Will customer tracking help save shopping malls?

Discussion
Photo: RetailWire
Mar 23, 2017
Matthew Stern

With shopping malls not performing like they used to, facility owners are looking to technology to revive shopper interest. But when it comes to re-mapping the mall to make it more attractive to shoppers, some of the technologies they are using might put some customers on edge.

Some mall landlords have been using smartphone monitoring technology to track shopper behavior throughout the malls they own, according to The Wall Street Journal. Some monitor the amount of time customers spend in the mall and in specific stores to determine where one store should be set up in proximity to another. Landlords also base advertising on location data used in conjunction with social media and email information.

While the Journal article doesn’t detail which specific solutions are used for each example of behavior tracking, it does mention one big U.S. mall owner that uses a tool called StepsAway to push discounts and promotions to shoppers’ smartphones. Shoppers in this case do not need to install an app.

The degree to which customers are said to be comfortable with the use of in-store tracking technology seems to vary from study to study. For instance, a 2014 shopper survey indicated that eight out of 10 shoppers did not want retailers tracking their movements. But a 2015 study by MaxMedia indicated that most customers are okay with anonymous in-store tracking. In that study, almost 50 percent of Millennials said they would tolerate tracking by Wi-Fi, but drew the line at being tracked by camera.

In addition to the “creep factor,” there is, as with all data collection endeavors, the potential concern of how the data is being handled and anonymized internally, and the cybersecurity protocols being taken to keep any valuable and personally-identifying data out of the hands of hackers.

There also remains a question of whether this type of data can be used to redesign mall layouts in a way that will result in meaningful gains in store traffic. Factors other than layout, such as store selection, may be overriding any gains in making malls a popular destination again.

DISCUSSION QUESTIONS: Can malls gain useful insights and become more attractive places to shop using behavior tracking technology? When does tracking shopper behavior go too far in terms of privacy?

Braintrust
"It’s pretty obvious where shoppers shop and don’t shop — and you don’t need high tech to figure that out — just stand there for 20 minutes and watch. "
"I think mall operators know what their problem is — malls have become a pain in the neck, especially the busy ones."
"When it comes to tracking and privacy there is a definite generational gap!"

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18 Comments on "Will customer tracking help save shopping malls?"

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Bob Amster
BrainTrust

While the malls could certainly benefit from tracking customer shopping behavior, the customers should have to opt in to being tracked. Many customers prefer to remain anonymous to all but their favorite retailers and retail environments. That preference should be respected.

Mark Ryski
BrainTrust

Just like retail stores, malls can gain important insights through shopper analytics. And with the general weakening of brick-and-mortar traffic, mall operators in particular should be measuring traffic volume and trends. Tracking shoppers via Wi-Fi signals on smartphones is perfectly fine as long as shoppers have opted in. Just because some segment of the population, like Millennials for example, seem to be OK with being tracked, doesn’t give mall operators the right to infringe on shopper privacy.

Paula Rosenblum
BrainTrust

I think mall operators know what their problem is — malls have become a pain in the neck, especially the busy ones. Because:

  • You’ve got to find a parking space;
  • Hopefully the mall has an app to help you find the stores you want, otherwise you’ve got to find one of those digital boards with a “You Are Here” sign;
  • Stores within a similar category are not always clustered together, meaning the shopper is potentially in for a very long walk
  • Once you find the store you want and maybe the product you want, you have to hope they have it in the right configuration (color, size, whatever dimension the product is made in).

I’m not sure tracking is going to solve any of that and it might actually irritate some shoppers. I don’t think mall re-designs are conceptual rocket science, exactly … but given that they would involve moving multiple stores around, they would be an execution nightmare.

Max Goldberg
BrainTrust

Behavior tracking technology without consumer permission crosses a line of privacy, especially when it is used to push offers to consumers. Besides, simply tracking consumer behavior is not going to reverse the slide in mall traffic. Malls need to look at why they exist, what they offer consumers and the benefit to consumers of the overall mall experience.

Dr. Stephen Needel
BrainTrust

Probably not as useful a tool as it sounds. It’s pretty obvious where shoppers shop and don’t shop — and you don’t need high tech to figure that out — just stand there for 20 minutes and watch. No matter how you lay out a mall, some stores are going to be in fringe areas. I don’t think the tracking is ever a threat to privacy IF it’s done anonymously or with the person’s active permission.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Knowledge is powerful and consumer journey mapping can and should bring value to the patron, mall stores and the operator. In particular when the visit can improve the experience of discovery and leisure, while adding to the guests perception of return on time, analytics provide insights into the design of that experience. Privacy is only violated when engagement is imposed on the consumer with limited value to the visitor. And there is the challenge. Consumers don’t like to be treated as a broad demographic. The wider the aperture of distinction, the fuzzier the relevance (and suitability) at the edges.

