Heard about thin crowds in stores on Thanksgiving and Black Friday? Bricks and mortar retailers watch more than just sales figures during the holiday shopping season. They’re also tracking people passing by their stores, entering and moving within them.
News reports on shopper traffic are not just casual observations. Somebody’s counting. Providers such as Shoppertrak, Nomi and InfraRed Integrated Systems automate the process.
Studying consumer movement is, in itself, nothing new. It’s the methods that change. Once, pedestrians were counted by a person with a clipboard. Manual counting gave way footfall counters which used infrared beams to detect people walking by a fixed spot. Now, thermal imagery, video monitoring and detection of signals from mobile phones are becoming the tracking methods of choice.
As tracking techniques grow more powerful and less visible, public concern about tracking rises. Regulators and privacy-conscious consumers are asking questions and putting up resistance to shopper tracking.
Mobile device tracking, in particular, has led to questions regarding legality, privacy and ethics. Yet very little attention has been devoted to the fundamental question of whether mobile tracking is actually the best (or even a good) investment for retailers. At the heart of the matter is a simple question: what are you willing and able to do with the consumer data you have or can obtain?
If everyone were brutally honest, the answer would often be: nothing.
For businesses (or individual managers) who don’t use the data as a basis for action, mobile tracking has absolutely no value.
Many business managers say that they value analytics and take data into consideration when making decisions. All of them are truthful in the sense that they believe what they say. In the worst case, the analytics might be reviewed and rejected (most often, because the results are not consistent with the expected or desired results), and decisions are based on gut feel. In that case, mobile tracking again produces no value.
It may seem trivial to make the point that you get no value from data and analysis you don’t use. Yet, in practice, this is the primary reason for failure to realize positive return on analytics investment, for any type of analytics.
If the data involved is, for example, a conventional consumer survey, then you have wasted money, but are unlikely to find yourself in any legal, political or public relations mess.
The low risk associated with older data collection techniques is only partly because they are less controversial; it’s also true that accepted ethical standards (such as Council of American Survey Research Organizations' Code of Standards and Ethics for Market, Opinion, and Social Research) for these methods exist and are widely known and used. Mobile analytics, in contrast, has been in use for less than a decade and has no established ethical standards.
Of course, the point is that you should use the data that you collect, and make business decisions based on data. But that is not the only point. It’s also that data collection via mobile tracking comes with a price of more than money. This new technology bears an undefined price tag due to looming changes in the law (and perhaps differences in interpretation of current law), public perception and politics.
Because mobile tracking carries unique business risks, it is not a good first choice for obtaining data unless conventional methods are unsatisfactory to provide the data required to support any specific business decision. Nor is low cost alone sufficient justification for its use; cost can often be mitigated in other ways, such as observation of a sample of shoppers at selected times and locations, rather than every moment in the life of every consumer who walks into or near a store.
Honest appraisal of how data can and will be used in any given organization often favors modest data collection goals. Indeed, perhaps the only legitimate business case for mobile tracking would be to take immediate action based on real-time consumer behavior data. In practice, though, many retailers, perhaps most retailers, are not yet ready for this, lacking both infrastructure and the will to use it.
The counterargument might be that the mobile technology creates the means for real-time action, such as by presenting a personalized offer to a shopper upon entering, or even passing near, a particular store or display. While this may be technically feasible, it certainly compounds the complexity of data management and privacy obligations. What’s more, it begs the question of whether such personalization would actually produce more profit than ordinary marketing methods, and whether any short-run benefits will persist over time.
Disciplined practice of 1) collecting and analyzing data only where the results will drive action, and 2) avoiding mobile tracking when other means can provide the level of detail required to address the specific business problem at hand greatly narrows the range of potential uses for mobile tracking. While this approach will surely be frustrating for mobile tracking vendors, it may be equally liberating for retailers.
