Retail stores plan elaborate ways to track you

Retail stores plan elaborate ways to track you

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By John Brandon, FOX News - Bio

Next time you to go Old Navy, you might be in for a surprise.

Retailers are experimenting with a variety of new ways to track you. When you find a new shirt, you might get a message about the matching shorts. Pick up a new pair of Nike golf shoes at a Scheels All Sports store and you might see a discount for a new set of clubs.

Location-based tracking is getting much more precise. New technologies like magnetic field detection, Bluetooth Low Energy, sonic pulses, and even transmissions from the in-store lights can tell when you enter a store, where you go, and how you shop.

Sound like "Minority Report" all over again, right? Fortunately, companies working on the tech have learned their lesson about privacy. In May, Nordstrom 'fessed up to a Wi-Fi fingerprinting technology from Euclid Analytics that can track you without opting-in. The new apps make it more clear that you are giving up your privacy for a good deal.

Josh Marti, the CEO of a customer-tracking company called PointInside, told FoxNews.com that, just last year, tracking was only accurate within 100 feet. Companies often used Wi-Fi fingerprinting to tell when you walked through a department. Now, starting this year, they can track within a few feet. 

One example: a company called ByteLight makes software for the LED lights in a store. The lights transmit a unique signal that the camera in your phone can read. The store can then track your location within about 3 feet. (Bytelight is in an early pilot stage but the technology is in use at the Museum of Science in Boston.)

"It's the wild west of indoor customer location tracking, and no one has emerged as the go-to player," Daniel Ryan, the CEO of Bytelight, told FoxNews.com.

Another upcoming app from IndoorAtlas can tap into your phone's compass to detect minor shifts in magnetic fields -- it's accurate to within 4 inches. Swirl uses low-power Bluetooth transmitters, about the size of a half-dollar and scattered around the store, to connect to an app on your phone. That technology is already in a pilot stage at Timberland and Kenneth Cole stores in Boston and New York.

Why all the tracking? Marti says retail stores need the boost in revenue. While Nordstrom was mostly curious about how customers moved through the store, the new technology can feed discounts, rich product data, and coupons to customers as they shop.

"Retailers that have exhausted their marketing budgets are looking for new opportunities," he told FoxNews.com. "And 90 percent of of all commerce is still in the physical store, not online. The problem is that about 40 percent or more of retail shoppers walk out without finding what they want. But in half of those cases, the product actually was in stock."

In some cases, customers are already comfortable with the tracking. At Starbucks, a loyalty card tracks all of your purchases, but it's worth the intrusion if your next latte is a bit cheaper. An app called Shopkick, which reads a high-frequency tone at the entryway of some stores, rewards you when you visit with "kicks" that help you earn a gift card.

Yet no one is quite sure if customers will respond favorably to the new tracking techniques. It might be a surprise when you realize the store knows you are standing in front of a new John Deere mower and then sends you a discount on lawn fertilizers.

"[People] are willing to provide information such as location to companies if there is a clear value exchange. The opt-in will have to highlight to the consumer that they will be receiving relevant product recommendations based on their locations," said Jennifer Wise, a Forrester analyst covering mobile marketing platforms.

She emphasized that the apps will have to have a strong value to consumers. Otherwise, shoppers might think the store is only tracking them to boost sales.

"If the value offsets the privacy concern, then there won't be an issue," Marti said. "If you're tracking so you can provide [data on customers] to a third party without consent, there's an issue."

The experts said the apps should, at the very least, provide a feature where a customer can turn off the tracking. For example, with Shopkick, you can disable the sonic signal detection. There is a concern, though, that stores might require a customer to use the tracking app if they want to receive discounts. That's not too likely, said David Javitch, a spokesperson for ScanBuy, a company that makes an in-store scanning app.

"It won't be like a bar where you get carded when you walk in," he said. 

In the end, customers will be giving up a lot -- whether this succeeds will depend on what they receive.


Video: FOX 10's Andrea Robinson talks to Improv Media's Jeff Moriarty about why stores are tracking shoppers, how it works, is it a right to privacy issue and is there any way to stop it.

Jeff Moriarty - improvmedia.com
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