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.