Article

How do retail shoppers feel about surveillance?

The eyes in the mannequin just might be watching every move you make.

July 18, 2013

This article was written by retail educator Dr. Chris Petersen, who will be leading a session at this year's Retail Customer Experience Executive Summit. You can get up-close access to Chris and all of our educators in this intense day-and-a-half event, August 13-14 in San Diego.

The headlines are replete with stories about "showrooming" and the migration of shoppers from bricks and mortar to the web. Traditional store-based retailers have seen traffic decline, so they are increasingly concerned about creating a store experience that will convert a sale. The paradox is that e-commerce tracks your "cookies" and knows every page you visit. Stores have historically struggled to track if you came in the door. That's all changing! Aggressive retailers are now using video surveillance and cell phone signals to track your store movements. It's even getting a little creepy … they know if you're a returning customer.

The standard axiom about retails stores is: Location, Location, Location. Retail traffic has always been a critical component of retail success. Traffic X Conversion Rate = Sales. But, even if a retailer increases their sales conversion rate through better experience, they have a losing proposition if store traffic declines due to online shopping.

In a recent post, I highlighted how critical it is for today's bricks and mortar stores to measure customer traffic. And, most retailers still struggle with measuring "footfalls" of customers entering the store. Many retailers are still trying to rely on the archaic technology of "beam break" at the front door to get customer counts. Even if that is relatively accurate, that only estimates how many enter a store. With beam break there has been no intelligence on where consumers go and what they do in store. That's rapidly changing.

Beyond footfalls in store … They're now are "surveilling" where you go

The New York Times had an interesting report on the new trend of retailer "surveilling." Essentially it is a "movement by retailers to gather data about in-store shoppers' behavior and moods, by using video surveillance and signals from their cellphones." Now here is a paradox … those showrooming customers on their smartphones can be tracked to see if they are present. And, shoppers are increasingly "checking in" on their phones and even using retailer store apps. This enables a mountain of in-store shopping data.

But, in-store merchandising is also rapidly changing. Increasingly, the more elaborate end cap displays have embedded video. There are even specialized mannequins available with cameras embedded in their eyes so they can watch you. The key to all of this surveillance is the software to mine the data. With existing surveilling technology today, retailers can tell:

• Where you went in the mall … and within a store
• How many minutes you spent in a given aisle
• Whether or not you looked at the merchandise on display
• The gender of the "lookers" and whether they are young, middle-aged or old
• Which types of customers pick up the merchandise or make an inquiry about it

They have your cookies. Is surveilling you in store a big deal?

There has been some press about the new surveilling and app tracking technology at higher end department stores like Nordstrom and Macy's. But, the Times article reports that surveilling research and pilots are now being done at specialty stores like Cabela's, and even Family Dollar. It can almost feel like your favorite retailer has now become part of the "big brother" network watching you shop.

What most of us don't think about is the amount of information we "give up" for the convenience of personal shopping on the web. Almost all sites use "cookies" which are then embedded on your computer. And, just think about all that information you give Amazon and your other favorite websites when you shop online. By knowing more about you, your preferences, and how you shop, online retailers can personalize the experience. Is tracking you on your mobile phone app and recording shopper presence on video all that different? Many consumers don't seem to have a problem with cookies, but are suddenly alarmed at being videotaped in store, even if their facial features are masked out.

Your trade off: privacy rights vs. a better personalized experience

Make no mistake. Retail stores are in survival mode. They absolutely need to understand store traffic and their consumers in order to create a better experience for customers long term. But, there are also potential benefits for us as consumers as well. Here are some examples from the Times article:

One, RetailNext, uses video footage to study how shoppers navigate, determining, say, that men spend only one minute in the coat department, which may help a store streamline its men's outerwear layout. It also differentiates men from women, and children from adults.

RetailNext, based in San Jose, Calif., adds data from shoppers' smartphones to deduce even more specific patterns. If a shopper's phone is set to look for Wi-Fi networks, a store that offers Wi-Fi can pinpoint where the shopper is in the store, within a 10-foot radius, even if the shopper does not connect to the network, said Tim Callan, RetailNext's chief marketing officer.

The store can also recognize returning shoppers, because mobile devices send unique identification codes when they search for networks. That means stores can now tell how repeat customers behave and the average time between visits.

Be forewarned … the age of surveilling is upon us 24/7/365

Few of us think about how much we are tracked online as shoppers these days. I don't know about you, but I've recently found that if I shop online a couple of places for a specific item, I suddenly find that item popping up everywhere … like it's following me on the web. If it routinely happens on the web, is there any reason why "anonymous" tracking shouldn't happen in-store?

In these days of NSA, government surveillance and Edward Snowden making headlines around the world, there is a very important question for every consumer: Is giving up my personal information worth the personalized service and benefits?

Right now, we as consumers don't seem to have much of a choice. Retailers seem to be plunging forward with new techniques and technology for "surveilling" you. Next time check out that big end cap display, and the mannequins … they just might be watching you shop.

(Photo by Peter Dutton.)