Tue, Nov 19, 2013 - Page 9 News List

Big Retailer is watching you: Stores seek to match online savvy

High-street retailers are using advanced customer profiling technologies to compete with the growing threat of online stores

By Emma Thomasson  /  Reuters, BERLIN

Illustration:Yusha

The next time you walk into a shop, consider this: You may not be using your phone, but it is giving out a unique signal that the retailer may be monitoring. A face scanner may check your age and gender while sensors pick up your body heat to help locate popular parts of the store.

Consumers have become used to players like Amazon closely following their shopping habits online, triggering targeted product recommendations, advertising and offers.

To counter the online threat, bricks and mortar retailers are playing catch-up, using increasingly sophisticated technology to improve staffing, layout and marketing.

Some people are less comfortable being watched in the offline world, prompting many in the business to promise to use only anonymized and aggregated data unless shoppers explicitly give their permission to be tracked.

However, as retailers get more sophisticated and link the data they collect to loyalty card schemes, shoppers are starting to sign up to schemes that follow their movements in return for targeted discounts and apps that help them find products.

German fashion house Hugo Boss is using heat sensors to help place premium products. Luxury chocolate store Godiva has installed meters to count shoppers so it can match staffing to peak hours and measure the draw of window displays.

“Our customers are trying to run their stores or malls more efficiently,” said Bill McCarthy, Europe and Middle East head of ShopperTrak, the US firm behind the Godiva counters.

“They are just trying to get real smart with data in the way the e-commerce guys are smart with data,” he said.

The Chicago-based company says its counters, while not a new idea, helped Godiva’s store in London’s Regent Street improve customer service and hone its window displays, boosting transactions by 10 percent in six weeks.

As retailers seek ever more information, ShopperTrak has been investing in high-tech video and phone tracking systems to analyze how customers and staff behave inside a store.

“The information that we collect is strictly anonymous. We make extra efforts to ensure we keep nothing that is potentially personally identifiable,” McCarthy said.

Tesco, the world’s third-biggest retailer, drew criticism from British privacy groups earlier this month with plans to scan the faces of queuing customers to determine their gender and rough age to better target adverts.

The company, which put the tracking of customer behavior on a whole new level with its Clubcard loyalty card two decades ago, said it would not record images or store personal data.

Its advisers say some other retailers are less responsible.

“Too much is happening without consumer consent,” said Simon Hay, chief executive of Dunnhumby, the customer science company owned by Tesco that is behind its loyalty scheme.

“You have to be transparent with data, tell people what you’re doing with it and why and give them something in return,” he said.

That has long been the philosophy behind loyalty schemes, which are getting ever smarter as retailers link data from more sources. British shoppers now access an average of six loyalty schemes via their mobile devices compared to four in their wallets, a survey by mobile payments firm CloudZync showed.

Even if a customer does not use their smartphone while in a store, retailers can already deploy Wi-Fi signals to track their location to within three meters, said Darren Vengroff, chief scientist at US data company RichRelevance.

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