In-store analytics: tracking real-world customers just like online shoppers


A big advantage for online retailers compared to brick-and-mortar retailers is that they see exactly what their costumers do on their site. For example, the online retailers can see which products costumers have considered before they bought something. Brick-and-mortar retailers are now looking for more sophisticated ways to understand customer buying behaviour and want to take advantage of tempting insights from technology and data analytics (Techrader, 2015).

One of the ways to do this is by tracking customers with Wi-Fi hotspots and surveillance video cameras. The combining data gathered by those two technics creates detailed information of customer behaviour going into, and moving around the store. This data will be brought together with sales systems and transactions data to “build a picture of how well a store front serves to bring customers in, where shoppers go within the store, whether the layout makes browsing easy, if checkout queues are losing customers and other insights into customer shopping habits and needs” (Techradar, 2015). People do not need to connect to the Wi-Fi hotspot of a location to obtain the location data. When you leave your Wi-Fi connection active, your phone will effectively leave a digital footprint, his MAC-address. By adding the content from the cameras, the information becomes more granular and detailed (like making gender and age profiles). But also reactions and emotions of shoppers can be tracked. This is off course very useful information for a store to decide were to place specific products or how customers experience the sales force.

What do you think, will this be a big thing in about 3 years? And is this even possible with the current privacy laws? Is there a possibility that shops will lose customers by implementing this technology in their stores? Maybe people will accept this because they are used to being tracked on the internet and they do not care anymore.

Reference:

http://www.techradar.com/news/world-of-tech/future-tech/in-store-analytics-tracking-real-world-customers-just-like-online-shoppers-1286293

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10 responses to “In-store analytics: tracking real-world customers just like online shoppers”

  1. 359775rs says :

    Reading this article reminds me of a youtube channel called ”Surveillance Camera Man”. This individual walks up to random people and starts taking a video of them. Needless to say, the people being videotaped are not amused and sometimes get very angry. When asked to explain his actions, he simply says “It’s OK, I’m just recording video.”Cameras are everywhere already. This one just happens to be held by a person instead of mounted on a wall or traffic light. Technology blogger Brian Hall writes that what the man is doing may simply be a taste of the “upcoming brave new intrusive world,” in which people wearing cameras like Google Glass and Memoto will be able to photograph or film you simply by pointing their body in your direction (Source: http://petapixel.com/2012/11/02/surveillance-camera-man-points-camera-at-strangers-without-permission/).
    I think the same goes for stores keeping track of your every move, it seems to be part of our new world. Whether we want it or not, this will keep happening unless we pass a law that severely restricts this.

  2. euclidh says :

    Thank you for the nice post. I actually know for a fact that some big retailers in the Netherlands (and probably internationally) are already experimenting with this technology.
    I love information technology and all the advances/advantages it brings us. To be perfectly honest I can condone companies such as Google knowing my every move (online, and to a lesser extent offline) because they offer me free services that I find valuable (increase my efficiency etc.).
    When considering offline retail shops however; the advantages provided to me personally will probably be in the form of mere discounts (and personalized marketing), while the advantages for the retailers themselves (data-mining my behaviour) are a lot more profound.
    Since the main objective of these offline (retailing) stores is “making sales”, and not providing me with free services; I do not apply the same rationale as that I do to Google. I believe that if shops decide to use these kinds of in-store analytics they should make this very clear to customers (before these customers enter the store). If they do not explicitly state this “feature” and I find out about it on my own; it is not only a reason for me to personally boycott that specific store, it is also a reason to spread negative WOM publicity about that store. I believe it would personally drive me to shop at stores that do not employ this technology (albeit these shops are more expensive). However, more price-sensitive consumers will of course have this reaction to a lot lesser extent than myself.
    I believe that companies that want to employ such a technology should be careful in practice, they must offer their customers some profound, explicitly stated beforehand, advantages to counteract the negative emotions (related to privacy) that certain consumers will feel.
    Though my post may seem rather negative towards this technology, it is merely because I am considering further advancements of this technology in the (further) future. I see a “minority report” style society, where I am walking down the street getting personalized advertisements from 360 degrees around me “shoved down my throat”; no thank you.
    I might be biased and could be overestimating the customers negative reaction; as I said earlier I have no problem with online observational learning, though I did have my reservations about this also in the past. Maybe this is part of our “new enhanced world” and I should shut my mouth and accept it.
    p.s. also consider that these stores will probably sell (or share) all the your data with other 3rd parties if we do not regulate these kinds of technologies.
    Euclid Haralambidis

  3. victorvink says :

    Very interesting read this article about the analytics. You are asking if the tracking of customers will become big in the following years, I believe it will, due to the big advantages of brick-and-mortar retailers. They way they receive useful information about the customers entering the shop of the retailers gives them information about the customers on how they have to approach the customers. Adjusting your approach to your customers happens all the time, with the constantly changing demands and changing trends in the shops.
    However as you stated the privacy laws are becoming stricter and therefore they are having a big negative aspect on this technology. From a customer point of view I can imagine the concerns of their tracking data. Many examples can be given where customers do not want their shopping behavior out in the open, or saved in some data warehouse.
    But looking at the future, and without the law risk factors, I believe customer do not really have an option any more. On internet shops customer will not be able to shop without tracking and the implementation of in-store tracking will become more popular since more retailers are facing the advantages of tracking their customers. Therefore I we can not escape the tracking technology and just have to deal with it.

