Marketing Rsearch Gone Wild !

Like many other things it all started with good motive of monitoring store traffic via sensores, cameras and sound recording devices to provide better service. Marketing geniouses soon figured out that this generates amazing amount of data to give "insight" into customer behaviors.

What did you say to your spouse that made him put that cereal box back on the shelf?

What did your kid tell you which made you buy that cereal box?

How did you react after looking at the lable of that product box?

This is way too much invasion of privacy. Just because I am in someone's store they do not become entitled to record everthing. What do you think?

Here is excerpts from The Economist article.

Listening in

Shoppers are not just being monitored by cameras and heat sensors, however; sometimes their speech is being recorded, too. Recordant, an in-store monitoring company based in Atlanta, provides shop assistants with digital-audio recorders, to be worn around their necks, which record all their conversations with shoppers. At the end of each day the recording devices are plugged into special docking stations and the recordings are uploaded to Recordant's headquarters for analysis. Its software trawls the recorded dialogue for particular words or phrases without the need for any human input in order to provide accurate information on employee performance and customer behaviour.

Recordant says that trials in 40 locations have proved the value of the technology: one retailer was able to show that there was a 300% increase in sales of products recommended by shop assistants to customers. By providing precise measurements of this kind, the technology allows retailers to refine their training programmes and evaluate the effectiveness of promotions. They can even collect “competitive intelligence” by programming the system to search for the names of rival retailers, says Chris Etter, the chief executive of Recordant.

As useful as customer-tracking systems may be for exonerating harassed staff or minimising shoplifting, however, their primary objectives are clear. In an age when traditional “bricks and mortar” retailers face stiff competition from online merchants, any means they can use to get customers into their shops and buying as much as possible is seen as a worthwhile investment. Long before the advent of e-commerce, Wal-Mart's founder Sam Walton set out his vision for a successful retail operation: “We let folks know we're interested in them and that they're vital to us—’cause they are,” he said. Customer-monitoring systems are underlining just how interested, and just how vital.

Retailing: Big shops are using elaborate technology to monitor and influence the behaviour of their customers

newscast

IN A recent British television commercial, John McEnroe, a veteran tennis star, is seen racing his long-time rival Bjorn Borg around a Tesco supermarket. After arriving in the checkout queue just ahead of his opponent, Mr McEnroe is distraught to see an employee appear and open another till, giving Mr Borg the upper hand. The advertisment ends with a reference to Tesco's “one in front” initiative, which aims to reduce waiting times by opening additional tills whenever there is more than one customer waiting at a checkout. This scheme has been running for many years, but Tesco recently updated it by investing in customer-monitoring technology supplied by Irisys, a British company.

The system, called Smartlane, has two elements: sensors by the doors count the number of people entering and leaving the shop, and sensors by the tills work out how fast the queues are moving and how many “shopping units”—groups of people, such as families or couples, who will make one transaction between them—are standing in each queue. (Shopping units are identified using an infra-red sensor that tracks the trajectory and behaviour of “hot blobs” when they enter its field of vision; this approach is 95% accurate, says Chris Precious of Irisys.) All this information can then be used to predict how many tills will be needed up to an hour in advance and monitor average waiting times and queue lengths. In Tesco's case, a line longer than one shopping unit triggers the opening of another till. Sir Terry Leahy, Tesco's boss, said last year that the monitoring system had reduced waiting time for customers and helped to boost the firm's profits.

Tesco is not the only retailer using technology to keep tabs on people in its stores. Mr Precious says Price Chopper, an American grocery chain, is in the process of introducing Smartlane; and Marks & Spencer, a British shopping chain, uses Irisys's infra-red sensors, as does Abercrombie & Fitch, an American fashion chain. Brickstream, a supplier of customer-monitoring systems based on dual-lens cameras, which are more accurate than single-lens cameras in tracking and counting applications, counts big retail chains including Toys “R” Us, Office Depot and Walgreens among its clients.

Rather than monitoring queue lengths, however, Brickstream's system, called BehaviorIQ, is used by retailers to gather data on where their customers go, where and how long they stop, and how they react to different products. This information can then be compared with the store's transaction log to determine the effectiveness of store layout, product fixtures and other variables. In-store designs and marketing campaigns that work can be identified and improved upon, and those that do not can be replaced with something more profitable. Retailers, it seems, are buying the idea that by watching customers while they shop—what might be called “retail surveillance”—and redesigning their shops accordingly, they can get people to spend more.

http://www.economist.com/search/displaystory.cfm?story_id=10202778