StorefrontBacktalk: Mobile Tracking At The Mall – The CRM Potential Is Stunning
Through a special arrangement, presented here for discussion is a summary of a current article from StorefrontBacktalk, a site tracking retail technology, e-commerce and mobile commerce.
When a major Australian shopping mall next month starts tracking consumers by their mobile phones, they will try and pacify privacy advocates by stressing that no customer names nor phone numbers will be given to retailers. Truth be told, the tracking information that they will collect will be far more valuable.
The shopping center, which will reportedly remain unknown until the system is up and running, will obtain fit receivers that track shopper’s locations within two meters by identifying unique mobile phone radio frequency codes.
According to a report in Australia’s Courier-Mail, the vendor behind the trial, a U.K. firm called Path Intelligence, pledged that "no mobile phone user names or numbers could be accessed" and that "all we do is log the movement of a phone around an area and aggregate this to provide trend data for businesses."
But what if that phone-tracking data is linked with security cameras and/or POS systems? What if a mall representative called one of its retail residents and said, "We’re now tracking a woman who has spent $980 in the last hour and she has just walked into your store. For a $300 fee, I’ll tell you exactly where she’s standing right now. Deal?"
The idea of tracking consumers via phones is not new, but this is the largest scale trial we have seen.
Mobile, in one form or another, is at the heart of — depending on your perspective — huge data-collection advances or huge privacy disasters. Typically, it’s nice on its own. But when mobile data is layered on top of other real-time data sources, the new information potential grows exponentially. Consider the Carnegie-Mellon University study about mobile interacting with facial recognition or the plan to use mobile, security cameras, POS and license plates to create the perfect retail CRM system.
At its most innocuous, the systems could theoretically do little more than count shoppers and track their movement from store to store. But that’s hardly going to motivate chains to pay a lot for such data. If, however, the system collected data about what these customers did in those stores and tracked each customer over time, this effort gets much more compelling.
Discussion Questions
Discussion Questions: How much value will mobile-data tracking offer to retailers? Will consumers see value in its use also?
It is very valuable information but the scenario mentioned in the article scares the daylights out of me (and not in the good Halloween way).
While this data could be valuable to mall retailers, it’s not as important as outward marketing and brand recognition. Ok, so you can tell me where a customer has been. What does that do for me exactly? How do I know that the customer is going to buy at my particular location? I could do a better job of closing a sale with my talented associates as opposed to pegging a dollar figure and geography to a potential customer. This data may be important but it doesn’t help with the day to day job of selling to my customer.
I think this type of technology will scare consumers. “Now you are tracking my movements? All I wanted was 10 percent off at the GAP!” The Big Brother is Watching component will not help advance this type of technology in the retail world.
I’m not convinced any retailer could use the $300 worth of information in the example in a compelling way to make more sales.
That said, it wouldn’t stop marketing firms from pitching the idea….
This is just, plain spooky! I can’t foresee a positive consumer reaction to this without strong promotional incentives. I know that we live in an era where closed circuit cameras capture a lot of data, but using my mobile phone to track my movements in a mall without my permission does not sit well. The heck with the CRM potential. What ever happened to privacy?
This is the holy grail of customer insight; not just that there are customers coming and going, but who they are, where, when, and what they are buying. So much can be learned and so much can be abused at the same time. Retailers will be drooling for the info, and consumers will be calling foul. I don’t see this taking root anytime soon.
Mobile data-tracking could be of huge value to retailers, allowing unprecedented personalization and classification of customers. Customers could see value in the form of targeted offers and discounts, but retailers need to be aware of the “1984” implications. Mobile data-tracking of customers should be opt-in, or at the very least clearly visible signage should indicate it is taking place.
Any one else feeling used and violated with not even a ‘thank you’ in response? People around the world — including Occupy Wall Street — are feeling like that. These “marketers” think that because they don’t give out customer names etc that it’s all fair game. Frankly I doubt that claim is even true.
When the explanation begins with “All we do is…” you know something is well into the gray zone of ethics. Personally I’m sick of this whole manipulative mind set. It’s like going big game hunting in a zoo.
The value of the data will be determined by what data is available to the retailer. The article indicates what will not available but not what will.
