In-Store Customer Analytics Get Digital Twist


When you browse and buy online, retailers get loads of information about you and your shopping behavior. Now, it seems, the same sort of customer insight might be gleaned from brick-and-mortar establishments.

The idea, promised by a startup called Euclid Analytics, is to apply digital analytics to the real world, as TechCrunch described in a profile on the company. Euclid itself says in-store shopping is viable, though it needs "a systematic, data-driven approach to optimizing every part of the business." With its technology, Euclid says on its website, business owners get information about customer behavior to direct improvements in "marketing, merchandising, and operations."

Today's retail market is ripe for this kind of data analytics, Will Smith, Euclid CEO and cofounder, said in a blog interview. Retailers that might have said a year ago, " 'I don't need your data,' have changed their tone to say, 'Amazon's really hurting me,' " he said.

Euclid cofounder and COO Scott Crosby put it this way in an interview with MIT Technology Review: "Most stores are still using clipboards and clickers" to gather data. Crosby came to Euclid from Google, and he applies the same kind of data mining approach used there to retail.

Euclid's selling point to store owners is "we're going to give you the same tools that Amazon uses to compete with you," Smith told TechCrunch.

Euclid demonstrated Euclid Zero, "the first zero-hardware solution for real-world shopper analytics," at the National Retail Federation's annual conference in January. Through a partnership with enterprise WiFi providers Aerohive Networks, Aruba Networks, Fortinet, and Xirrus, Euclid can offer a system that picks up customer data from their WiFi devices through a store's existing wireless infrastructure. That eliminates the need for special equipment or sensors. (But retailers that don't have WiFi from one of the partners can install sensors, each of which is designed for up to 24,000 square feet of coverage.)

Euclid analytics works by picking up on the signals of a shopper's smartphone. A WiFi-enabled device sends out pings that the sensor or WiFi provider can pick on to identify its MAC address and location. Euclid sends those pings to the cloud where its "advanced heuristics extract actionable insights from the data and store them in Amazon's highly secure datacenters." The analytic results are then made available to the retail subscriber on a web-based dashboard. Knowing how much time the customers spend near or in the store or how many visits result in a purchase allows store owners to plan more effective strategies.

Two basic assumptions about accuracy and security are at work in Euclid's model. One is that enough shoppers carry smartphones to make their movements significant for overall patterns. Euclid estimates that such shoppers make up between 40 percent and 70 percent of store traffic. The second is that Euclid's data gathering isn't violating an individual's privacy. Euclid doesn't tap into calling or browsing data, and each MAC address is scrambled, "using a one-way hashing algorithm," the company said. In case people are still concerned, Euclid publishes its privacy commitment and offers an opt-out and delete option from its site or through instructions posted at the stores that use its service.

Of course, one can always raise the critique that such data collection should be opt-in rather than opt-out, but as one blogger put it, even if Euclid does know your location, "it won't know much more than your cellular provider, or any of the app vendors to whom you have given location permission on your phone." And the fact is that stores already do their best to track customer activity either through loyalty cards, store credit cards, or by asking for phone numbers at checkout.

This kind of data collection is less personal, focusing on general patterns of visits and purchases rather than personal ones. It's not the kind of marketing that Target made notorious with offers for baby products to pregnant women, but an understanding of what brings customers in and how long it takes them to buy.

If you encountered a Euclid opt-out sign while you were shopping, what would you do? Share below.

Ariella Brown,

Ariella Brown is a social media consultant, editor, and freelance writer who frequently writes about the application of technology to business. She holds a PhD in English from the City University of New York. Her Twitter handle is @AriellaBrown.

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Re: Look, no video!
  • 2/5/2013 7:48:47 AM
NO RATINGS

There are a lot of flaws with existing security systems, according to people who work in retail. What are the next generation options? Anyone know?

Re: Look, no video!
  • 2/4/2013 9:38:00 AM
NO RATINGS

@Noreen yes, that is something that will have to be taken into account in sensor systems.

