Smartphone-Sensing Technology Allows Businesses to Track Customers’ Movements Inside Their Shops

Don’t look now, but you may be carrying the perfect homing device for businesses that want to keep tabs on your movement within their stores: your own smartphone.

Tracking a customer’s online shopping activity has become commonplace in the world of e-commerce. Now, new technology is giving brick-and-mortar establishments a similar capability, by using small sensors to follow the wifi signals emitted from customers’ smartphones as they walk around a shop.

According to a recent article in the New York Times, major retailers such as Nordstrom, Cabela’s and Family Dollar have been experimenting with smartphone-tracking systems. Although the systems don’t allow businesses to gain access to any private information about the phone owners, some consumers have expressed concerns about being followed.

Stepfan Jefferies, owner of the Lexington-based consumer analytics firm Reconomy, which offers such tracking and data-collection services to businesses, said the technology isn’t looking to invade anyone’s privacy. It is aimed instead at providing businesses with new insight into the behaviors of the anonymous consumers who are attached to those iPhones and Androids.

“The goal is to make the marketing for a local business more efficient by allowing them to lift the hood and see, kind of in a surgical manner, what is really working and what isn’t,” Jefferies said.

Each phone detected by the sensors is identified only by its MAC address, a unique identifier assigned to each device by its manufacturer. The MAC address indicates what type of device it is and allows the sensors to track where the phone moves, but the identity of the person carrying the phone remains anonymous, Jefferies said. The only personal information associated with a specific MAC address is that which the phone’s owner opts to offer up voluntarily, by signing up with the business for special mobile promotions or e-mail notifications.

The technology is precise enough to track how many passersby linger by the menu posted in a restaurant’s window, for instance, or how often shoppers stop to consider an in-store retail display. It also can show how long a customer waited in line before he or she reached the cash register at a fast-food restaurant.

But the data-collection possibilities don’t stop there. When used in conjunction with social media promotions, which Jefferies is apt to do, the system can measure how many people came into a business to claim an offer that they heard about on Twitter or Facebook, or even through print advertising or on the radio. If a business owner sponsors a local arts festival or sporting event, strategically placed sensors can tell how many new customers who attended the event also visited the sponsoring business — later that night, that month or even that year. For those customers who don’t mind sharing their personal preferences or interests, it might someday result in customized special offers popping up on a customer’s phone just as they approach their favorite department within a store.

So far, Jefferies has been focusing his company’s attention on three sectors: beer and beverage companies; retail shops and restaurants; and the automotive industry. He has been concentrating on large store chains, but he said the analytics can be useful for smaller independent businesses as well. With a cost of less than $50 per month for one sensor and the required software, Jefferies said the technology is well within reach for companies large and small.

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