Under Surveillance?

The NSA’s Got My Emails and the Shoe Store is tracking my Cell Phone!

nsa1At first, the whole NSA data collection controversy didn’t bother me much.  We knew about it anyway, right?  I mean, any red blooded American who loves to watch Jethro, Tony, Tim, and Abby on NCIS knows that Big Brother can track your every move.  Why else would you have Google Maps on your smart phone?

My email is deadly boring.  Any besuited Intelligence type tasked with monitoring electronic communications to DP Marketing would expire of narcolepsy after reading hundreds of exciting missives from Amazon.com, Marketing Profs, and Facebook.  If there’s any subversive content in my emails, I surely wouldn’t know it. Who has time to go through all of that stuff anyway?

No, it wasn’t the NSA that concerned me.  It was another article on the Street Fight website that sparked my paranoid schizophrenic tendencies. Entitled Why Fixing Local Marketing Means Making Tech Disappear, the point isn’t immediately clear to those unversed in the subject matter (me, for instance).  To oversimplify, the argument is that there are two sides to the technology that will eventually provide local business with the same data clout that online competitors now have.  Demand side technology helps consumers “find” local business.  Examples would be search and social networking.  Supply side technology is the nuts and bolts of the “back office” –  POS and Ordering Systems, CRM, Inventory Control.  Currently, according to the Street Fight theory, there is a breach between the demand and supply sides of the technology.  Integrating the two sides will open brave new worlds of possibility, beginning with accurate measures and potentially eventually linking marketing expense directly to revenues generated. Sounds cool, huh?

Beyond Big Brother

I thought so, too, until I read about some of the first innovations.  According to Street Fight, bridging the gap won’t be accomplished by unified platforms that integrate marketing and back office functions.  Rather, the market is developing in a different way:

Instead of introducing a new platform or behavior, the technologies rely on sensors that already exists, pulling information from either wi-fi routers or surveillance cameras that most store’s already have installed to analyze data and extract meaning. It’s more of a hack, than an invention, and that’s what makes it so valuable for investors and so ominous for regulators.

I’ve written about Big Brother before in the SMB Newsletter, warning of the fine line between responsible use of data and quasi-ethical “lurking.”  The “hacks” posted in the Street Fight article come very close to the line, if they don’t fall over it. The first service, Euclid Analytics, generates data by turning wi-fi access points into online sensors to track smart phone “pings” around the store.  The Euclid website uses familiar terminology like “bounce rate” and “visit duration,” drawing comparisons to online analytics. Another solution, Prism Skylabs, uses security cameras to generate similar data.  One of their selling points is that the security cameras are already in place in many stores. The guiding principle, it seems, is that it’s not sufficient to merely track the consumer’s every move when it’s also possible to learn what they’re thinking.

The Charm of Brick and Mortar

According to a report linked in the Street Fight post (How Back-Office Innovation is Transforming Local Marketing), in-store sales still account for “94% of the $4.4 trillion in consumer retail sales” in the U.S. each year.  Do online operations pose a danger to small brick and mortar businesses? Possibly, but large chain retailers are probably a much bigger threat because of the share of the 95% pie they consume. According to one source, Wal Mart alone accounts for 7% of consumer retail spending.

Parnassus Bookstore Grand Opening 11/19/11I’m sure that my Luddite tendencies are showing, but I’m just not convinced that the kind of data-gathering methods offered by Euclid Analytics and Prism Skylabs are really the way to go. Sure, it would be wonderful to correlate social media “likes” with a direct sale, but isn’t there a method we could use to produce this result voluntarily? For instance, what if social media identifiers could be passed along voluntarily by customers in return for discounts, digital coupons, or any number of other rewards.  Similar analysis could be performed with the customer’s permission and without the subterfuge of the security camera.

The success or failure of small businesses has more to do with honesty and quality of relationships than with behavioral data. Analytics are great and they will continue to improve, but no amount of measurement will bring a customer back into the store after after he’s been ticked him off by discovering that he was stalked with a security camera or his cell phone.  For now, the better approach is to focus on the message and on the consistency between the message and the experience when a new customer pays a first visit.

Photo attribution: Meme from owned.com. Bookstore photo from cnn.com Forgiveness begged in lieu of permission.