Re: Look, no video!
  • 2/4/2013 9:28:06 AM
NO RATINGS

I guess our car keys could set them off, too. Or mayve even ID badges. So much connectivity and potential for problems.

Re: Look, no video!
  • 2/3/2013 6:45:46 PM
NO RATINGS

@Noreen good to know! That way if I ever set off a store alarm when I'm not carrying a library book, I'll know to check if my phone is to blame, though I do try not to drop it too much.

Re: Look, no video!
  • 2/3/2013 2:48:56 PM
NO RATINGS

IDK but when I researched it, the best answer I found was this: almost all "sensormatic" type systems are RF based, and cell phones are pocket-sized RF factories. If the security system's not shielded properly, or if a phone's not quite right and putting out spurious signals, (dropped it a few times?) a phone could easily offer signals to confuse the system.

They say most theft deterrent systems these days are designed to reject cell phone signals, but you could always have a poorly designed system or an old outdated system, or maybe even a system that wasn't quite installed properly.

Re: Look, no video!
  • 2/3/2013 12:21:36 PM
NO RATINGS

@Noreen, I wonder what in the phone did it. In that case, I know it was the library book because I demonstrated it to the store employees nearby. I don't think my cell phone ever triggered an alarm, and the one I carry doesn't even pick up Wi-Fi signals. 

Re: Look, no video!
  • 2/3/2013 12:05:55 PM
NO RATINGS

I've set off store alarms with my cell phone - not my iPhone but my older ones

Re: Look, no video!
  • 2/3/2013 9:54:06 AM
NO RATINGS

@Seth "why not track RFID tags" That reminds me of the time I set off an alarm when exiting a store. No, I didn't steal anything, but I had a library book in my bag. Either the library had not deactivated the tag in the book, or the store system is set to pick up on a setting that the library's sesnor does not. I'm sure some would love to track everything and just don't because the cost for applying the technology at this point is greater than the benefit. 

However, I do still see a legal difference between what you propose as possible and what Euclid is actually doing. Because of the limitations of the Wi-Fi signals, Euclid's system can only pick up on smartphone movements when they are within range, so it is not quite the same as putting a tracking device on your car or your body to know where you are at all times. Also I'd imagine that there may be some legal difference between being on public property or your own property and the retail establishment. For example, you may have the right to say whatever you want give free speech, but if you enter a store and start a protest right there, you would likely be asked to leave. 

Re: Look, no video!
  • 2/3/2013 12:09:14 AM
NO RATINGS

It may be legal as long as the store post a notice.  Generally speaking, nothing is illegal until it is challenged in the courts or a law is passed.  Congress considers ban on smartphone tracking apps . So new technologies, i.e. cloning, stem-cell research and electronic surveillance.  Currently the Six District Court, in a 2 -1 decision has ruled that warrantless GPS tracking is legal. 

By the way, ever notice that these decisions are always 5-4, 3-2 or other wise just by one vote?

  Now it is heading up the Federal Courts.  The argument the Justice Department makes is that GPS tracking " "is consistent with the Fourth Amendment because a customer has no privacy interest in cell-site records, which are business records created and stored by a cell phone provider in its ordinary course of business."

As this battle between the Civil Liberties Union and the Justice Department goes to the Supreme court.  I'm sure this decision will have broad implications for other types of tracking technology. 

Now don't get me wrong, I didn't think twice about using the full body scan at the airport. But if this is legal, then why not track RFID tags to see what products the customer is bringing into the store and where they purchased them from as long as you don't identify the customer?  

 

Re: Look, no video!
  • 2/2/2013 8:00:43 PM
NO RATINGS

@Seth You may find it invasive, but it is not illegal. I have to admit it doesn't concern me personally because I don't carry a smartphone.  A number of people who have commented on articles that feture Euclid's technology say that they turn theirs off in stores, so they would not be transmitting signals for the sensors of Wi-Fi to pick up on. 

In any case, I believe that privacy is shot for the most part today, particulalry as just about everything we do online is tracked, whether through purchasing or browsing history. The idea of these devices is to try to level the playing field a bit in terms of all the data that online retailers already pick up on for shoppers.

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