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Old-school security cameras tracking customer behavior

December 19, 2011

Polling customers to track shopping behavior is out; security cameras with tracking software are in.

Until recently, "stores have been a black hole," Alexei Agratchev, chief executive officer of consultancy RetailNext, told Business Week. "People were convinced something was true and (were) spending tens of millions based on that" without evidence to back it up.

RetailNext, founded in 2007, can change that, according to Agratchev. The company helps retailers build systems to better understand customer behavior. In most cases, the company relies on the video from a store's existing security camera system. That feed is run through RetailNext's software, which analyzes the video and correlates it with sales data. The software can also integrate data from hardware such as radio-frequency identification (RFID) chips and motion sensors to track how often a brand of cereal is picked up, for instance, or how many customers turn left when they enter a store.

The goal, Agratchev said, is to define which variables affect a purchase and make changes accordingly. For example, a store might deploy more salespeople, alter displays or put out red blouses instead of blue, according to a story on Bloomberg.

The company now has 40 retailer clients, including American Apparel and Family Dollar, and another 20 are testing the systems.

Read more about consumer behavior.