Stores like Family Dollar Stalking Customers Cell Phones Now?

The New York Times reported this morning about a number of retailers using geotracking technology including Nordstrom (NYSE: JWN), which decided last fall to test technology that would allow the retailer to track customer movements by following the Wi-Fi signals of customers’ smartphones. Although it is arguably the same thing online retailers do with cookies, profiles or online tools, the tactic crashed at the brick and mortar level. Nordstrom, which had informed customers about the tracking, ended the experiment in May, in part because customers didn’t like it, and let the store know.

Here’s what one expert told the Times:

“The idea that you’re being stalked in a store is, I think, a bit creepy, as opposed to, it’s only a cookie—they don’t really know who I am,” said Robert Plant, a computer information systems professor at the University of Miami School of Business Administration, noting that consumers can rarely control or have access to this data.

Anyone who has downloaded geotracking retail apps such as those offered by Shopkick, RetailMeNot are well aware of the coupons and deal notifications that pop up when they approach a mall or a particular store. They’ve exchanged their privacy for deals, but it seems problem arise when consumers unwittingly get tracked. Numerous retailers including Family Dollar, Benetton and Warby Parker are using similar technologies to try to improve their store layouts and offer coupons, as the Times points out.

The way the technology works is that Wi-Fi antennas can figure out where a shopper is in the store within a 10-foot radius, and recognize returning shoppers because each mobile device has a unique identification code when searching for networks.

Perhaps the stores would do best just to let users opt in, and maybe give them a reward for doing so. Or maybe they should leave the cookies to e-commerce. As one commenter on the Times article with 45 years in the retail business put it, using such technology ignores the real edge that retailers have—or at least should have— in physical stores, which is real salespeople and store managers.

Teresa Novellino
Upstart Business Journal Entrepreneurs & Enterprises Editor


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