Steve Montgomery
BrainTrust

I agree with Mark. Just because Millennials, many of whom share everything with everybody, are willing to be tracked doesn’t mean I or others want to be. I much prefer to remain as anonymous as I can fully realizing that it is impossible on the web.

For those malls and companies that want to track me, my expectation is that the information gained from what happens inside their locations is far more important than what someone does in the mall in general. Retailers know, or should know, what differentiates them from their competitors and their competitors from them.

Mohamed Amer
BrainTrust
As stated by several of my fellow BrainTrust colleagues, transparent collection and use of private data is a must, so I will focus on the first part of the discussion question. Malls are facing an existential challenge and need to rethink their role and function at the end of the second decade of the 21st century. Their original model was valued around convenience, efficiencies and an expanded choice set for consumers. Across those values, the mall today is slowly being replaced by online marketplaces/aggregators such as Amazon and eBay. Retailers’ own online shops, to the extent that they don’t integrate the store into the complete shopping experience, can also work to reduce mall traffic. The business model of anchor stores, which provide stability and lifeblood to malls, are coming under attack. This landscape calls for much more than behavior tracking that sheds light on what happens once a shopper enters the mall. My sense is that mall and store operators know this information already, but maybe seek confirmation or hope for some surprising insight. So… Read more »
david salisbury
Guest

Big Data is everywhere, but how to make it actionable and to make those insights translate into better shopping experiences? Any store in a mall or boutique can get a (Dor) traffic counter and in the retail age of customer analytics, the more data and the more insights the better.

As we enter a retail of connected devices, the loyalty, personalization and location marketing that these tools afford soon will translate into some ROI for store margins. Though probably not enough to save the mall.

Many believe mobile sign-in via QR codes or video and facial recognition are the easiest ways to personalize offers in real-time. It’s only a matter of time before we opt in to such retail environments. All stores will eventually be like Amazon Go mini grocery stores.

As shoppers we want the ultimate convenience, and since our apps already track our behavior — is it really such a stretch to allow stores to do the same?

Ricardo Belmar
BrainTrust
When it comes to tracking and privacy there is a definite generational gap! We can all generally agree that Millennials and Generation Z don’t seem to mind tracking because they feel they will get something valuable in return. Generation Xers are on both sides of the fence. Once you go to older generations, the trend becomes negative. My feeling is that everyone needs to accept they are being tracked, measured, monitored, etc. far more than you realize whether it’s online of offline — and that’s not paranoia or cynicism talking, it’s a reality. I’ve spent plenty of time in industries that deal with this and I’ve always been surprised by just how much of what we do can be tracked. The real question is how anonymous is it. On malls, I agree with Paula Rosenblum and Stephen Needel for the most part. I don’t think the question is too hard for mall operators to answer. Paula is right — malls are a pain. In my household we only go to a mall if we absolutely… Read more »
Kai Clarke
BrainTrust

The issue here isn’t tracking shoppers … it is about attracting shoppers to malls. Why fight the traffic, parking, and lines, when you have online options that are lower in cost, less hassle, and more inviting? Evolve or perish should be the cry for shopping malls.

Ralph Jacobson
BrainTrust
We’re talking about at least two different topics here, 1) How malls can drive more traffic, and, 2) How can shoppers be tracked effectively? The first question lends to thoughts of compelling drivers for today’s shoppers. Depending on the study, 90%+ of people of all ages still shop in physical stores. This won’t change anytime soon. The challenge is to create the draw that gets them into the mall and makes them want to return often. Easier said than done, yet I see retailers of all types becoming the anchor tenants the bring the shoppers in. The second question has to do with consumer adoption of technology, in general. Only a few years ago, we struggled to capture basic information for retail “loyalty” programs. (I use that word loosely, but that’s yet another topic.) Today, people are happy to opt in to most any program, and I believe it is only a matter of time when most people of all ages will be comfortable with video tracking, and even tracking devices implanted into the human… Read more »
Brandon Rael
BrainTrust

While customer tracking via beacons, and RFID tags can help provide details about the shopping journey, perhaps the most meaningful details to pull from this data, are the points along the experience, where friction, and frustrations occur. Similar to the abandoned online carts scenarios, there are critical points in the shopping journey, where the lack of service, interesting products, or just overall friction, where retailers will literally lose their customers … sometimes for good.

