Re­tail­ers to use data to re­veal type of buyer, set price ac­cord­ingly

The Washington Times Daily - - Business - BY ANNE FLA­HERTY

Ad­vances in tech­nol­ogy have never made find­ing deals this hol­i­day sea­son so easy — or so creepy. Mar­keters and mo­bile app de­vel­op­ers have de­vel­oped cre­ative new ways to help shop­pers find what they want for less. But th­ese in­ven­tive tech­niques also al­low for more ag­gres­sive track­ing of con­sumer be­hav­ior, whether buy­ers are on their work com­puter, a mo­bile de­vice or stand­ing in the gro­cery aisle.

It also now in­cludes the abil­ity to con­nect that data to­gether and with other per­sonal in­for­ma­tion like in­come, ZIP code and when a per­son’s car insurance ex­pires.

The goal is to mon­i­tor con­sumers online and off to de­ter­mine ex­actly what kind of buyer they might be and how much they’re will­ing to pay. Re­tail­ers say th­ese tech­niques help cus­tom­ize shop­ping ex­pe­ri­ences and can lead to good deals for shop­pers. Con­sumer ad­vo­cates say ag­gres­sive track­ing and pro­fil­ing also opens the door to price dis­crim­i­na­tion, where com­pa­nies might charge some­one more online or deny them en­tirely based on their home price or how of­ten they visit a site.

“You can’t have Christ­mas any more with­out big data and mar­keters,” said Jeff Chester, ex­ec­u­tive di­rec­tor at the Center for Dig­i­tal Democ­racy. “You know that song where Santa knows when you’ve been sleep­ing? He knows when you’re awake? Be­lieve me, that’s where he’s get­ting his in­for­ma­tion from.”

Con­sumer track­ing has long been a part of Amer­i­can con­sumerism. Re­tail­ers push shop­pers to sign up for loy­alty cards, reg­is­ter pur­chased items for war­ranty pro­grams and note ZIP codes to feed their mail­ing lists. Online stores and ad­ver­tis­ing ser­vices em­ploy browser “cook­ies,” the tiny bits of soft­ware code that can track a per­son’s move­ments across the In­ter­net, to an­a­lyze shop­pers and present them with rel­e­vant pop-up ads.

More re­cently, mar­keters have de­vel­oped in­creas­ingly so­phis­ti­cated ways to com­bine off­line and online data that cre­ates de­tailed pro­files of shop­pers. They also are per­fect­ing lo­ca­tion-track­ing tech­nol­ogy as a means of at­tract­ing new cus­tomers and in­flu­enc­ing shop­pers as they wan­der through brick-and-mor­tar stores.

A ma­jor push en­cour­ages shop­pers to agree to be tracked in ex­change for a good deal. Brick-and-mor­tar stores used to balk at cus­tomers who used smart­phones to com­pare prices at ri­val stores, but re­tail­ers like Tar­get are now push­ing their own mo­bile apps and of­fer­ing in-store Wi-Fi. The mo­bile apps en­tice shop­pers with coupon deals or ads as they move through­out a store, while in-store Wi-Fi is another way to track a con­sumer’s online move­ments.

To fur­ther lure buy­ers, ma­jor hol­i­day re­tail­ers in­clud­ing, Macy’s, Best Buy and JCPen­ney, have part­nered with the Shop­kick mo­bile app. If shop­pers turn on the app while in their store, they can be re­warded with dis­counts or song down­loads for try­ing on clothes, scan­ning bar­codes and mak­ing pur­chases.

Not all new tech­nol­ogy track­ing is vol­un­tary. Stores have been ex­per­i­ment­ing with heat sen­sors and mon­i­tor­ing cell­phone sig­nals in their stores to mon­i­tor which aisles at­tract the most at­ten­tion. One prod­uct called “Shop­per­cep­tion” uses the same mo­tion-de­tec­tion tech­nol­ogy in the Xbox Con­nect to pick up a cus­tomer’s move­ment, in­clud­ing whether they picked up a prod­uct only to re­turn it to the shelf. In ad­di­tion to an­a­lyz­ing cus­tomer be­hav­ior, it can trig­ger nearby dig­i­tal signs of­fer­ing coupons and steer­ing shop­pers to cer­tain prod­ucts.

The com­pany con­tends that the tech­nol­ogy is less in­tru­sive than other track­ing de­vices, in­clud­ing se­cu­rity cam­eras, be­cause a per­son’s im­age is never stored and their move­ments only reg­is­tered as a data point.

But how all that in­for­ma­tion is used and where it ends up is still un­clear. The Fed­eral Trade Com­mis­sion, along with sev­eral law­mak­ers, has been in­ves­ti­gat­ing the “data bro­ker” in­dus­try, com­pa­nies that col­lect and sell in­for­ma­tion on in­di­vid­u­als by pool­ing online habits with other in­for­ma­tion like court records, prop­erty taxes, even in­come. The Gov­ern­ment Ac­count­abil­ity Of­fice con­cluded in Novem­ber that ex­ist­ing laws have fallen be­hind the pace of tech­no­log­i­cal ad­vance­ments in the in­dus­try, which en­ables com­pa­nies to ag­gre­gate large amounts of data with­out a per­son’s knowl­edge or abil­ity to cor­rect er­rors.

“There are lots of po­ten­tial uses of in­for­ma­tion that are not re­vealed to con­sumers,” said Su­san Grant, di­rec­tor of con­sumer pro­tec­tion at the Con­sumer Fed­er­a­tion of Amer­ica. To pro­tect them­selves, “con­sumers still need to do quite a bit of shop­ping to make sure that they get (what) meets their needs the best and is the best price.”


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