9th March 2016

Can facial recognition be a market intelligence tool?

High-end US department store chain Saks Fifth Avenue opened a new branch in Toronto’s Eaton Centre recently – part of a new generation of upmarket retailers setting up shop in Canada’s largest city to tap into an under-served luxury market.

What makes this particular store opening stand out from the rest though, is what is hidden among the sumptuous furnishings and opulent products displays, for Saks boasts security hardware almost worthy of Fort Knox. As well as hurricane-proof glass and steel bollards to deter the more spectacular kinds of theft, Saks is the latest retailer to install store cameras featuring advanced facial recognition software, capable of isolating individual faces and tracking them as they move through the store.

This cutting-edge CCTV technology has been installed by Saks with the principal aim of spotting and tracking potential shoplifters to prevent thefts before they happen. Apparently, the system is able to connect to local police databases and cross-reference the faces it records with known criminals to enable store team members to remove suspects before they commit a crime.

However, Minority-Report style crime fighting and the prevention of stock shrinkage are not the only reasons for Saks to install such advanced facial recognition technology. It is also being pressed into service by Saks and a growing number of retailers as a market intelligence tool, using it to track ordinary customers as they travel around the shop, measuring dwell times on individual displays, analysing reactions to products and monitoring traffic flow.

The aim of all this, of course, is to learn more about what customers are responding to in the store to improve sales. With facial recognition, store managers can follow multiple consumers to determine which displays and which items are encouraging them to buy and which ones aren’t – giving them the information they need to improve underperforming displays and find ways to boost sales of products consumers show interest in but don’t actually buy.

Online retailers have had access to this kind of information about their customers for some time. Cookies and an array of other analytics tools to allow the likes of Amazon to keep track of how consumers use their sites and build profiles of target audiences to provide a more personal experience for individual customers.

Saks’s facial recognition technology simply levels the playing field for traditional bricks-and-mortar retailers. It gives stores access to vital data about how their customers respond to their products and shop floor, enabling them to tailor their premises to ensure it offers an attractive, enticing space consumers will want to spend money in and come back to in future.

Unlike the tools used by online retailers though, facial recognition does not preserve consumers’ anonymity. People are followed and profiled from the instant they enter the shop to the moment they leave. There is already backlash against “Big Brother” governments over the propagation of CCTV and speed cameras. How do the public feel about their movements being monitored not for security purposes, but to get a better idea of how they shop? What impact could this have on retailers’ brand image?

It’s early days for facial recognition technology, but it certainly seems to offer scope for traditional retailers to learn even more about the people shopping at their stores to make sure they continue to provide the best possible experience for consumers, potentially boosting sales and marketing share. It remains to be seen though, whether consumers would be happy to have all of their favourite stores watching their every move.

By Michael Wood, Senior B2B Copywriter