With that said, there needs to be compelling reasons, and incentives established for customers to opt in to be tracked. If it translates into meaningful personalized promotions, appropriate assortment offerings, and the fact that the retailers “get you”, and have the right products, at the right place, and ad the right times. This will remove help mitigate the creep factor. However, the right balance must be put into place, instead of bombarding your customers with endless popup offerings, you need to determine what volume, and types of communications work best.

Craig Sundstrom
Guest

I’m not impressed. There’s a long history of retail design — as in a century or more — telling us “where one store should be set up in proximity to another,” as well as other things this type of analysis is likely to tell us. In fact, I would go further and say that most things modern technology helps us do have been done for a long time, it’s just easier and cheaper now. (No small thing, of course, but it means there are few really “revolutionary changes” happening.)

And let’s not forget the obvious: there’s nothing to track if the (would be) customers aren’t visiting the mall in the first place!

Brian Kelly
Guest
8 months 21 days ago
Mall as attractive place to shop? Oxymoron, right. Pretty much always has been. When folks abandoned city centers as too intimidating, how many really found the sterile mall experience as a superior experience? It was perceived as safer, but it wasn’t superior. A generation more tolerant of diversity now embraces the city center shopping experience. What is in the store is what matters. If Apple is the most popular store in a mall, will shoppers avoid the mall to get to Apple? I doubt it. Shoppers are crafty folks and most sort out the best way to take on the large regional mall. Conduct your research on your device, head to the mall equipped to minimize “shopping” and easily park in the lot of the failing anchor closest to your destination, go and get out. Anymore, at best, there are 10 malls in the US where parking and foot traffic are problematic all day and all year. I don’t think mall foot traffic is an issue for mall relevance. It’s what is inside the stores.… Read more »
gordon arnold
Guest
My recollection of how malls became the big event that culminated several decades ago was the convenience of one-stop shopping unimpeded by weather conditions. The only drawbacks were unruly teenage vagabonds lovingly referred to as mall rats and the exhausting trek from one place to another in the search for the perfect deal. Adding to the anguish of the voyage through the bottomless mall was carrying a lot of heavy bags and hoping I remembered where the car was. Memories like these can create big ugly emotional scars for life. And then along came e-commerce, finger tip endless aisles and mega big boxes. These 21st century concoctions seasoned with things like BOPIS, free delivery, electronic price comparison and/or availability are making it difficult for the old ways to to reinvent themselves. As I travel the highways and byways of the northeast US of A, the trend to bulldoze and rebuild is on the rise. Condominiums and apartment builds look like they are tenant free, thanks to the help of higher real estate prices and lower… Read more »
Tom Erskine
BrainTrust
8 months 20 days ago

Probably not. The last paragraph of the article exposes the big flaw in this thinking. What, exactly, will malls be able to do become “more attractive” based on the data they collect? Behavior tracking can traditionally improve conversion rates, but malls don’t have a conversion problem, they have a traffic problem.

Peter Luff
BrainTrust
The one-to-one push marketing communication based on a customer via Wi-Fi or Bluetooth is an interesting concept. While it sounds really exciting to feel you can reach directly to a specific customer, we have to realize the bigger picture. Just imagine if everyone who could, started communicating with the very same customer at the same time! This communication runs the risk that it will become the equivalent of spam mail; who is listening at this point?! Of course to Max Goldberg’s earlier point, “Behavior tracking technology without consumer permission crosses a line of privacy,” Without an opt-in, any mall operator runs a significant risk of running into hot water and should therefore avoid this approach. Aggregating anonymized data is of course the other option which I would promote over the former. This will not in itself create more traffic or more conversion, it has to be said, though it will though tell you the outcome of tactics being applied in the form of events and promotions. Key measures derived from Wi-Fi/BlueTooth are return rates to… Read more »
wpDiscuz
Braintrust
"It’s pretty obvious where shoppers shop and don’t shop — and you don’t need high tech to figure that out — just stand there for 20 minutes and watch. "
"I think mall operators know what their problem is — malls have become a pain in the neck, especially the busy ones."
"When it comes to tracking and privacy there is a definite generational gap!"

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