Jul 16, 2013

    Shoppers, the store's stalking you

    LIKE dozens of other brick-and-mortar retailers, Nordstrom wanted to learn more about its customers - how many went through the doors, how many were repeat visitors - the kind of information e-commerce sites like Amazon have in spades.

    So, the company started testing new technology that let it track customers' movements by following the Wi-Fi signals from their smartphones.

    But, when Nordstrom posted a sign telling customers it was tracking them, shoppers were unnerved.

    "We did hear some complaints," said Ms Tara Darrow, a spokesman for the store. Nordstrom ended the experiment in May, she said, in part because of the comments.

    The company's experiment is part of a movement by retailers to gather data about in-store shoppers' behaviour and moods, using video surveillance and signals from their mobile phones and apps to learn information as varied as their sex, how many minutes they spend in the candy aisle and how long they look at merchandise before buying it.

    All sorts of retailers are testing these technologies and using them to decide on matters like changing store layouts and offering customised coupons.

    But, while consumers seem to have no problem with cookies, profiles and other online tools that let e-commerce sites know who they are and how they shop, some bristle at the physical version.

    Nordstrom said the counts were made anonymous and aggregated. Technology specialists, though, said the tracking is worrisome.

    "The idea that you're being stalked in a store is, I think, a bit creepy, as opposed to 'It's only a cookie - they don't really know who I am'," said Dr Robert Plant, a computer-information-systems professor at the University of Miami School of Business Administration.

    Some consumers also wonder how the information is used. Still, physical retailers argue that they are doing nothing more than what is routinely done online.

    "Brick-and-mortar stores have been at a disadvantage compared to online retailers, which get people's digital crumbs," said Mr Guido Jouret, the head of Cisco's emerging-technologies group, which supplies tracking cameras to stores.

    Why 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"? asked Mr Jouret.

    Meanwhile, cameras have become so sophisticated, with sharper lenses and data processing, that companies can analyse what shoppers are looking at, and even what their mood is.

    For example, Realeyes, which analyses facial cues for responses to online ads, monitors shoppers' happiness levels in stores and their reactions at the register.

    If these methods seem intrusive, at least some consumers seem happy to trade privacy for deals.

    Placed, a firm based in Seattle, has an app that asks consumers where they are in a store in exchange for cash and prepaid gift cards. Placed then sells the data collected to store owners, online retailers and app developers.