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BOOK REVIEW: The aisles have eyes to track your shopping

Apr 13 2017 05:00
Ian Mann*

The Aisles Have Eyes: How Retailers Track Your Shopping, Strip Your Privacy, and Define Your Power, by Joseph Turow                                                           

THAT large amounts of data are being collected about ourselves and our lives is hardly new. All our digital financial transactions are collected, our telephone calls (if not their content,) are collected, so are our driving patterns, and so much more. How this affects our lives is possibly something we are now alert to, until we get the call from our bank querying ‘unusual purchases’ of large quantities of make-up and running shoes.

What is startling about this book, though, is the rigour and sophistication with which retailers are gathering data on our private and public lives. It would be absurd to suggest that this gathering of data and turning it into information is evil: we want our credit card company to know when our credit is being used in ways that are unlike us, or the driving pattern of our car does not match our driving style.

Similarly, it is useful to know of specials that would interest us, or that products we have been using which are being replaced by something better.

The second chapter of this thoroughly researched book covers the evolution of retail. Little has changed in the principles of successful retailing, though much has changed in how these principles are applied.

The salesman who travelled through the village or between farms had to comply with the same basic principles as does the modern retailer. You must know your customer, buy your wares well, sell your wares well, and maintain your customer base while growing it.

The travelling salesman had to know the villagers’ interest in the products he had to offer: he had to buy these goods at prices that would allow him to cover their cost and make a profit. He had to know his customers well enough to be sure of who to offer credit to, and who not. He had to maintain his wares so that they were attractive, and present them to customers so that they would be desirable.

Without external rating systems, he either had to insist on immediate payment or, to be able to extend credit, make an assessment of the buyer’s financial strength.

With the advancement of the retail system and the growth of retailers, stores began to develop their own credit systems, offered only to financially strong families. Wares were able to be advertised in newspapers and pamphlets, and their quality began to be assured through brands. More goods were available on display, giving the shoppers a better view of what they were being sold.

As towns and cities grew, so could retailers. Competition became keener and the elements of retail needed to be addressed differently. The purchasing power of retailers lay in quantity and attracting, knowing and keeping customers became more difficult.

Era of the voucher

In the absence of the sophisticated technologies we have today, various ingenious methods were employed to keep track of what was sold and to whom. One of the most enduring methods was the voucher. There was the discount incentive to buy the goods, and a method of knowing if the discount offer changed behaviour.

Vouchers offered a way of knowing at which outlet the goods were being bought, and so on. It was a time-consuming process and a clumsy one, but one of the best on offer. Technological advances made the basic idea of vouchers much more cost-effective and powerful.

In the forefront of the sophistication of retailing was Walmart. It was Walmart that embraced technology in its quest for ever-increasing efficiencies, with an eagerness never seen before. Launched in 1962 by Sam Walton, the chain grew systematically from its first store in Rogers, Arkansas.

One of the reason for Walmart’s success was its obsessive focus on cost-control throughout its supply chain, which resulted in Walmart growing to a point where few other retailers could buy in larger volumes and at lower prices. Through its size, Walmart could cease buying from wholesalers, and buy only from manufacturers.

Their computer systems at the time were reputed to be larger than the Pentagon’s. Their use of barcoded boxes of goods, not only goods themselves, made for ever-greater efficiencies and control of their processes.

Today, pervasive technological advances can enable stores to identify loyal customers. The value of these customers is deemed to be high, because the store doesn’t need to attract them, only retain them.

Power of the cellphone

Perhaps the most powerful piece of technology available to the retailer since the advent of the super-powerful computer is the ubiquitous cellphone. This always-on, always at-hand device, offers benefits so necessary for the growth of retail stores today.

When each store had only a few customers it was the duty of store serving staff to know their customers, what they liked, and how valuable they could be. Today, that would be impossible in a supermarket or clothing chain.

On entering a clothing store your cellphone can identify you, your picture can be sent to a store manager who can then greet you by name, and guide you to the new range you have looked at carefully on your home computer. If you commented on how good a friend looked in that new-cut suit on Facebook, you could be guided to one on the rack.

Similarly, having purchased locally made pasta on each of your last visits, you could receive a discount voucher to try the imported Italian version. 

As technology advances, ever more opportunities to entice, reward, and promote are available to retailers to get a greater share of your spend.

Do shelves have eyes, staring at you? Of course. Does everything you interact with in the internet-of-things have this capability too? Of course. The value of this book lies in its comprehensive and insightful overview of the evolution of retailing, and its intriguing exposé of the sophistication and use of advanced technologies today.

And yes, you will be surprised at how everything is looking at you.

Readability:   Light ---+- Serious
Insights:        High -+--- Low
Practical:        High ---+- Low
 

* Ian Mann of Gateways consults internationally on leadership and strategy and is the author of the recently-released Executive Update. Views expressed are his own.

ian mann  |  opinion  |  book reviews
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