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In-Store Tracking Doesn't Have to Get a Bad Rap

Retailers: Give Customers Something of Value in Exchange for Opting In

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In-store retail tracking is still in its nascent stages, but already it's getting a bad rap. In fact, a recent study revealed that 67% of U.S. consumers think that in-store tracking "feels like spying." With few restrictions -- legal or otherwise-- in place to mandate whether and how in-store tracking is implemented, it's not uncommon for some stores to track without telling. The logic being, of course, that it's easier to ask for forgiveness than permission.

Some stores engage in tracking onsite customers via their personal devices (most commonly using media access control, or MAC, address tracking). But in addition to feeling potentially invasive, in-store MAC address tracking is useless once the customer gets a new device and a new MAC address to go with it, making it impossible to measure the lifetime value of that customer. And even beyond the device lifecycle, customers are increasingly able to opt out of this tracking -- much as they can opt out of tracking or disable cookies online -- making this covert tracking even less effective than it had been very recently.

It's not that all retailers are engaging in this under-the-radar behavioral monitoring, or that it's always ineffective. It's just that some of the most effective tracking, as OpinionLab CMO Jonathan Levitt recently pointed out, takes place out in the open, with customers asked to opt in. And in fact, when tracking is transparent, shoppers often see a value in it as well. Opt-in retail tracking has the potential to be as welcome to consumers as social media interaction. If retailers can make their relationship with customers two-way, so that they offer some sort of participatory value exchange to shoppers in the physical store, it will give shoppers an incentive to provide more information about themselves. And that information will be much, much richer than tracking data in a covert or anonymous fashion. In short, more transparent and participatory in-store experiences that ask shoppers to opt in and provide basic contact information will provide richer data that doesn't just disappear when the next-gen smartphone comes out.

Getting customers to opt in, however, requires the promise that they'll get something out of it. In-store interaction must provide value: better, more tailored information that will assist with future transactions; an immediate 10% discount on sign-up; a rewards program that sends quarterly coupons; even a preferred customer line for shoppers who have spent a certain amount of time with, or money on, a brand. Just as retailers would never give their goods away for free, shoppers should not be expected to give away their information. Most shoppers know, intrinsically, that their value to a store is not limited to their immediate purchase. This is nothing new -- retailers like Nordstrom have long emphasized "put the customer first," even if sometimes at a cost, because they know that a happy customer is one who will not only come back, but will also evangelize the brand to friends and family. Today, when the focus is less on word-of-mouth and more on data, the same ideology still applies: a happy customer is happy to help you.

For example, let's say a shopper is looking for dress to wear to a party. She has narrowed her search down to three items, but can't make up her mind. She might take a "selfie" in each dress, post to Facebook, put it to a vote, and hope that enough of her friends are online to weigh in. Or, with the help of a store employee, she could save the items to a personal portfolio -- created just for her -- so that she could go home and think about her purchase and later buy the dress online, rather than having to return to the mall. The catch in this extremely convenient and shopper-friendly model? In order to access her virtual runway, she would need to provide information that would give the store basic information about her in exchange for a permanent record of the dresses she tried on. And that portfolio could travel with her, online and in multiple store locations, so she could start building a collection of potential outfits for future events.

Showing customers how the data they provide makes their experience better, faster, and more relevant is the fastest way to begin building both value and trust. If we ask customers to give us something of themselves, we have to give them something in return. Transparency, contextual relevancy, and value (real or perceived) will help make the modern retail experience effective and useful for brands and their customers alike. We want and we need customer data to bring personalization into the physical store. And if we can be transparent about our needs while at the same time showing consumers that the value of their data is not just one-sided, I expect far fewer shoppers will say in-store tracking feels like spying, and far more will say it feels worthwhile.

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