What Everybody Knows About You: Retailers

This article is part of a continuing series about data collection today. The previous articles discussed devices ranging from robot vacuum cleaners and watches to web browsers. Now we’ll see where all this data is going.

This article is the most extensive and complex in the series. Retailers—perhaps not the bodega down the hill from you, but chains and other large vendors—are insatiable information collectors.

The chief obsession of retailers is not to grab you by the virtual throat and make you buy the products they think you want—rather, the data is mostly used in the aggregate for such corporate operations as purchasing, marketing, shelf allocation, etc. In other words, the data helps them avoid running out of facial tissues in the Winter and means you can find the vinegar next to the oil.

To understand the basics of retail data collection, try the article « Metrics Every Retail Marketer Must Know About Their Customers. » Another site from data science firm Tredence describes retail customer analytics and how retailers can use results.

Customer tracking actually has a long tradition; it didn’t start in the digital age. A historical survey goes far back in time, but says that data collection really picked up in the 1980s when scores installed scanners.

By the 2000 decade, data was collected through several « channels. » Consumer surveys have been used for a long time to learn customer preferences. Now retailers add information about your residence, travel time to the store, timing and frequency of purchases, method of purchase (credit card, for instance), and response to sales promotions. And more recently, retailers are adding « social data » that checks what you’re posting online.

Another article defines « four basic kinds of retail customer data »: identity data, descriptive data on purchases, behavioral data that ties together identity and descriptive data for « more in-depth patterns that reflect actions, » and qualitative data from customer feedback that « represents what they think. »

The rise of today’s far-reaching data collection that includes all manner of financial and personal information is traced in the book The Hank Show: How a House-Painting, Drug-Running DEA Informant Built the Machine That Rules Our Lives, by McKenzie Funk. It’s an entertaining but thought-provoking biography of Hank Asher, who created the data landscape that retailers, banks and governments all use in the U.S. today; LexisNexis is one part of his legacy.

Inside the store, Bluetooth connections and cameras can show what you’re looking at. (Of course, cameras are also installed to protect staff and prevent thievery.) Another article with a broad perspective talks about your use of browsers (which we’ll get to in a later section of this series) and the use of location data and eye-tracking in the store.

The many uses of this data are listed in another article.

My wife and I recently moved, and it took three and a half weeks for the first home goods catalogs to come. Of course, we had ordered some things online, and addresses get around.

How intimately can a retailer know you from this data? An example can be found in a company fined for overstepping the line. « The ICO found that catalogue retailer Easylife Limited (‘Easylife’) had profiled 145,400 individuals for inferred health conditions without their consent, based on certain ‘trigger products’ that they had purchased from Easylife’s Health Catalogue. For example, if a customer bought a jar opener or a dinner tray, Easylife would infer that the customer might have arthritis, and then call them to market glucosamine joint patches. »

The Easylife incident was verified in court, unlike the famous Target diaper incident whose accuracy is doubted by some researchers.

The next article in the series moves to financial institutions.

<< Read the previous part of this series