  4. micaelarizpe says :

    Interesting read! I was specially interested in the subject because I have worked for a POS marketing agency before. So from an advertising point of view, it got me thinking about what this entials for the POS advertising industry as a whole. Traditionally, it has been found that up to 70% of purchases are decided upon the moment of sale, normally at the retail store. It is interesting to think of what effects online retailing would have in In-Store advertising metrics. On the one hand, it would be interesting to see if these types of media have become somewhat obsolete due to consumer informedness and access to detailed information on products, prices etc. even at the retail store itself through their smartphones. It would be moreover also interesting to see to what extent, and how advertising in on-line retail differs at the physical POP and online.

  5. robbertcornelisse says :

    Interesting topic. When I think about the concept of in-store analytics, I always compare it with Google Analytics (GA). Only now it’s taken offline. For the last several years we’ve seen Google adding new options to the GA platform, and now it’s almost possible to track the entire behavior (inclusive heat maps and “mouse” behavior), so websites can be and are really adapted to this data. For example, if the amount of conversion (e.g. visitors buying your products, downloading your content or leaving their data) is to low, an online marketeer can choose to change the position of his call to action button (CTA) or change their page lay-out in another way that people are more urged to convert. The problem with Google Analytics (and also other website analytics tools such as marketing automation tools) is that they sometimes attach cookies on a website visitor. This means that the online marketeer (or other employee..) can place a tracker on a website visitor, and hereby also interact with this former visitor in a later stadium. For example, the marketeer could make sure that there are adds of the company on the websites that the former visitors visits, or that their sponsored search results in Google (on the right side, not the ones in the middle) are of the marketeers company. This following behavior from the marketeer can sometimes be really anoying for the former visitor, but luckily, the can stop this tracking behavior. Namely by deleting all of their cookies (trackers).

    For now, we now that the in-store analytics tool is only used to analyze the visitor, and not necessarily interact with this visitor later in time. Because every phone has a unique WiFi tracking code, the in-store analytics tools can recognize a visitor when its re-visits a store. So there really is the possibility to interact with this visitor. But what an online visitors not have compared to the online visitor is the option to delete their “tracker” in the system of the store manager. They can shut their WiFi of when they enter the store, but that requires an extra action. Besides, they cannot delete their trackers with retroactively. I think that their should be designed tools that overcome this, tools that give the consumer the option to delete all of their trackers with just a click of a button. Just as you can online.

  6. 371049 says :

    I think the most interesting here is that these in store analytics actually come for free nowadays. The California based company Euclid now provides in store tracking solutions free of charge, with analytics comprising time in the store, frequency of return and as such (Datoo, 2014). This entails that any business could potentially be tracking your every movement through their wifi.

    Why would they offer their services for free? Euclid is trying to push their product to the market so that there is no reason for not installing in store tracking analytics.

    The revenue model of Euclid is based on a subscription which needs a large base of users to be truly beneficial. Whereas the free version only provides information for your own store, the larger version would aggregate data from all stores about a user to try to infer characteristics about him or her.

    Given the advances in Big Data, one can only imagine how these in store tracking platforms could lead to enhancements of in store experience.

    Datoo, S. (2014). How tracking customers in-store will soon be the norm. [online] the Guardian. Available at: http://www.theguardian.com/technology/datablog/2014/jan/10/how-tracking-customers-in-store-will-soon-be-the-norm [Accessed 18 Oct. 2015].

  7. 360608ew says :

    Interesting article! I believe that this could be really valuable for offline stores. However, as you already mentioned it needs a lot of private information of customers. Although it makes me feel a little uncomfortable that this might be the future, I think that it is actually weird that this feels uncomfortable, because this is exactly what is already happening online and I feel like that is pretty normal to all of us. Therefore, I think it might be something that is experienced more common to the next generation. As most of us will experience, our parents and grandparents were (or still are) really hesitant about privacy concerns online and it might be the case that we feel the same way about privacy offline, but the next generation does not. Of course there is no other way to find out, than to wait what is going to happen.
    Next to the fact that it is really valuable to offline stores to collect this data, it might also deliver benefits to us, as a consumer. Stores could for example offer you discounts in case they noticed that you stood in front of the sneakers shelf a long time, but then walked away. Stores could then send you a message that offers you a discount if you buy sneakers today. If this would become the case, then it would actually be precisely the same as online shopping, with the social benefits of offline shopping.
    So, I think this could really be the future. Although we might not yet be ready for it, because of privacy concerns, let’s face the fact that our parent and grandparent felt the same way about the online world. It would just be a matter of time for us to get used to it and to understand that it could deliver value to us, as a customer, as well.

  8. 353958bk says :

    Interesting topic! I believe in-store analytics and sensor technology will be one of the main focus areas in the coming years. Sensor technology is a key ingredient for the “internet of things” systems that are so hyped at the moment. Retailers are already using them for a variety of purposes. Some large retailers for example use sensor technology to determine foot traffic in areas they wish to open new stores in, thereby determining the most lucrative areas. The real-time information gained through sensors can prove to be invaluable. As production costs for sensors decrease, they will likely become ubiquitous. I believe especially for smaller stores they can prove to a source of competitive advantage, as they provide instant insights into consumer behavior, at little cost. I think the challenge will not be mitigating privacy issues, since customers actually can benefit from the technology as well. I believe the challenge will be that since everyone will potentially have sensors and in-store analytics, it will be even harder for stores to use the information in a value-creating way, that serves as a source of competitive advantage.

  9. Mirabeli says :

    Interesting read! I actually didn’t know that retailers are implementing this technology. I do not think privacy concerns will be an issue, since (almost) everyone is already being tracked online-making it hard to hide from advertisers. As a matter of fact, this way of tracking can significantly improve customer experience and have a positive influence on customized promotions. For instance, when a customer subscribes to a retailer’s newsletter, the retailer can send personalized promotions based on the duration of a customer’s hesitation to purchase a product. I think there is a large opportunity for firms to implement this data tracking, making it more and more common in the following years.

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