The American clothing chain Nordstrom wanted to get more information about its customers, such as how many of them return to stores repeatedly. That’s why last fall he started testing technology that made it possible to track clients’ movements with the help of Wi-Fi signals from their mobile phones. But he stumbled.
When the company put up a sign warning customers that they were being watched, people got nervous. “We have received some complaints,” company spokeswoman Tara Darrow told The New York Times. Nordstrom ended the experiment in May of this year, and as Darrow admits, it was partly because of those complaints.
Nordstrom’s attempt is part of an effort by retailers to collect data on customers’ in-store behavior using video camera footage and signals from their cell phones and apps that reveal information as diverse as a customer’s gender, how many minutes they spent browsing the candy aisles and how long he looks at the product before he buys it.
Other chains are also testing these technologies. For example, Family Dollar, Cabela’s or British Mothercare, as well as specialty stores such as Benetton and Warby Parker. They then use the results when deciding to change the layout of the store or the offer of customer coupons.
What’s okay on the web is off limits in the real world
Online stores have a similar kind of information galore. But while customers don’t seem to have a problem with cookies, profiles and other online tools that allow e-shops to see who and how they shop, they bristle at the use of similar tools in the real world.
“Way over the top,” one user commented on Facebook after a local press report about the surveillance effort at some Nordstrom stores. The company claims the records were anonymous, but technology experts say any tracking is worrisome.
“The idea of being tracked in a store is a little scary, I think, unlike, say, a cookie — they don’t really know who I am there,” said Robert Plant, a professor of computer information systems at the University of Miami.
What do information stores do?
In addition, some customers worry about how the information obtained is then used. “It’s not the invasion of privacy that’s terrifying, but how much they can get out of it,” said neuroscientist Bradley Voytek, who stopped by the Philz coffee shop in Berkeley, California.
Philz uses technology from Palo Alto, Calif.-based Euclid Analytics, which also worked on the Nordstrom experiment, measuring signals between a smartphone and a Wi-Fi antenna and counting how many people are currently in the store and how many are entering.
However, brick-and-mortar merchants argue that they are doing nothing more than what is already routinely done online. “Brick and mortar stores are at a disadvantage against online retailers who collect the digital crumbs that people leave behind,” said Guido Jouret, head of Cisco’s technology group, which supplies surveillance cameras to stores.
Businesses link video footage with data from smartphones
Companies providing this technology offer a wide range of services. For example, RetailNext uses video footage to study how customers move. For example, it finds that men only spend a minute in the coat department, which can help the store to more efficiently use the space used for these men’s goods. It also distinguishes men from women and children from adults.
RetailNext then adds data from customers’ smartphones to the videos to infer even more specific patterns. With their help, for example, he can determine where – with a small deviation – the customer is standing, even if he does not connect to the local wi-fi network with his phone.
The store can also use this technology to recognize returning customers, as mobile devices transmit a unique identification code when searching for a network. This means that stores can now find out, for example, how returning customers behave and how much time passes on average between their visits.