By: Joshua Peterson
All companies need to participate in market research. There are various reasons for using market research, whether for determining the viability of a new product, where to launch a brand, or determining how consumers use and respond to current products. With these different reasons for using market research, comes a wide array of methods. Traditional methods of collecting market data include such things as surveys and focus group testing. However, with advancements in technology, a new type of market research has begun to emerge in recent years.
Using Wi-Fi signals within brick and mortar locations, companies have begun to collect data from customers’ smartphones. By using the phone’s Wi-Fi searching function the stores are able to track the location of the phone and therefore the carrier. The idea behind this is the company is able to locate where a customer is within the store. This provides them with information about what products this individual is showing interest in. In conjunction with this new system, companies are also using improved video monitoring, traditionally used for surveillance, to further identify the consumer.
The combination of these two systems provides a great deal of consumer information. Stores are able to judge what product a customer is looking for and how they react to any variables that may exist, such as a sale price. This is a great improvement over traditional methods due to the non-response, interviewer bias or other variables. This method collects data during a time when consumers are in a “natural” environment.
However, there are some major differences in these two techniques. First, cookies only store data that provide information to sites regarding what consumers are looking for. These in-store monitoring systems collect visual information, such as facial reactions as well as location data. Another difference is the ability to opt out of these systems. Cookies can easily be disabled or enabled. If cookies are disabled, these online retailers are no longer able to see this search data. For in-store monitoring, the only solution appears to be leaving your phone behind or turning it off. These are much greater inconveniences than disabling cookies. In addition, the technology used at these stores is not actually limited to within the store environment. A person’s smartphone can be picked up just by walking past a store that has these systems. This creates an environment that doesn’t even give the person an opt out option of not entering these locations.
Overall, this type of market research appears to be a great concept for retailers, but the transparency to consumers must be taken into consideration.