INNOVATION

Shopping Gets Personal

Retailers are mining personal data to learn everything about you so they can help you help yourself to their products.

November 27, 2012

A mannequin that gathers intelligence about customers. Photo courtesy of Almax.

Black Thriday is over. So is Small Business Saturday and Cyber Monday. Today, in case you didn’t know, is either Green Tuesday or Giving Tuesday, depending on whether you feel like eco-shopping or giving to charity.

Not sure what tomorrow may bring (How about Weird Relative Gift Wednesday?), but I suppose shopping does feel less chaotic if someone’s organizing it into theme days, although that doesn’t always stop it from devolving into a contact sport.

Can you imagine American shoppers embracing something like iButterfly, a mobile app popular in Asia where customers earn coupons by tracking down virtual butterflies with their smartphones? Me neither.

In the U.S., it’s about cutting to the chase and here the chase is after the sweetest deals, pure and simple, without having to bother with running after faux flying insects. And retailers have ratcheted up the competition, using the latest tracking technology to closely monitor their competitors’ pricing decisions and undercut them, in close to real-time, on their own websites. When Best Buy, for instance, published advertising saying it would be selling a $1,500 Nikon camera for $1,000, Amazon responded on Thanksgiving morning by cutting its price for the same camera to $997.

To know you is to lure you

No question that the big hook remains big bargains. But a lot of companies are also getting much more aggressive about mining data to tap into the power of personalization. The more they know about you and your tastes and habits and what you say on Facebook, the more they can press your buy buttons–but in a way that feels like they’re doing it all for you.

Now grocery stores like Safeway and Kroger have even started to customize prices in offers to loyalty cardholders. As Stephanie Clifford noted in the New York Times:

“Hoping to improve razor-thin profit margins, they are creating specific offers and prices, based on shoppers’ behaviors, that could encourage them to spend more: a bigger box of Tide and bologna if the retailer’s data suggests a shopper has a large family, for example (and expensive bologna if the data indicates the shopper is not greatly price-conscious).”

And RetailMeNot, the most popular coupon site in the U.S., has just launched an app that steers you to coupons you’re more likely to use based on your Likes and other personal info gleaned from Facebook.

Data creep

But when does solicitousness turn creepy? Is it when you receive a pitch in your email for an outfit you pinned on Pinterest? Or when you start getting offered bargains from stores you happen to pass on the way to work every day?

If you believe a recent survey by Accenture Interactive, a clear majority–61 percent–of online shoppers in the U.S. and the U.K. are willing to give up some privacy if it means they can receive personalized offers from retailers.

And more than 50 percent of those surveyed in the U.S. said they’re comfortable with the idea of their favorite retailers tracking their personal data in order to fine tune recommendations for future purchases.

But only so comfortable. Almost 90 percent of the respondents said that’s entirely dependent on whether retailers offer them choices on how their personal info can be used.

As Kurt Kendall, a retail consultant, put it in a recent interview with Cox Newspapers: “People do not want to feel like they’re being stalked.”

I’ve got my fake eye on you

How about being watched? The obsession with gathering intelligence about customer behavior has reached the point where an Italian company is selling mannequins equipped with cameras to watch shoppers. This model, called the EyeSee, is being sold by Milan-based Almax for more than $5,000.

That’s a lot of money for a pretend person. But this one has a camera embedded in one eye that feeds data into facial-recognition software which logs the age, gender and race of passers-by. It’s all about collecting data–no video is actually stored.

Almax won’t reveal which of its clients have purchased EyeSee mannequins, but it has said that one added a children’s line of clothing when the camera observed that kids made up more than half its mid-afternoon traffic. Another, according to Almax, discovered that a third of its visitors using one of its doors after 4 p.m. were Asian, prompting it to place Chinese-speaking staff by that entrance.

But wait, there’s more. Almax is developing a model that will recognize words well enough that stores will be able to find out what customers are saying about the mannequin’s outfit–again without recording a thing.

The shipping news

Here are more examples of how companies are using technology to build relationships with customers.

Or simply “Clothes That Don’t Make Me Look Fat”: For those who know what they like in fashion, Shop It to Me has just launched a site called Shop It to Me Threads that allows you to create a customized page that’s updated daily with the latest news and deals on your favorite fashion trends, designers, types of items, or combination of elements, such as “Michael Kors Bags and Shoes under $250″ or “Pencil skirts under $100.”
Pickie picky: E-commerce start-up Pickie has come out with an iPad app that builds a personalized shopping catalog for you, based on your preferences expressed on Facebook, along with suggestions from your friends. And you’re able to order items directly from your customized Pickie site.
Do it for the children: To counter the trend called “showrooming,” where people check out products in a store and then go home and buy it from another company online, Target is encouraging shoppers to go online while they’re in its stores. During the holidays, the retailer is featuring 20 hot toys at the front of its stores next to signs with QR codes. Shoppers with smart phones can scan the codes, buy a toy and have it shipped free.
What about Pop Tarts and headphones?: Amazon, through its subsidiary Quidsi, is sharpening its aim at moms who shop online. Last month it launched another narrowly targeted site called AfterSchool.com. It lists more than 70,000 of the sort of things kids need after school, from ballet shoes and shin guards to basketballs and jewelry kits.
And if you’re really loyal, a greeter washes your car: Earlier this month Walmart, through its Silicon Valley operation @WalmartLabs, rolled out Goodies, a food subscription service. For $7 a month, people who sign up will receive a box of gourmet snacks, such as Dang Toasted Coconut Chips and a Nutella & Go snack pack. And if they’re active on the Goodies site by rating products and writing reviews, they can earn enough loyalty points to start getting their monthly goodies for free.

Video bonus: Based on this video from Comiket, the huge comic book convention held in Tokyo, the Japanese and Americans have very different styles when it comes to the surging crowd thing.