Does In-Store Location Tracking Cross The “Creepy Line”?

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Google indoor mapsGoogle Executive Chairman Eric Schmidt famously (or infamously) said that Google’s policy is to “get right up to the creepy line” but not to cross it. These days, the creepy line is a moving target where consumer data collection are concerned. Indeed, privacy continues to be a very hot-button issue in the US and around the world — especially in the wake of the NSA-Snowden revelations.

This weekend, the NY Times reported on the relatively new phenomenon of indoor location tracking. There’s an emerging ecosystem of technology companies, startups, venue owners and retailers that are investing in and starting to experiment with and implement indoor location systems. Google, Nokia and Microsoft/Bing are investing significantly in venue mapping and, to varying degrees, indoor location and navigation.

A number of retailers are experimenting with different systems from companies like Euclid Analytics, WirelessWerx, RetailNext and others, which enable them to track consumer movements into and throughout their stores (e.g., when was foot traffic highest? what areas of the store were most popular?).

Different technologies can be used, including surveillance cameras, sensors or WiFi, to capture data on consumer behavior inside stores. These new technologies and systems offer a much more accurate picture of consumer movements than older “analog” approaches such as door sensors or turnstile counters that capture raw entrance and exit numbers.

Euclid refers to its offering as “Google Analytics for the real world.” Companies such as Euclid offer a pure B2B service. Other companies such as PointInside, Aisle411, Swirl and a number of others offer both merchant and consumer-facing services.

Nordstrom, which is one of the early US retailers to engage in these tracking and data-collection experiments, is the featured retailer in the NY Times article. It has been the subject of several articles about indoor location tracking. The company was apparently unnerved by earlier negative publicity and has distanced itself from indoor location.

While the Times article is relatively balanced, news coverage often reflexively plays up the sensational or “creepy” aspects of indoor location, which relies principally on locating consumer smartphones. Indeed, it has become quite challenging to talk about consumer data collection or tracking of any kind without generating controversy or “big brother” style accusations and complaints.

While indoor location is an emerging technology segment and privacy standards have not yet been fully developed, it would be a mistake to see it as malevolent or ominous. Not only are indoor location technologies extremely valuable to retailers (for analytics purposes), they have the very real potential to generate much improved customer experiences in stores. Without going into that in great detail, retailer apps could offer greater personalization and discounts or promotions to consumers if they’re indoor-location aware.

Macys is already doing this in many of its stores, and the experience is pretty innocuous. In addition, in places were customer service is scarce, consumers can be empowered with information about where products are located and how to most efficiently get to those areas of the store (in large department or warehouse stores).

In the case of Nordstrom, the retailer appropriately disclosed to consumers that it was using the indoor location technology. Regardless, the technology and phenomenon are unfamiliar to consumers, thus raising alarm in some people.

The public needs to be made aware that indoor location systems are in operation and given the option to opt-out (such as turning off WiFi). But retailers and technology providers also need to educate and explain the benefits of these systems to consumers.

Retailer apps using in-store location can and should request permission to use location systems (in exchange for obvious benefits), giving the consumer the option to participate or decline. If such disclosures, policies and permissions are put in place and explained, most consumers will cease to be alarmed and may find their in-store experiences have the potential to be much improved.


About The Author

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.

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