Modern retail collects maximum information about its customers. They are interested not only in what stores we go to and what we buy in them, but even where we eat, where we sleep and what we do in between. Retailers buy mobile phone data that can track where and for how long people shop, eat, watch movies, where they go before and after. Retailers make the most of location data from customers' phones.

 

 

The Hill Country Galleria in Bee Cave, Texas, used this information to determine that many buyers own pets. As a result, fountains were installed here, special babysitters appeared and photo shoots were organized "Santa Paws" for furry friends. According to analytics from CBRE Group Inc., due to this solution, the time spent by customers in the mall increased by 40%.

 

A shopping mall in Chicago found that it attracted customers from Asian neighborhoods, so I decided to fill the vacancy with upscale Asian restaurants.

 

Dunkin'Brands Group Inc., which opened 278 new donut stores in the United States last year, used phone data to make sure that new stores would not pull customers away from existing outlets.

 

 

Buying mobile phone data allows retailers to identify personal data that paints a picture of who consumers are. This helps you decide which stores to open and how to advertise. Information transforms business. And this raises privacy concerns.

 

The idea of tracking a business makes some people restless. Every company interviewed for this story said they preferred not to use information that could identify people. But for the most part, they use an honor system because the rules governing data remain relatively weak.

 

By itself, this practice is called location analytics, and the industry is expected to grow to $15 billion worldwide by 2023 (from $8.35 billion in 2017), according to the company Placer.ai , dealing with mobile data. More than half of the retailers surveyed last year said they were collaborating with third-party firms to collect location data. This is a big step compared to the times when mall owners drew concentric circles on the map to determine where to place ads.

 

 

Historically, we used to be able to look at the theoretical behavior of people. Now we can get real data that we actually need to rely on, and we found that trading platforms look completely different from what we used to think,"said Alan McKeon, CEO of Alexander Babbage Inc., which collects and sells phone location data.

 

Phone apps collect user data throughout the day by dropping beacons and collecting latitudes, longitudes, timestamps and device IDs. Aggregators;(such as UberMedia Inc.)they buy information and sell it to analytical companies;(such as Alexander Babbage Inc.), which sort it for retail use. Typically, such a company pays six-figure amounts for data collected, while data packages for retailers cost only $15,000.

 

UberMedia says that they monitor 800 million active devices per month and have a total of about 14 trillion observations of the general location and 4.5 years of historical data.

 

 

To find out all the relevant details, including age, income, ethnicity, level of education, number of children, etc., firms link the evening location of the phone with US Census data.

 

"We don't have any information about who owns the device, so we contextualize the information by checking where the phone sleeps at night," explained Alan McKeon.

 

Location data is not the only thing being tracked. There is also psychographic data that includes a person's behavior and spending habits, as well as chats on social networks.

 

Spatial.ai A startup that studies online negotiations collects location data for 72 categories, from geeks to farmers, and helps companies determine whether specific personality types match sales. For example, frequent topics in the hipsters segment include antiques, vinyl albums, and coffee. Working with Spatial.ai , the owner of the shopping center Brixmor Property Group Inc. revealed a lot of online conversations about a "bachelorette party" in the vicinity of his shopping center in Newtown, Pennsylvania. And that's why, according to Jim Taylor, CEO of Brixmor, Brixmor has opened a "woman-friendly organic concept" called Harvest Seasonal Grill instead of, say, a steak restaurant. Due to the correspondence, the company managed to understand the formats uniting the community much better in order to use them in its business model.

 

 

Meanwhile, privacy concerns are piling up. According to Laura Shevel, CEO of StreetLight Data Inc., as the market has become more competitive, some providers have started to "cut corners". So, her firm, which studies travel models to improve urban planning, lost a potential client due to a competitor, refusing to sell "raw trips" or trips of individuals. Unlike that very competitor, StreetLight sells data only about groups of people, so if the data sold is ever compromised, the personal data of individual passengers will still be protected.

 

"We don't want to use technology in a way that undermines customer trust," said Jim Taylor of Brixmor. The owners of shopping malls are only interested in the data that allows them to generate more traffic, increase sales volumes, and eventually increase rents.

 

Author: Tatiana Egorova

Photo: from open sources