs, and points out the pluses and minuses of each, finally suggesting an upper-middle priced model (the price is posted, why bother scanning it?). When you're done with Target, you go to Toys R Us, and repeat the experience. complete with scanning gun. You friend says that the gun tells her about upcoming sales, but doesn't share any information it gives her with you.

    Target and Toys R Us now both know that you are expecting (and if your friend knows the gender of the child, they know it too). You will soon start receiving coupons you had never received before - disposable diapers, diaper rash ointment, ans nursing supplies. The circulars in the mail will include enough "fluff" (lawn mowers, barbecue equipment, etc. that it won't seem targeted, but it is. Your friend WAS doing you a favor (if you've ever attended a baby shower, you will appreciate the magnitude of the favor). However, she (unwittingly)  painted a target on your back.  You are a first-time parent. Your shopping habits are going to change more in the next several months than they have at any time in your life. Stores will bend over backwards to ensure that they are "on your list" when things settle down.

    If you pay for a purchase with anything other than cash, the store will trace the card or check, and know that "you" made the purchase.  If you have a loyalty card, that makes it even easier.
    This isn't necessarily a bad thing for us, but it's a windfall for stores.  Target knows that your baby is 4, and you start getting coupons for "Big Wheels" (or whatever they've evolved into), followed by bikes (and all related safety gear) soon after.  Toys R Us will be tracking your family as well.  Every store you shop at will notice if you start buying diapers (or nursing pads or anything related to newborns). Add a single (superfluous) bathing suit, and they'll have the gender. Your new baby is in their system, and you'll have coupons for the eldest as (s)he starts Kindergarten just as your younger child needs training pants, and coupons for those particular items appear in the same add circular (with a coupon for a floor jack between them).

    About that "floor jack." Assume the above events occurred as described. After you and your friend went to Target, you received a bunch of coupons specifically for newborn items.  Your reaction would be the opposite of what they wanted - something like "how dare  they pry into my private life?" Their ad fliers have always included "baby stuff" so you don't notice that this particular flier is almost half "baby stuff" By throwing the specials on Snow Tires and potato chips between the targeted ads, you don't notice it.

    This type of marketing is not, in and of itself, a bad thing. There is a trace of altruism in offering people with specific needs (e.g. new parents) discounts of those items.

    My complaint is that retailers bend over backwards to hide the fact that, for every byte of data that the NSA has on us, they have (at least) a half-dozen k-bytes.

    Yes, the Government is "spying" on our on-line activities.  But it's nothing compared to the data collection of corporations that we accept without question.