U.S. brick-and-mortar stores begin employing cameras and mobile phone tracking systems in order to monitor customers' behavior

Allison Oesterle

LOS ANGELES , December 14, 2011 (Industry Intelligence) – U.S. brick-and-mortar stores have begun employing cameras and mobile phone tracking systems in order to monitor customers’ behavior, Bloomberg reported on Dec. 13.

Rodrigo Fajardo, brand manager at Montblanc Inc., said, “It’s really a game-changing experience, and this is only the beginning. Before we were just working based on know-how and intuition. This is designing a retail business based on real statistics.”

Fajardo added that, based on data gathered via systems that monitored customer behavior, he moved best-selling items to a different part of his store, which yielded a 20% increase in sales.

Stores can use cameras to determine where their best selling items should be placed in order to increase sales, where additional salespeople are needed, how long people stand in front of specific displays and how people move around the store. They can also be used to determine the main demographics (in terms of gender, age and race) of a retailer’s core customer base.

Al Shipp, chief executive officer of 3VCR Inc., a security firm that has since begun to use its cameras to gather data on consumer behavior, said that it will take some time for retailers to fully embrace the idea of using their security cameras to gather data on consumer behavior, particularly as loss-prevention managers have authority over the cameras instead of the marketing managers.

The use of mobile phone tracking systems, which brick-and-mortar stores use to monitor foot traffic, is slightly more problematic, as customers are wary of them.

A pilot program, run in two malls—the Short Pump Town Center in Richmond, Virginia, and the Promenade Temecula mall in Temecula, California—that used a phone tracking system to monitor consumers—was suspended after only one day following Senator Charles Schumer’s complaints that the program could potentially compromise shoppers’ privacy.

Julia Yuryev, a spokeswoman for Forest City Enterprises Inc., which owns the malls, said that Forest City may discontinue the pilot program due to customers’ complaints that the phone tracking system, which had been designed so that no personal data was collected, was invasive.

The primary source of this article is Bloomberg, New York, New York, on Dec. 13, 2011.

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