Is a mall that tracks its shoppers really that big of a deal?

Famed department store Nordstrom recently implemented shopper tracking on premise to learn more about its customers.  It used WiFi signals from people’s smartphones to track their movement and see how many were repeat visitors.

When the establishment made visitors aware of the tracking, people were appalled, filing one complaint after another, abruptly ending the experiment.  And this isn’t the first time a retailer has used technology to know better understand consumers.  Some establishments use WiFi signal tracking as well as cameras to understand what makes people interested in particular products, and what drives them off.  Cameras may be used to discern contextual data like facial expressions, which infer customer satisfaction or dissatisfaction with an item’s price.

But how is a retail store tracking shoppers different from online stores tracking online shoppers?

“Brick-and-mortar stores have been disadvantaged compared with online retailers, which get people’s digital crumbs,” said Guido Jouret, the head of Cisco’s emerging technologies group, which supplies tracking cameras to stores.   Jouret questions why retail stores shouldn’t “be able to tell if someone who didn’t buy was put off by prices, or was just coming in from the cold?”

According to a survey conducted by Accenture Interactive in December 2012 of 2,000 US and UK shoppers, 86 percent of respondents say they are concerned about websites tracking their online shopping behavior, while 85 percent are aware that such tracking goes on but understand that tracking enables companies to present offers and content that matches their interests.  Some 64 percent stated that it is more important that companies present them with relevant offers, against only 36 percent who say companies should stop tracking their website activity.

Based on the results of the survey, it seems shoppers are not entirely thrown by being tracked online, as long as these online retailers give them better offers.  Which makes it all the more interesting that shoppers are so opposed to being tracked in brick-and-mortar stores.

Why online, but not in-store?

The primary reason people aren’t too keen on being tracked in stores is because the purchases are being tied to a face, unlike online shopping wherein a name is the only physicality tied to a purchase.  Learning that someone is watching you and knows how you look like – it all feels like you’re being stalked, and that’s a creepy way to shop.

And this is the exact thing happening with Target.  A father was outraged when his daughter received coupons in the mail for baby clothes and cribs, accusing the retailer of promoting teen pregnancy only to find out that his daughter was indeed pregnant and Target’s system only sent out the coupons based on his daughter’s purchase history.

Target assigns Guest ID number to each of their customers which is tied to a consumer’s credit card, name, or email address.  This then creates a bucket of history for each consumer and where Target bases its targeted offerings.

Target’s use of consumer information is just one example of how retailers, online or brick-and-mortar, is forcing us to rethink retail.  Today, a more personalized shopping experience seems to be more important for shoppers rather then maintaining their anonymity.

Joining Kristin Feledy in this morning’s NewsDesk is Wikibon Principal Research Contributor Jeff Kelly to give his Breaking Analysis on how some retailers may be taking these technologies a bit too far.

Kelly explains that retailers would give anything to be able to deliver real-time targeted ads by using facial or mood recognition cameras.  They could use the information gathered to deliver real-time text to consumers at retail stores, like when a person picks up an item, but when he sees the price, he is turned off by it.  Before he can put the item back, he receives a message stating there’s a 15 percent discount if you purchase the item now.  Retailers would rather make a sale with a discounted price rather than not making a sale at all.

Unfortunately, the biggest hindrance in this is the creepiness factor for the shopper.

“People don’t necessarily like the idea of… their movements being tracked, let alone their internal thoughts and feelings,” Kelly starts.  “This is a balance that retailers and others that use this type of technology are going to have to grapple with, and figure out where that happy medium is between using the technology to their benefit without really going too far and creeping out customers and potentially having a backlash against them in using that kind of technology.

“Of course, I think at some point, policy makers are going to get more involved in this discussion in terms of setting rules and regulation and laws about what type of technology can be used, when it can be used, the type of notification you’ve got to give to people if they’re being watched — that kind of thing.  There’s a lot of potential, as I’ve said, but there’s also risk of a backlash,” Kelly stated.

For more of Kelly’s Breaking Analysis on this new data practices, check out the NewsDesk video below: