So the question is… Is there really any personal privacy left, either online or off? Some of the ire and anger focused on Facebook and online ad platforms seems to be a bit misplaced when most of us have been freely giving up this information off-line for years.  Almost every aspect of our commercial lives, from signing up for a vacation contest, to subscribing to a magazine, to banking, involves surrending control of personal information.  Depending on your point of view, Facebook founder Zuckerberg is either a forward thinking genius, or a money grubbing, self serving, arrogant, creep. Either way, he has made a valid a point.  In the modern world, personal privacy is an illusion, and people need to get used to the fact.  They can embrace it, or fight it, but people ignore this new reality at their own peril. 

Check out these recent thought provoking posts from Adotas.

Is this Mark Zuckerberg’s real opinon of Facebook users?

Interesting perspective on offline consumer targeting versus online targeting.

Perhaps most well know is Paco Underhill and his Envirosell crew. Since the 80’s they have been researching, cataloging, tracking and evaluating shopping habits.  Now they have taken the observers with clipboards out of the aisle and placed them behind video screens in adjacent rooms or on the other side of the country. Much like unmanned military aircraft, they hover overhead, collect data, formulate plans and ATTACK! An overstatement perhaps, but they certainly do collect very specific data about how you shop, use the data to formulate plans to alter your shopping behavior and ultimately target you more specifically as a shopper.

While this process currently occurs over an extended time frame (assortment planning, store fixture remodels, visual resets) it’s conceivable that observers could one day have tools (weapons) to deploy immediately to adjust your shopping behavior and interest in real time. Here are some techniques that we might see.

Retargeting: You entered the store, pause for a minute to run your hand over the stack of cashmere sweaters on the front table, hold one up to yourself and look at the price tag. Interested but not sold.  As you move about the store, video screens in other displays keep showing you images of those cashmere sweaters, (always on beautiful people like you of course!)   This technique is used extensively in online display advertising, presenting you with ads about products you viewed on other sites. A good store associate will do something similar as they keep bringing you that cashmere sweater as part of an ensemble of other items to try on but observers could target more shoppers.

Customization:  As you enter the store, your phone identifies you to the store’s WiFi system. Instantly, your interests, shopping history and other personal information are gathered from Facebook, Blippy, and your favorite online retailers. As you move about the store you are presented with a changing array of visual, olfactory, aural and physical cues that highlight and entice you to select items the data says you are predisposed to buy. Perhaps this is an automated process but more likely highly skilled observers in distant “observation centers” would watch your movements and use the collected data on their screen to direct complex store fixtures and displays to create a customized experience for you. (Perhaps these observers would work on commission…)

Collaboration: Observers might share information about your activity in one store with observers and sales staff in another. Good information leading to a sale, perhaps a tip about your interest in cashmere, might earn a commission or other compensation for the supplier of the information. Information about your shopping habits from many stores might be combined to create a more detailed and effective profile of your interests and buying habits.

Eavesdropping: We generally think of the “eye in the sky” type of observation via overhead cameras capturing visual images. Observation will surely expand beyond this rudimentary level to include watching facial expressions and listening to personal conversations. Cameras and microphones in store fixtures will capture your reaction, emotions and conversations at every display station. Talking with your friend about that dress you saw on your favorite show last night? A sales associate carrying something in the same color or style might approach you. How did she know? If this sounds creepy, or if you say you would never allow a store to listen in on your private conversations, then you had better try and close that Facebook account and stop using Gmail. Those are just two examples of companies that actively listen to your conversations and track your activities so that they can offer you goods and services tailored to your interests. If we allow it online, why not allow it in the store?  Biometric software might identify your look of horror as you read the price tag on an item and instantly offer you a discount if you purchase before leaving the store.

Group Think: On a less personally invasive note, music, lighting and graphics are tools every retailer uses to set the mood and style of their retail environment.  Through observation of the mix of customers in the store at any given moment, these tools could be manipulated to increase sales. The mix of ages, genders and even ethnicities in the store at any moment might be used by observers to alter music mixes and volumes, lighting levels and focus areas, graphic components, text sizes and images. Prototypes are very static in many ways and reacting to the mix of people in the store more dynamically could increase the enjoyment and interest level of shoppers and consequently drive sales.

Do observational technologies and initiatives promise shoppers a loss of privacy or more opportunities and a more engaging shopping experience? Could automated and remote responses to customer activity in a store trump the power of well-trained and motivated in-store staff? Does crossing the threshold into a store waive your right to privacy or do you retain your rights until you opt-in to being observed and approached. These are important questions both in online commerce and in the brick and mortar retail environments. What do you think?

