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 The new technology being trailed by French retailer Carrefour tracks
your movements and beams data to your smartphone via light pulses
undetectable to the eye, to guide you to the right shelves for
tailored special offers.
It is the latest attempt to combine the online and real-world
shopping experience, regarded as the holy grail for the industry at
the moment.
As part of a new loyalty scheme launched last month, for example,
Britain's Marks and Spencer is sending promotional text messages to
shoppers who are in or near its stores - but only those who have
agreed to receive them.
In fact almost three-quarters of British retailers are using
technology, including facial recognition software, to track
customers in stores, according to a survey of retail executives by
IT services firm CSC. It is mostly for security purposes, but also
to help provide a more personalized service.
Even in Germany, where privacy is particularly closely guarded,
major retailers have been signing up to U.S. app Shopkick, which
rewards consumers with points when they enter participating stores
and scan products with their phones.
But retailers must tread with caution, especially among older
customers.
"We are already flooded with offers on smartphones. We are being
tracked to death. I guess I'm old school, but I want to keep my
privacy," said Yves, 50, an insurance executive shopping at the
Carrefour store that is testing the new lights.
The Carrefour project - a joint trial with Dutch tech firm Philips -
is at the sprawling store next to the train station in the northern
French city of Lille, chosen for the test because of the young and
urban crowd it attracts.
The Euralille hypermarket replaced its fluorescent lighting with
Philips LED lights that can transmit data via pulses which are
registered by smartphone cameras, at this stage only iPhones.
'NEW TOYS'
Customers who have downloaded the "Promo C-ou" (Where is the special
offer) app can let their smartphone camera point up so the lights in
the ceiling determine their location. A blue arrow on the phone
screen then guides them to the right shelf.
"We want to facilitate the shoppers' experience and be more
convivial," said Carrefour store manager Thierry Demettre.
The service helps direct busy shoppers to the 200 to 300 different
items on promotion each week, he said.
Carrefour said the app was being used about 50-100 times a day in a
store which serves 11,000 customers a day. It is recruiting students
to help customers use the app during the busy holiday season.
When Reuters visited the store, it was hard to find shoppers who
knew about the app, despite banners advertising the service in the
aisles.
Karine, a 40-year-old civil servant who works nearby, said she could
imagine using the app: "I could save time when shopping," she said,
adding she did not mind sharing her data. "They would not be the
first nor the last to send us messages."
Eight in 10 consumers around the world are willing to share key
pieces of personal information with brands, but only about 8 percent
feel they are receiving better offers as a result, according to a
survey of 20,000 people in 11 major countries conducted by marketing
and loyalty company Aimia.
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"Marketers have got lots of new toys in the toy cupboard but the
risk is you end up doing cleverer versions of spam," said Aimia
chief operating officer David Johnston.
DATA MOUNTAIN
The new M&S Sparks loyalty scheme aims to get around that by asking
members to share their interests when they join so they can get
tailor-made offers and invites to special events.
"This personalization is a key aspect of what we will deliver," said
Suzanna Broer, M&S director of customer insight and loyalty. "People
are getting tired of being completely spammed with untargeted,
irrelevant offers."
Steve Laughlin, retail expert at IBM Global Business Services, said
stores were only just starting to work out how to make the best use
of the mountains of data they are gathering and make money from it.
When IBM analyzed customer data for a coffee chain, for example, it
found the air temperature point at which people tend to order cold
drinks over hot drinks was several degrees lower than the chain had
expected, Laughlin said.
"They were sending promotions for hot drinks when they should have
been sending promotions for cold drinks," he said.
Lasse Bolander, chairman of Denmark's largest supermarket chain
Coop, said offering targeted discounts was particularly difficult
for grocery retailers as customers shop so frequently and for a huge
range of items.
That explains why some retailers - like British upmarket supermarket
Waitrose - are allowing loyalty card holders to pick the items on
which they want special offers.
But Bolander, whose Coop chain is owned by more than 1.5 million
Danish customers who share their data in return for discounts, says
retailers need to be careful.
"We have to make it transparent what we use the data for and easy to
opt out," he said. "Until we are absolutely certain we can give
people the right offer at the right time we should take a step back
- otherwise people will get annoyed."
(Additional reporting by James Davey in London; Editing by Pravin
Char)
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