Making Unique Observations in a Very Cluttered World

Monday, 21 October 2013

How stores use your phone’s WiFi to track your shopping habits -

How stores use your phone’s WiFi to track your shopping habits - 

Here are some of the things the owner of a brick-and-mortar store is in a position to learn about his business these days, as Jules Polonetsky, the director of a Washington think tank, told me recently:
The average wait time at the back register is two minutes. Half of your customers have been in your store twice in a week. Ten percent of the people who come in your store never come near a register, meaning they don't buy anything. There are a lot of people not finding what they want. The big promotion on the east side entrance of your store was more successful at bringing people to purchase than the promotion on the west side of your store. Here's the hotspot in your store that draws the most users. The typical user comes in and purchases one thing. Ten percent of your users have been at more than one of your stores.
The list of insights is staggeringly specific, made possible by combining commercial ingenuity with an everyday technology that was never intended to be used this way.
Every smartphone these days comes equipped with a WiFi card. When the card is on and looking for networks to join, it's detectable by local routers. In your home, the router connects to your device, and then voila — you have the Internet on your phone. But in a retail environment, other in-store equipment can pick up your WiFi card, learn your device's unique ID number and use it to keep tabs on that device over time as you move through the store.
This gives offline companies the power to get incredibly specific data about how their customers behave. You could say it's the physical version of what Web-based vendors have spent millions of dollars trying to perfect — the science of behavioral tracking.
Thousands of customer interactions a day are logged and uploaded to the databases of third-party companies that specialize in retail analytics. Estimates vary as to how big this industry is, but according to Polonetsky, nine major players account for the vast majority of tracking activity. Others estimate there could be as many as 40 major and minor firms.
Here's how it works. To distinguish themselves from other nearby devices, all WiFi or Bluetooth-enabled gadgets come with something called a MAC address. It's a unique, 12-digit code that helps routers send data to the right recipient. (MAC addresses have nothing to do with Apple, although Apple products that ship with wireless components come with them.) By logging the MAC address, companies can identify individual devices.
In general, no personally identifiable information can be gathered this way, says Stillman Bradish, co-founder of The Wireless Registry, a D.C.-based start-up that designs ways for consumers to opt out of the tracking. But, he added, as with any type of metadata, it's easily possible to cross-reference it with other forms of public or commercial information. The resulting data slurry can help firms build detailed profiles of consumers, even if the consumers themselves remain anonymous.
Thwarting this tracking yourself can be impractical. One option is simply to turn off your wireless cards whenever you enter a store. But that might still not prevent a retailer from snatching your MAC address while you're walking by the promotion in the window outside. Some retail analytics companies — including New York-based Nomi, which this week raised $10 million in venture capital — offer an opt-out function on their Web sites where you can type in your MAC addresses and state your desire not to be tracked. Doing this for every device you own can be exhausting, however. And some retail analytics companies don't provide the opt-out feature.


1 comment:

  1. Never have thought that this could happen but seems a great idea to track the shopping habits of a person.

    Silvester Norman

    Change MAC Address