And by the way, dont miss this NYT article…

As Mr. Underhill pointed out, people are taped dozens of times each day doing routine chores like pumping gas. Cameras, it seems, are pervasive. Stores are merely the latest frontier.

“We live our lives surrounded by them,” he said.

Putting all the partisan squabbles aside, it might be interesting to take a look at what creative ideas these “retailers”, their consumer consultants, and their retail designers have brought to the table in terms of innovative retail design and visual merchandising.

Software is by nature interactive and one of the key features of the Microsoft stores is customer interactions with the software product and options reflected onto a continuous band of wall display screens.  A visual merchant at Nordstroms once complained to me that they had lots of video screens but nothing to put on them.  Microsoft’s stores solve this production problem by featuring the customer’s interaction with the product. While some customers found that being completely surrounded by digital activity made them a bit dizzy, others reported a sense of openess and expansive space as everything from landscape vistas to video games came into view.

Apple has the Genius Bar and Microsoft the Answers Bar. Whatever you call it, it’s almost a no-brainer that by moving the place where you go to get help with products away from the cashwrap and the exit, you will increase customer retention and sales.  Going to the “bar” is a much better customer service solution than asking customers to chase a sales associate around the store.  It funny to think that the Genius Bar was seen as such an innovation when Apple made it a feature of every store. When a customer has to head for the cashwrap and the store front exit just beyond, they are much less likely to dive back into the merchandise than to continue out the door without making a purchase.

The Microsoft Store also features “Surface” tables. Interactive table tops, surrounded by comfortable seating, where you can relax, learn and play.  So many stores seem to always be selling so hard that they rarely create a place for relaxation, interaction and play.  The Apple and MS stores may not be taking this “third room” concept as far as say Starbucks but maybe they should. Some customers have taken things into their own hands declaring the Apple’s Genius Bar the Best Place to Date.   Still other Apple Store lovers make YouTube videos on the state-of -the art gear or use the store as a kind of mobile office space.  Microsoft stores haven’t engender this type of creative use and loyalty yet. 

Every retailer’s dream is to make their store that “got to see it, I can’t live without it” kind of place. Take a closer look at these two rivals and grab some interactive retail ideas that work.

Now the big boys want some of this local flavor along with the  customer loyalty and customer insight it engenders.

A raft of consultants are making a living advising major retailers on such esoteric subjects as supply chain integration of local inventories.  Regional managers are reliquishing some control over how each location responds to local expectations of customer service, visual merchandising and event implementation.  Store designs prototypes are being modified at every level from the merchandise assortment, to visual display, to window, storefront and signage configurations.

Starbucks has begun to rebrand and redesigns some stores as local “coffee houses”.  Best Buy adjusts store hours by location while featuring local and regionally related items front and center. Macy’s is implementing a localization strategy that includes “incubating” and “launching” local products discovered and developed by regional planners and merchants.  Even some Internet retailers are combining online ordering with local pickup.

Does making it local, make it better? Can chain retail and mega-brands ever really capture the magic of your favorite local shoe store, kitchen shop, used book store or coffee bar? Big retail is recognizing that people in a community care about what happens to local merchants. They don’t want standardized everything and they just don’t trust big companies (Say Toyota, Tysons, Mattle etc…) they way the do the local food producer, neighborhood craftsman or downtown vendor.  Does anyone on Yelp wax poetic about the Sam Goody store at AnyTown Mall?  Despite the preditions of the collapse of independent retail in the face of WalMarts and Amazons, local vendors hold on and in many cases thrive, at the expense of their chain store brethern.

In the end, there are real benefits to both standardization and to local knowledge.  The best and most successful retailers, both independents and chains, will find ways to make good use of both.

Even as retail construction continues to falter, retail employment has finally begun to improve.  The U.S. Department of Labor reports job losses are slowing down.  While the U.S. economy lost 22,000 jobs overall to start 2010, the retail industry added 42,100 jobs in January.  Apparel, grocery and electronics lead the way with hardware and building supplies trailing.

Retail Architectural firms continue to struggle with a contraction of billing for retail design services which began in 2008. A recent AIA survey based on information gleaned from their membership, Moody’s, McGraw Hill, and others, suggests a 2010 decline in retail construction of over 17%. This compares to an overall 13% decline for all non-residential construction.  Improvement of 1.8 percent is predicted for 2011 but details for the retail industry were not broken out. Once again it is difficult to determine if these statistics include small retail infill and tenent improvements or only development projects.

Some indicators point to overall economic improvement in 2010 but both residential and non-residential construction typically lag emplyment and general economic recovery.  Is February too soon to start looking forward to next year?