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Nordstrom's Been Watching You
By: Maryann Fabian
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Nordstrom is — scratch that — has been gathering information from customers through their smartphones as they walk through their stores. Just a couple days after the story broke and customers felt a little creeped out, a spokesperson for one of the country’s most admired retailers confirmed it stopped using the technology.

The idea was fascinating, really; a Google Analytics of sorts for brick-and-mortars developed by Euclid Analytics. Finally, a way to put real numbers behind those burning questions from the Marketing department: Did my direct mail campaign encourage repeat traffic? How loyal are my existing customers?

Here’s how it works: As shoppers entered the store, sensors placed in various locations would detect the MAC addresses that smartphones use to scan for wireless networks. It can tell that 20 people stood in front of the designer jeans display between 2 and 3 p.m., or how much time a customer spent in a certain department before making a purchase.

So when the Merchandising team asks, “Are my window displays drawing shoppers?” it measures the capture rate before and after install. It also provides a bounce rate so you know if a floor layout confuses customers or makes them want to stick around. And it tells you a customer’s duration of visit, so you know how often you should refresh your end units.

When the Operations Department asks if they should extend business hours, the walk-by metric lets you measure potential customers who passed by the doors after you closed. It can help with staffing decisions. And, for those who wonder if their outlet store is luring too many customers away, there’s a way to measure how many customers shop at both of your stores in the same month. (Nordstrom used it to measure traffic at Nordstrom Rack, too.)

A rather wordy sign placed at the entrances of 17 stores told customers that it was gathering information and advised them to turn off their smartphones (or disable Wi-Fi) if they didn’t want to “participate.” But Nordstrom’s Tara Darrow recently told a Fort Worth TV station that the gig was up: “We’d been testing Euclid since September and have said all along this was a test for us. We had been discussing what made sense in terms of concluding the test; after 8 months we’d felt like we had learned a lot and determined that it was the right time to end it,”

Euclid works on an opt-out system. It can’t tell your age, race, who you call, or the websites you visit. But if you have concerns and don’t want to be part of another retailer’s experiment, you can go to the Euclid Analytics site and follow the “Privacy Matters” link to remove your phone’s identifier from the database.

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About the Author
Maryann Fabian is a copywriter who has crafted the voice of some of this country's best brands.
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