Big Retailer adopts tech to take on online rivals

Written by Reuters | Berlin | Updated: Nov 16 2013, 15:52pm hrs
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 anonymised and aggregated data unless shoppers explicitly give their permission to be tracked.

But 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 West Asia 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% in six weeks.

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 behaviour 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.

That has long been the philosophy behind loyalty schemes, which are getting ever smarter as retailers link data from more sources.

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 metres, said Darren Vengroff, chief scientist at US data company RichRelevance.

Every retailer wants to better understand their customer, said Vengroff, previously the principal engineer at Amazon who helps clients like Wal-Mart, Sears and Marks and Spencer provide more targeted offers to shoppers.

Many consumers are already shrugging off privacy concerns and embracing tracking technology: European retail consultancy Jupiter has seen a 90% opt-in rate for a platform which offers marketing and mobile payments on smartphones.