US customers wary of being tracked in physical store

By July 17, 2013
surveillance screen in a supermarket

Technologies that track and measure in-store customer behavior are getting better and better at what they do. However, it appears that not all consumers are happy about such practices.


Over the last few years, a number of startup companies have been developing technology solutions designed to provide retailers with increasingly precise and efficient consumer analysis. A New York Times report, published Monday 15 July, reveals that a growing number of brands and retailers are in fact using such tools to enable them to monitor what customers do while they are at a store – their progress along the aisles, how much time they spend looking at one product or another and so on – and even to examine their gestures and facial expressions. In the United States, huge shopping malls and retail brands such as Nordstrom, Benetton and Philz Coffee use this type of service, either on an ongoing basis or by way of a test, in an attempt to understand their customers better. Although hardly any surveys have been carried out into how customers feel about the increasing use of such monitoring practices, the New York Times report points to some nervousness on the part of customers.

WiFi signals and video surveillance

There are various different ways of studying in-store customer behavior. Palo Alto, California-based Euclid Analytics, which claims to be the ‘Google Analytics’ of the real world, uses a system which detects the WiFi signal from customers’ smartphones to record their presence and analyze their behavior.  The system can work out whether customers have already been to the store, whether they go into the store after first looking at the shop window, and so on. RetailNext, another Californian startup, uses video footage to analyze the way a customer moves through the store, as does Atlanta-based retail footfall analyst Brickstream. The purpose of these technologies is to obtain as exact figures as possible on in-store traffic and purchasing behavior and to use this data to help retailers adjust store layout and product display in order to increase sales.

Wariness largely centers on bricks-and-mortar outlets

The Euclid Analytics statement on privacy explains that its system only picks up a WiFi signal generated by mobile telephones, which under no circumstances enables the company to get hold of users’ personal information – neither their real identity nor the data in their smartphones. Nevertheless, many consumers seem wary. The large fashion retailer Nordstrom has decided to stop using the Euclid Analytics system following negative reaction from customers to a sign at the store entrance informing them that the store was tracking their WiFi signal. Online shopping services were actually the first to gather and closely analyze customer behavior data. However, as Guido Jouret, head of the emerging technologies group at Cisco Systems explained to the New York Times, it seems that consumers are more nervous about these practices when they take place at physical stores. From this point of view “bricks-and-mortar stores are disadvantaged compared with online retailers,” he points out.

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