You can tell when a powerful new technology, like tracking people as they shop, is coming of age. It starts trying to persuade people it is a force for good, and it broadens its reach and capabilities. Take the the observation and data collection techniques used by online retailers that are now moving into the physical world.
Cellphone signals, special apps and our movements tracked by software-enhanced cameras in stores are the equivalent of the tracking cookies in Internet browsers. Most people donât seem to mind being tracked online, if the low percentage of people who disable cookies is any indication. (Studies suggest the number is below 10 percent.) Offline tracking, though, still seems to be a concern. Nordstrom discontinued using one mobile phone tracking system, produced by Euclid Analytics, after shoppers complained. That may be because the systems are new, and some people see more harm than benefit from the surveillance.
On Tuesday, several companies involved in offline tracking announced that they would be working with a Washington-based research group, the Future of Privacy Forum, to develop a series of âbest practicesâ for privacy controls for what it called âretail location analytics,â or tracking.
Euclid was among the sponsors, along with WirelessWerx, Mexia Interactive and ShopperTrak.
The Future of Privacy Forum is primarily supported by corporations, with extensive financing from the technology sector. According to Jules Polonetsky, its director and co-chairman, the organization also has an advisory board that includes âchief privacy officers, privacy academics and privacy advocates.â
On Thursday, Euclid also announced it was producing a series of analytics tools for specialty retailers, which it said would help stores make better decisions about things like operating hours and inventory. The product, which is primarily a comparison tool, also shows how rich the data from tracking people online can be.
âWeâre offering benchmarking, so we can say âYour customer capture rate is 8 percent, and this week the average for your sector is 10 percent,ââ said Will Smith, the chief executive of Euclid. âThe question is not whether something is good or bad, but what something means.â
Mr. Smith would not provide specifics, but said his companyâs product was now in hundreds of malls across the United States, and had captured information on thousands of shoppers at dozens of retailers. âWe can tell if someone has visited multiple outlets of a store on the same day, which indicates they couldnât find the product they wanted at the first one,â he said. âYou can assume a lot of others went to a competitor.â
Mr. Smith emphasized that the data Euclid supplied to retailers was made anonymous and delivered in aggregated forms, which he said made it unsuited to personally identifying customers. But the data gathered by the company, which Mr. Smith founded with the former head of Google Analytics, can be used to determine things like whether a Starbucksâ customer with a loyalty card stays longer at the coffee shop, or how often a store is acquiring repeat shoppers.
Over time, it is likely that at least some customers will accept tracking, particularly if offered incentives like free mall parking in exchange for visiting a specific store. âPeople became used to Web analytics,â Mr. Smith said, âAmazonâs customer experience is 10 times better because of the data it gathers on people. Shorter lines and good in-store service can also come from data.â