The Liebowitz Entrepreneur Program

Liebowitz Entrepreneur Program
Homework # 3
February 19, 2014

Part I

Read Chapter four in your textbook and tell me why the name of your business is a good one and why? Is the web address available as well?

Part II

Read the story below from the Wall St. Journal and in two pages of less write how you feel about this new technology from both a consumer standpoint and as an entrepreneur using this technology for your business

Tracking Technology Sheds Light on Shopper Habits  

At San Francisco’s Sunhee Moon shop, a heat map places red and orange hues where shoppers gravitated. Prism Skylabs (2)

This holiday season, Santa will have extra helpers at the mall: devices that track shoppers.

In dozens of U.S. shopping centers, small gadgets—perhaps tucked near the queue for a photo with Santa—will keep tabs on shoppers’ cellphones. Elsewhere, trackers sprinkled around the centers identify shoppers’ movements, helping mall operators and retailers tally how long people wait in line and where they shop.

Such technology has been creeping into commerce for years. Now, it is becoming commonplace. The Future of Privacy Forum, a Washington, D.C., think tank, estimates that about 1,000 retailers, from tiny boutiques to Macy’s Inc., have outfitted their aisles with sensors to monitor shoppers’ paths. The stores hope that insights from the data will give them an edge over competitors, including online merchants.

To help manage the holiday mayhem, jeweler Alex & Ani LLC has assigned a data manager to use software from Prism Skylabs Inc. to track people’s movements in real time. Prism Skylabs combines video from security cameras with software to build flow charts of people’s movements and uses heat maps to show which products get picked up more frequently than others.

On Black Friday, Alex & Ani used the location data to make decisions in real-time—swapping candles, charm bangles and perfumes from low-traffic areas to high-traffic ones, cutting down on bottlenecks by moving popular items to less busy parts of the store and signing up people to shop online when wait times got too long.

“You’re looking for that insight that makes you just a little smarter than your competitors,” says Ryan Bonifacino, Alex & Ani’s vice president for digital strategy. The holiday season is an ideal time to test the technologies because of the volume of shoppers, he says. “Following the madness, we hope to have a handful of theories we can dive into.”

Sunhee Moon, owner of a San Francisco boutique with the same name, says she recently moved holiday scarves to a table near the back of the store after tracking data showed—to her surprise—that customers linger longest at displays located far from the entrance.

Forest City Enterprises Inc., FCEA -1.21% which operates about 20 malls, asked some restaurant tenants to open earlier on Black Friday, after last year’s tracking data suggested that shoppers who had arrived as early as midnight started leaving the malls around 6 a.m., possibly to search for food. This year, several restaurants in Forest City malls planned to open before 6 a.m., says Stephanie Shriver-Engdahl, the company’s vice president of digital strategy.

“The data helps us to make decisions, nuanced changes that are really important to how people feel when they shop,” Ms. Shriver-Engdahl says.

Managers at Forest City malls receive reports with shopper's foot traffic as colors on a heat map, showing areas people avoid or where they congregate. In some malls, Forest City will test a virtual Santa queue, in which shoppers register their phones and are pinged when their turns come for a picture. The plan emerged from data showing that some shoppers last year waited as long as 2½ hours in line for Santa pictures.

To some people, the spread of tracking technology raises concerns about shopper's privacy. Some Nordstrom Inc. JWN +3.11% customers complained on social-media sites and directly to the retailer last spring after it used Wi-Fi signals from smartphones to track customer movement in 17 stores. The retailer had posted signs to notify shoppers about the test, which ended in May. Nordstrom said it was seeking trends about general shopping behaviour and didn’t collect information about individuals.

The response “was unfortunate,” says a spokesman for Euclid Analytics, which provided the technology. “Better data means a better shopping experience, but you don’t have sacrifice privacy to get there.”

A Nordstrom spokesman says the retailer had always intended the program to be a test.

The Future of Privacy Forum asks retailers that use tracking technology to notify shoppers through signs or other means. Eight companies that make tracking gear, including Euclid, in October agreed to ask clients to post disclosures, but the idea went nowhere with retailers.

Forest City posts signs in its malls. Ms. Shriver-Engdahl says the company doesn’t collect personal data from shoppers’ phones and urges more transparency on the part of retailers and tracking companies. “Rational human beings would understand that there is nothing to be fearful about,” she says.

Privacy concerns have prompted some retailers to hold off on tracking technology. “People just don’t want to feel like they’re being followed around the store,” says Robert Cohen, retail vice president for clothier Patagonia Inc., which doesn’t use tracking technology.

Others are moving ahead. Macy’s and startup Shopkick Inc. are using sensor technology built into Apple Inc. AAPL +0.75% ‘s latest iPhones to ping shoppers who download Shopkick’s app with targeted discounts and promotions as they navigate the retailer’s flagship New York and San Francisco stores. In the shoe department, for example, shoppers might get a rebate on loafers. A Macy’s spokeswoman says the retailer could expand the program after the initial test.

Apple on Friday said it was rolling out its iBeacon technology in more than 250 U.S. stores to send information through Bluetooth signals to customers’ smartphones, including merchandise locations, customer-service updates and offers to upgrade software. Provided that customers opt in, the technology will allow customers to receive notifications from Apple based on their location within a store.

Companies such as Wal-Mart Stores Inc. WMT +0.19% and Home Depot Inc. HD +0.39% deploy sensors around stores to deliver coupons to shoppers using the stores’ apps, or to help shoppers find items on their app wish lists. The retailers say the technology is used primarily to help shoppers find products in stores.

Swirl Networks Inc., a Boston startup, this year installed Bluetooth transmitters in Timberland LLC and Kenneth Cole Productions Inc. stores, among others, to tailor offers to customers.

“A retailer might see it’s the third time you’ve come in a store and never bought something, so they’d send you a better incentive,” says Swirl Chief Executive Hilmi Ozguc. “It’s really about reaching a customer right at that critical moment they are making a decision.”

Timberland tested Swirl’s technology this summer, and plans to install it in its 11 full-price stores later this year, says Ryan Shadrin, vice president for retail. He says more than 35% of customers who opted in to Swirl’s system used coupons sent to their phones, far better than the 15% response rate for successful email campaigns. Over time, Mr. Shadrin expects such technology will help Timberland determine store layout, hours and even facilitate mobile payments.

Kenneth Cole didn’t respond to requests for comment.

Swirl’s Mr. Ozguc and Shopkick CEO Cyriac Roeding say their programs don’t overstep privacy bounds because users must agree to participate and because their companies are analyzing group behavior, not the actions of individual shoppers.