Customer Experience, Predictive Analytics, Passive Wi-Fi Tracking and Other Privacy Threats, Happy Feet by Asa Aarons
Trash cans pick people's pockets. Customers get retail discounts based on their moods. Retailers offer personalized purchase suggestions, just by analyzing everything customers have bought or browsed.

It's a brave new world of customer experience. In the age of big data, predictive modeling, data mining, passive Wi-Fi tracking and personalized marketing are part of the new normal. The question is: Do these technologies represent state of the art marketing and analytics or cross the line from clever to creepy?

The Joke's on Who?

Hey did you hear the one about Target figuring out a teen was pregnant even before her own parents? How about the one involving Nordstrom -- and the way it monitored customer movements by using the Wi-Fi signals on their smartphones?

Both stories have been repeated as often as one of those lame "horse walked into a bar" jokes. But they aren't jokes and a lot of people don't find them funny.

No, at a time when trash cans pick (up) people's smartphone Wi-Fi signals and retailers scan customers' faces to deliver personalized marketing messages, the only joke is the idea that privacy still exists.

As Eric Schadt, chair of the Department of Genetics and Genomics Sciences at Mount Sinai School of Medicine in New York City, stated in an editorial in the Journal of Nature:

Rapid electronic transactions among individuals and between individuals and entire communities occur on an unprecedented scale, our life stream is continuously digitized and archived-GPS positioning information, cell phone calls, text messages, credit card purchases, e-mails, online social network chatter and even our electronic medical records … Long gone are the days of anonymity and privacy."

Privacy has changed from an expectation to an artifact from the pre-digital age -- and all we can do now is grapple with the consequences of this new reality.

Facing the Camera

Remember when someone asked you to smile before taking your picture? Now your image is surreptitiously captured in many ways every day -- by digital cameras, video surveillance cameras and electronic imaging devices, on city streets and highways, in apartment buildings, offices and retail stores.

Consumer Reports characterized them as "super spy cams" in a report earlier this year:

High-resolution video cameras monitor all areas in and outside the store. The footage is then stored and catalogued for easy searching. With facial-recognition software, your mug shot can be captured and digitally filed without your knowledge or permission. Ditto for your car’s license plate. What's creepy about them: Gaze trackers are hidden in tiny holes in the shelving and detect which brands you’re looking at and how long for each. There are even mannequins whose eyes are cameras that detect the age, sex, ethnicity, and facial expressions of passers-by."

What a Pretty Face

Synqera, a Saint Petersburg, Russia-based point-of-sale analytics and loyalty startup founded, delivers customized marketing content for customers at the moment of decision. More specifically, it sells software for checkout devices or computers that can personalize marketing messages based on a customer’s gender, age and mood, measured by facial recognition.

Learning Opportunities

How does it work? Synqera uses tablets mounted to kiosks to determine the items in a customer's cart or, based on his appearance, items he may want to buy and uses advanced facial recognition software to analyzes the shopper's facial expressions. It then combines information from the customer's loyalty card with this real-time information about the shopper's age, purchase history and mood. Does a 25-year-old with a history of alcohol purchases look lonely? Maybe a discount on a nice bottle of wine would perk him up -- and make a sale.

Synqera began piloting this “intelligent retail technology" that leverages big-data and real-time customer response in July in partnership with Ulybka Radugi, one of Russia's largest cosmetics chains. Filipp Shubin, the company's chief operating officer, told the company is exploring deals in Europe and the United States and expects to announce another international retail partner in a different retail vertical before Christmas.

Shubin said the benefits to the consumer outweigh privacy concerns. "Synqera technology does not take any of your personal information. Most of the data collected is done through the opting in of the loyalty card or code the consumer has through the retailer, therefore what the consumer already provided the retailer is then accessible again during that returning shopping experience," he said. Interesting that Shubin did not define a customer's mood as "personal information."

Italian mannequin maker Almax has developed a biometric mannequin to count and classify shoppers in fashion stores. Created in partnership with Kee Square, which has developed techniques in video and audio signal processing for various applications, the EyeSee mannequin allows retailers to "observe who is attracted by your windows and reveal important details about your customers," including age range, gender and race. A camera inside the mannequin's head "analyzes the facial features of people passing through the front and provides statistical and contextual information useful to the development of targeted marketing strategies. This embedded software can also provide other data, such as the number of people passing in front of a window at certain times of the day."

Tomorrow: The pros and cons of personalized marketing.

Title image by Asa Aarons/All Rights Reserved