I remain amazed at how much information people willingly hand over to retailers and others who ask. However, no one is asking the people who shop in this mall if they mind being having their location tracked by their cell phone. I don’t anticipate signage at the mall entrances that states “Beware – Retailers Are Tracking You” which means they are being tracked without giving their permission. As a consumer my answer would be to find another mall to shop in.
The ability to know where most of your customers come from and when and also where they tend to go after visiting you is invaluable. It not only allows you to market better upstream of the sale, but also to build loyalty and cross-promotional alliances downstream of your business.
Practices like these should be on an “opt in” basis. “No customer information” will be disclosed might be the intent but no company is immune from hacking or data leaks. This information has no business being collected without the express consent of each participant.
Will consumers see value of mobile location tracking in malls? How about making consumer value the foundation of the program?
I agree with Fabien that consumers should be able to opt-in. But I’d take it a step further — offer consumers who opt-in a gift certificate, subsidized by the mall, redeemable at any of the retailers using (buying) the data. This makes privacy a matter of consumer choice and builds overall mall traffic.
Monitoring via security cameras and recording of license plates is just about as creepy, with no value to the shopper.
At first I regarded all the privacy advocates who expressed concerns over radio frequency and near field communications as a bunch of luddites, but this article reiterates one very alarming aspect of this whole area that has started to change my perspective.
It is not the single radiating credit card, cell phone or driver license that creates the issue. It is the combining of IDs transmitted by a combination of cards, phones, government IDs and images from surveillance cameras that capture a totality of information that is alarming. How often have we seen surveillance cameras at ATMs, convenience stores, or gas stations used to identify suspects not only for crimes on their premises but to identify people who were merely in proximity of the cameras? Now let’s add RFID to the mix and go shopping at Macy’s, where the retailer has announced plans to expand their use of RFID on much of the merchandise. You can see where this is headed.
There is no doubt that the information gathered from radiating ID cards can be used to improve marketing and build more appealing shopping experiences. Mall owners and retailers will finally “know what they don’t know” about the nature of their environments. But this is a classic example of “just because it can be done, it does not necessarily mean it should.” It is similar to the decision to use easy-pass for toll collections. Constraints were written law on how this data could be used. I think industry would be wise to encourage a national standard on how customer tracking data is collected and utilized. If customers become too concerned about privacy issues it will begin to hurt traffic. After all, compared to online shopping visiting a mall still offers some chance of anonymity.
As an aside, since I mentioned easy-pass: It always amazes how traffic will slow down when they see a police car yet speed through the high speed easy-pass lanes where their IDs are being captured and recorded. To some extent it shows how complacent people are about the electronic surveillance that already exists.
Mobile is, no doubt, a valuable technology for marketers. But, when employed in this fashion, it slides into the realm of privacy violation. And, any technology, really, can be a slippery slope.
Yes, understanding traffic in and out of stores is valuable information. But it doesn’t denote consumer response/engagement, which is far more useful. If consumers feel that their privacy is being infringed upon, there could be a definite uproar. And the implications of such an uproar for a retailer/brand make this is a serious risk.
Digital technology is essential to utilize these days. But it must be done in such a way that improves the customer experience, while providing market research as a byproduct. How exactly does this add value for the consumer?
Collecting data nowadays is easy. The key is what is being done with that data. Knowing why traffic patterns change or why some corners of the mall get more traffic than others requires more than data aggregation; it requires experienced insight. If analyzed right, this could benefit retailers and shoppers alike. Retailers in less than prime locations can see how overall traffic patterns affect their traffic. Malls can see how special events influence traffic flow. With proper analysis, this could be a key tool but only if done right. Numbers mean nothing without proper interpretation.
The privacy concerns raised by others in the comments are certainly real, and great care needs to be given to making sure the program doesn’t overstep into privacy invasion.
That said, I think there is a real risk of overstating or misinterpreting the privacy implications here, and turning something benign into something sinister.
My assumption is that the system in question simply knows the location of a phone by way of its ID (say, a 20-digit SIM card number or MEID) — NOT the phone number, and NOT through any information about the person who owns that phone. And with simple one-way masking, the technology can even be designed in such a way that the SIM card number is never knowable by the people running the system.
