You're Being Followed... but That Might Not Be a Bad Thing

Retailers are getting in on the spying game, but not to worry -- they don't know it's you.

Mar 28, 2014 at 4:41PM

Mall Roberto Verzo
Photo: Flickr/Roberto Verzo

It's a fact of the Internet that when you're online, you're most likely being tracked. That's especially true while shopping online. Now, brick-and-mortar retailers are getting in on the action by monitoring their customers' habits within their stores. Here's what you need to know, and how investors can profit from a little spying.

Hall monitors
When you enter your local mall or big-box retailer, management may not have to keep an eye on its security monitors to keep track of you. If you have Bluetooth enabled on your phone, or join the store's WiFi network, there's a good chance that a monitoring system is watching your every step.

By using the close-range communication technology, retailers can monitor what area of the store you head to first, how long you stay there, and where you go next. They often employ companies like iInside, a location analytics company, to track and analyze customer behavior.

With the type of service offered by iInside, your motions are collected, encrypted, and anonymized before being sent to the retailer. So even though someone might be watching you individually, the overall trends are really what retailers want to know.

Among the retailers that have spoken out about the use of this monitoring technique are Nordstrom (NYSE:JWN), Cabela's (NYSE:CAB), and Family Dollar (NYSE:FDO). Though other large retailers, like Target and Wal-Mart, disclose that they use data collected by their security monitors, they have been less willing to discuss additional data collection techniques.

Benefiting from spying
As online shopping has cut into the share of retail sales for brick-and-mortar locations, the use of tracking services has become increasingly popular. Not only does the information show a retailer how many customers are frequenting the stores, but also what departments are most popular, what promotions are drawing attention (and sales), and areas that need to be improved.

Taking the technology a step further, customers with individual store apps may also receive personalized recommendations for products once they enter a store. Though this is beyond the passive monitoring that watches for trends, the personalized ads give retailers another opportunity to interact with customers once inside their doors.

The information provided by the tracking data allows retailers that are still focused on physical locations to optimize their stores. Not only that, but it allows them to better track their employees, increase customer service rates, and make checkout lines more efficient.

Tsa Grant Wickes

Photo: Flickr/Grant Wickes

Saving time
This type of tracking isn't just happening in stores -- airports now allow customer monitoring services to monitor passengers through their halls. According to iInside chief product officer Patrick Blattner, for every minute you're stuck in the security line at the TSA counter, it equates to a dollar of revenue for the airport (via retail shops).

In traditional retail stores, the data has discovered a trend that often leads to wasted time: lane hopping. A review of data from iInside's client data showed that customers will switch checkout lanes opportunistically 18%-20% of the time, with 9%-10% switching twice. The result usually adds another two minutes and 14 seconds to the customer's wait time.

So, by using technology to anonymously track customers' movements, airports and retailers are able to see how changes could improve efficiency -- ultimately leading to consumers saving time. Because no one likes standing in line.

What this means for investors
Ultimately, the goal of this tracking technology is to improve efficiencies and boost profits. If retailers can find small advantages from monitoring its customers within the store locations, they can exploit that knowledge and profit from it. For investors, the use of this information should be a welcomed sight, as anything that could help big-box retailers regain some ground from online shopping is a big win.

Two stocks changing the retail world
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform, and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

Jessica Alling has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers