Retailers: Don't Track Me, Bro

A lot of money is being put into trying to figure out what I do when I walk into a store.  Nomi just raised $10M and Prism Skylabs just raised $15M.  These efforts aren't new.  Path Intelligence raised a million bucks to do this years ago.

Given the time I spent a decade ago doing not only venture capital, but investing in private equity funds that buy retail companies, I find this data collection fascinating.  I was on the team that did a leveraged buyout of AMF, the bowling alley company--so I've looked at lots of plans to upgrade in venue customer marketing.  It's very cool to think about.  (Side note, I know more about the economics of bowling than most VCs.)

I don't freak out about being tracked, but I'm not every customer.  

You don't have to go very far before you realize that the majority of people aren't very comfortable with this.  I mean, if they're split on it when it comes to tracking to prevent terrorism--how do you think they feel about it when it comes to tracking me as I walk around a store?

Don't get me wrong--I have the utmost respect for the entrepreneurs behind these products and as a data wonk, I love the idea of sophisticated customer traffic analysis.  

I just think there's going to be a very severe customer backlash against this.  Privacy is a very sensitive topic these days--and people have only begun to scratch the surface of understanding what carrying around mobile devices means for privacy.  Did you know that your EZ Pass tracks you even when you're not at the toll booth paying tolls?  One guy rigged a setup to test how often his EZ Pass gave away his location and the results were surprising.

A few years ago, there was a huge consumer fluff up over behavioral tracking on the internet.  I think it's only going to be magnified when it comes to tracking your movement in person.  

And yes, I totally have a dog in this race.  I invested in a company called SocialSignIn.  SocialSignIn is going after the heart of the problem--retailers and venues have no relationship with the people in their physical spaces.

No one really needs tracking data--unless that data helps you bring in revenues.  That's the point of data--it's revenue optimization, and the main problem that retailers have is getting more people in the store.  They're looking for more marketing channels and the best potential marketers of your business are the ones that already frequent your store.  To me, if you're going to connect with a customer using their mobile devices, it seems obvious that you'd want to form an actual relationship with the customer, not just passively watch what they do.

SocialSignIn makes getting on to wifi easy in a venue--no more struggling to Instagram photos of that dress you want to buy from deep within a retail's lead box.  It gives them a value proposition, like easy access to wifi, to tell a store who they are, sign up for more info, tell their friends that they're there, and create lots of earned media around the experience.  

If you look at Google, they gave the analytics away for free and make money off the marketing channel--a marketing channel that users opt into.  They tell you what they're looking for.  People have a customer relationship with Google and that's what makes it such a great marketing channel.  It provides a useful service so we don't mind being marketed to in a relevant way.

Offer first, then ask.  That's why I like the SocialSignIn service and the business--and why I think the future of retail marketing in venues is about relationship building, not secretly tracking people.