So, provided that appropriate precautions are taken, the system will essentially be tracking anonymous dots (phones) as they move around the mall. Privacy invasion? I don’t think it is. Valuable traffic flow information for retailers? Perhaps.
Of course (and as mentioned by others), the real value would come from connecting location flow data to purchase history and line-items in the shoppers’ baskets…but then you’d be back into the privacy debate.
The level of secrecy around this implementation is really troubling. Where tracking and privacy issues exist, brands should go out of their way to be completely transparent, e.g., divulging the name of the mall now (not after the tech is up and running), alerting shoppers about the tech before it’s implemented via public information, and even including watchdog groups to help ease consumer concerns. And creating an opt out solution would be a huge benefit. There are ways to lessen the concerns around this type of tracking tech, but Path Intelligence and its partners seem to feel secrecy is the most intelligent path.
Another issue that concerns me is that, while brands have enlisted tracking tech for years, they shouldn’t become overly reliant on such tech when trying to gain an understanding of shoppers’ needs, desires and behaviors. Tracking tech can only tell brands the cold, hard facts of the shopping trip, e.g., where consumers shopped, what they bought, etc. What it can’t tell brands — and what may be equally or more important — are things like why consumers bought Product A over Product B or why consumers stopped at one store vs. another. The only way brands will uncover those types of consumer insights is by investing time and dollars in research to learn about consumer’s lifestyles. Relying solely on tech is just phoning it in.
This will never fly in the USA. Tracking my mobile phone is an invasion of my privacy. Texting me or calling me for the purpose of advertising is an invasion of my privacy, especially if you’re texting or calling in any way affects my phone bill. No one ever subscribed for phone service to receive advertisement or to be tracked in any way. If phones allow these capabilities they will have to be used on an opt-in basis.
What I really would like to see is a test whereby there were the opt-ins suggested by others along with an explanation of what’s going on as customers enter the mall. And yes, an incentive for agreeing. Then see how many people agree vs how many turn around and walk out or sit down and stage their own Occupy the Mall protest at potential intrusion of privacy. And yes, again, I am a paranoid Luddite who is feeling pretty angry at the audacity of offering such an opportunity to retailers who will then take advantage of customers.
No, Nada, Ingen, Nicht, Aucun, Non, Nu and in any other possible language. Very bad idea that could start out innocently and deteriorate rapidly. There is simply not a strong enough moral compass out there to trust marketers with this technology. If I become aware of it, not only will I not shop your store/mall, I will encourage others to stay away.
Personal communication devices are just that. Personal.
This feels very invasive. However, at the very elementary level there is something appealing about just the “count” factor. If this just were counting digital foot traffic past a particular store, or area of the mall, that would be one thing. Businesses already pay to conduct that research when they are considering opening a store in a mall. This simplifies the process, and removes the human error element — also it can decode times (daily, weekly, annually) when the foot traffic is best/ worst. Feasibly, this could help businesses make location and staffing decisions. My fear, and this is where the invasive feel comes in, is that there is a tremendous amount of personal data attached to the phone. With mobile payments being imminent, I don’t need or want that kind of information to be broadcast to retailers or hackers for that matter. Counts are one thing. Data intelligence of this magnitude is quite another.
What’s this system cost? I’m on our local fire department, and we’ve been looking at horrendously expensive equipment for our Scott packs that tells accountability people outside exactly where we are inside a structure fire. Someone goes down or gets trapped, we know just where to send the rescue crew. But the cost is a killer, and prevents a lot of departments from using the new technology. But every firefighter I know has a cell phone. Hmmm…
There is some really interesting wireless tracking technology that has been developed, some of the most interesting coming from Israel, where it was borne out of the defense industry. The challenge with tracking is indeed, privacy and identification and this needs to be done one of two ways: 1) via the carriers and/or 2) via consumer opt-in.
The former is not going to happen, at least not in terms of consumer ID. Carriers will likely install the tracking software, as there are a myriad of uses beyond tracking individual customers (think traffic patterns) and the carriers need all the revenue they can get. The idea of consumer opt-in, will ultimately happen, but it’s going to take the right consumer value proposition.