Watching you while you shop: The retailers using CCTV footage to analyze their customers' spending habits American Apparel, Famous Footwear and Walmart use security cameras to study shoppers’ movements in order to get them to spend more in store
21:42 GMT, 24 October 2012
From a small coffee shop in San Francisco, to American Apparel and Walmart, retailers are using footage from security cameras to study shoppers’ movements in order to improve their marketing.
As security cameras have grown more sophisticated, technology like the Prism Skylabs software, collects security camera data to reveal foot traffic, line formations, where and how people linger, which products are most popular, and the aisles people browse in the most and for how long.
But because retailers technically use this footage for security, they are under no obligation to ask customers for permission to record them, or even disclose the fact they are watching them via video.
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Surveillance: A coffee shops in San Francisco, The Creamery, uses footage from security cameras to study shoppers' movements in order to improve their marketing and services
According to Ad Week, T-Mobile uses surveillance data to decide on the design of its stores, while American Apparel analyses its security footage figure out how best capture the most shopper attention with its clothing displays.
According to MarketsandMarkets, a global market research company, this kind of video surveillance as a service, which is also called VSaaS, is expected to grow in worth from $474 million in 2011 to nearly $2.4 billion within the next five years.
While not as sophisticated, surveillance cameras have actually been used in marketing for a number of years.
Marshal Cohen, chief retail analyst of The NPD Group, told Ad Week he used to employ security videos to watch shoppers as they left an escalator, wanting to discover which way they turned so he knew where to place displays.
Now, digital innovations like cloud technology and have given
retailers cheaper, faster and easier ways to use their store's security
footage to interpret consumer patterns that go unnoticed on the shop
'A mobile security video lets me stand above the action, and read the crowd no matter where I am'
Prism Skylabs uses security footage to create stop-motion time studies and heat maps to show customer movements, and which items customers touch or pick-up most through the day with a red,
green or blue marker showing the most popular merchandise.
The Famous Footwear chain also uses security footage to help managers place promotions in the optimal spot.
Jon Grander, vice president of asset and revenue management at the
Brown Shoe Co., which owns Famous Footwear, said: 'We were posting so many ads in our
stores they were like wallpaper and became meaningless.
Big brother Prism Skylabs software collects security camera data to reveal where and how people linger, which products are most popular, and the aisles people browse in the most and for how long
we can put the ads where we have people’s undivided attention, such as
the seating area where they try on shoes. Little changes make a big
According to research and surveillance specialists, Walmart has employed an internal team to test new ways of using security footage to enhance in-store marketing.
Prism Skylabs CEO and
co-founder, Steve Russell, said: 'This kind of information helps managers
make micro-merchandising decisions such as, “will it increase sales if I
put out the yellow sweaters or the blue sweaters”'
The Creamery, a San Francisco cafe, knows the benefits of fusing security footage with marketing analytics firsthand.
'This information helps managers
make decisions such as, “will it increase sales if I
put the yellow sweaters here”'
Owner Ivor Bradley said he uses his smartphone to watch streaming footage via the The Creamery's security cameras.
He explained: 'The mobile video lets me stand above the action. It lets me read the crowd no matter where I am.'
He added that recently, while keeping
an eye on the store's cameras during breakfast rush hour, he noticed
that people would often attempt to lean across the counter display, and
cut off other customers, to pick up a cup of fresh orange juice.
said his busy staff didn’t notice, yet it was so clear on his
smartphone monitor. 'The camera saw what I didn’t,' Mr Bradley said.
'Sales of the fresh OJ shot up 100 percent,' after he moved the juice
closer to the counter.
Secret tools: According to research and surveillance specialists, Walmart has employed an internal team to test new ways of using security footage to enhance in-store marketing
Reaping rewards: The Creamery and Famous Footwear knows the benefits of fusing security footage with marketing analytics firsthand
'Plus the line moved noticeably faster,' he added.
American Apparel also saved 40per cent in fixed expenses by using
RetailNext, a system that aggregates surveillance data for marketing purposes, according to Stacey Shulman, chief information officer.
She said: 'Our
technological changes, including [improved] traffic counting, have
collectively impacted our sales, theft and labor costs.'
While a store's surveillance-turned-marketing footage is not used to identify specific shoppers (Prism hides customers’ identities by blurring their faces or only using their heat paths), it seems retailers want to keep this growing crossover camera practice quiet.
Pam Dixon, executive director of the World Privacy Forum, said that while online shoppers are aware their purchasing habits will be tracked on the Internet, people have an expectation of privacy in brick-and-mortar stores.
Ms Dixon added: 'It is crucial for retailers to disclose that camera-tracking information is being used for marketing and to offer shoppers a way to opt out. It’s especially important in the case of children and in sensitive areas of stores such as pharmacies.'
Time.com polled more than 500 readers in September on their feelings towards these crossover camera practices, and 62per cent admitted they thought it was 'creepy'. A large 40per cent of people said they would avoid retailers that did so, if they were made aware.
VIDEO: See a time-lapse of shoppers at The Creamery: