http://online.wsj.com/article_print/0,,SB110357897849105150,00.html
The Wall Street Journal
December 21, 2004
MARKETING
'Video Miners' Use
Hidden Cameras in Stores
'Video Miners' Use Cameras
Hidden in Stores to Analyze
Who Shops, What They Like
By JOSEPH PEREIRA
Staff Reporter of THE WALL STREET JOURNAL
December 21, 2004; Page B1
BRAINTREE, Mass. -- Stepping into a Gap store at the South Shore Shopping
Plaza on a recent evening, Laura Munro became a research statistic.
Twelve feet above her, a device resembling a smoke detector, mounted on the
ceiling and equipped with a hidden camera, took a picture of her head and
shoulders.
The image was fed to a computer and shipped to a database in Chicago, where
ShopperTrak RCT Corp., a consumer research firm, keeps count of shoppers
nationwide using 40,000 cameras placed in stores and malls.
ShopperTrak, whose profile has risen this holiday season as appetite grows
for more real-time shopping data, is a leader in "video mining" -- an
emerging field in marketing research enabled by technology that can analyze
video images without relying on human eyes.
ShopperTrak says it doesn't take pictures of faces. The company worries
that shoppers would perceive that as an invasion of privacy. But nearly all
of its videotaping is done without the knowledge of the people being taped.
"I didn't even know there was a camera up there," says Ms. Munro, a
public-transit manager who popped into the mall on her way home from work
to find a gift for her 12-year-old daughter.
Using proprietary software to gauge the size of the images of people, a
ShopperTrak computer determined that Ms. Munro was an adult, not a child,
and thus a bona fide shopper. Weeding out youngsters is critical in
accurately calculating one of the valuable bits of data ShopperTrak sells
-- the percentage of shoppers that buys and the percentage that only
browses. It arrives at this data, including the so-called conversion rate,
by comparing the number of people taped entering the store with the number
of transactions.
Ms. Munro's visit was tallied up twice: once as a visitor to the Gap and
once in a national count of shoppers. Gap Inc., of San Francisco, pays
ShopperTrak for the tally of Gap shoppers. ShopperTrak sells the broader
data -- gleaned from 130 retail clients and 380 malls -- to economists,
bankers and retailers.
ShopperTrak takes into account how much shoppers spend, data that it gets
from credit-card companies and banks, and extrapolates outward to the
entire retail landscape. "We can get sales and traffic figures that are
identical to the government's, two months before they can issue their
report," says Bill Martin, ShopperTrak's founder and president.
Of the millions of shoppers videotaped daily in the U.S., many are aware
that security cameras are watching to detect shoplifting. In some cases,
stores post signs to disclose such monitoring. But there is far less
awareness by consumers that they are being filmed for market research.
ShopperTrak discloses its clients -- a list that includes Gap and its
Banana Republic unit; Limited Brands Inc., of Columbus, Ohio, and its
Victoria's Secret chain; PaylessShoe Source Inc., of Topeka, Kan; American
Eagle Outfitters Inc., of Warrendale, Pa.; and Children's Place Retail
StoresInc., of Secaucus, N.J.
Several other research companies that videotape shoppers say they sign
agreements with clients in which they pledge not to disclose their names.
They say their clients want the taping to be secret -- and worry shoppers
would feel alienated or complain of privacy invasion if they knew.
Katherine Albrecht, founder and director of Caspian, a Cambridge, Mass.,
consumer-advocacy group, says consumers have "no idea such things as video
tracking are going on" and should be informed. When she tells them about
such activities, she says the response she often hears is, "Isn't this
illegal, like stalking? Shouldn't there be a law against it?" There aren't
any state laws forbidding retailers from videotaping shoppers for research
-- although in New Jersey last week, Caesars Atlantic City Hotel Casino was
fined $80,000 for videotaping the breasts and legs of female employees and
customers with cameras intended for security.
Some research companies' cameras, with lenses as small as a quarter, can
provide data on everything from the density of shopping traffic in an aisle
to the reactions of a shopper gazing at the latest plasma TV set. The cash
register is a popular spot for cameras, too. But cameras can be found in
banks, fast-food outlets and hotel lobbies (but not guest rooms).
Video miners say their research cameras are less invasive than security
cameras, because their subjects aren't scrutinized as closely as security
suspects. Images, they say, are destroyed when the research is done.
Robert Bulmash, founder of the Private Citizen Inc., of Naperville, Ill.,
which advocates for privacy rights, says that being in a retailer's store
doesn't give a retailer "the right to treat me like a guinea pig." He says
he wonders about assurances that images are destroyed, since there isn't
any way to verify such claims. The pictures "could be saved somewhere in
that vast digital universe and some day come back to haunt us," he says.
Already, video images can be subpoenaed from retailers for law-enforcement
purposes. Technology capable of matching a photo with an individual's
identity, say from credit-card transactions, "has certainly arrived," says
Rajeev Sharma, a Penn State University computer science professor who has
launched a company that is creating shopper-monitoring systems. It isn't
certain whether retailers are availing themselves of the know-how. Credit
card companies currently aren't sharing individuals' financial information
with retailers, he adds, but retailers have their own customer databases as
the result of loyalty cards, store credit cards and other in-house
programs. Theoretically, they could link a transaction at a cash register
with the face of a shopper appearing on the videotape.
Dr. Sharma's start-up, Advanced Interfaces Inc., of State College, Pa., is
expected this week to launch a Web site, videomining.com, highlighting the
company's patented "computer vision" technologies.
In a pilot project conducted last year in the Philadelphia area, Advanced
Interfaces set up nine cameras in each of two McDonald's Corp. restaurants
to find out which consumer types would find a new salad item most
appealing. The research was done without consumers' knowledge, says Dr.
Sharma, who is Advanced Interfaces' chief executive.
Seven of the cameras were already in place for security purposes and needed
only to be reconfigured using Advanced's sensors. Two additional cameras
were positioned in the ceiling directly over cash registers. By measuring
the shapes of people's faces, the sensors were able to provide a breakdown
of the fast-food customers by race, gender and age group, he says. The
videos also revealed the length of time customers spent waiting in line or
looking at the menu before ordering. Mr. Sharma declined to discuss the
findings.
All of the video was subsequently destroyed, he says. "Only the computers
and no humans saw the pictures of the customers," Mr. Sharma says. Advanced
is conducting similar consumer-behavior analysis this holiday season for
three other retailers that Mr. Sharma declined to identify.
Video mining is being spurred by digital video cameras. Unlike their analog
counterparts, digital video cameras can be programmed so that the images
can be quickly read by computers -- taking only hours to complete tasks
that might have taken weeks for humans to do.
In a recent assignment that Kahn Research Group, of Huntersville, N.C.,
completed for American Express Co., computers took only a couple of days to
sift through 64 hours of tape. Kahn researchers hid four cameras near the
checkout counter at a couple of supermarkets in Southern California to
study whether American Express gift cards should be displayed off in a spot
by themselves, or lumped with competing brands near the cash registers.
Researchers were interested in customers' facial expressions and eye
movements as they spotted the gift cards, and whether they walked to a
display to pick up a card. Kahn cameras, each the size of a golf ball, were
hidden behind the displays. The devices were programmed to detect fast-eye
movement, smiles and frowns, says Greg Kahn, the company's CEO.
The research, which involved filming 2,000 shoppers, was "really not
invasive," Mr. Kahn says. "Nobody knew they were being recorded and our
work didn't interfere with the store environment. Had we tried to interview
people, the process would have taken much longer."
And had people known they were being taped, he says, "I know many of the
shoppers would have stuck their hands in front of the camera lens and
refused to be recorded."
A spokeswoman for American Express described the project as a "pilot
program ... that's not for public consumption" and declined to comment
further.
It isn't clear whether the American public will be as tolerant of secret
market research using videotape as they are of security cameras. There are
29 million cameras videotaping people in airports, government buildings,
offices, schools, stores and elsewhere, according to one widely cited
estimate in the security industry.
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R. A. Hettinga