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Wednesday, Apr 16, 2014
Business News

Mullins: Consumers are gems in the data mine

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By the time you walk into Best Buy, the store already knows a lot about where you’ve been that day.

Where you just went for lunch and where you’re likely going later. And they’re not the only ones. Companies from Mazda to J.C. Penney to Apple to Verizon are launching new mobile location-tracking projects that target exactly where you live, drive, work, eat and shop — all based on that little locator beacon we all carry now: The smartphone.

Yes, the old-school methods of tracking where you surf online at home on a PC are sooooo 2005. The new frontier in marketing is using your cellphone GPS to track where you go throughout the day and night, drilling down on what neighborhood you live in, tracking when you drive into a store’s parking lot and even tracking which aisle of a store you’re standing in — right now.

Ideally, tech companies will use their superpowers for good. And I can tell you that the best of these systems are really helpful and send you real coupons and deals on things you actually want. As for others, well, you may want to learn how to disable location tracking on your phone.

Example No. 1: Verizon recently started up a Precision Markets Insights division that helps companies track where people go, based on cell tower data. One test used the stadium where the Phoenix Suns basketball team plays, and it tracked where people went for dinner/drinks after a game, correlated to whether those restaurant/bars advertised in the stadium during that game — i.e., “Hey, Applebee’s, you better advertise inside the stadium, because Hooters did, and they saw a 5 percent bump in traffic after last night’s game, and you didn’t.” Verizon uses cellphone tower data and promises that it “hashes” your private information into anonymous, aggregate data.

Example No. 2: PlaceIQ

New York-based PlaceIQ tracks about 100 million phones and serves up ads on phones that are tightly focused to their time and place. For instance, people who travel a lot may see late-night ads for Utah skiing (perhaps while they’re in a lonesome conference hotel room) more than people who never vacation. (Fly cross-country and your phone notices.) People who regularly go out partying after a basketball game will see an ad for a taxi service on their phone at 2 a.m. and not a Geico car insurance ad. (That may come Monday morning when they’re likely more clearheaded.) PlaceIQ also uses movement data for market research. For instance, it knows people going to Best Buy often come directly from sporting goods stores and that of 400,000 people who visited a Mazda dealer, just over half already have a nice sport utility vehicle. Lots of shoppers stop at restaurants before the car lot or Best Buy. Maybe they’re fueling up with jalapeño poppers and burgers before car shopping.

Example Nos. 3, 4, 5, etc.: There’s a lot of pure “deal” apps out there that have tacked on mobile awareness. Shopkick, RedLaser, Yelp, UrbanSpoon, Groupon, etc. So if you have them running on your phone, you can expect a “ping” for places such as a JCPenney if you walk through a mall. One app called Wisely actually collects spending data at individual restaurants and bars to show you what bar near you is the most popular lately and the average bill.

Example No. 6: Mobile alerts can become annoying, said Todd Morris, executive vice president of corporate development and marketing at St. Petersburg-based Catalina Marketing. “I love Starbucks, but I only get hot coffee and maybe an Americano,” he said. “But whenever I drive into a Starbucks parking lot, I’m getting alerts for all kinds of froofy iced drinks I’ll never get. ... It’s not helping my life. It’s marketing to me, and if you spam people, they just push away.” Instead, Morris is helping Catalina deploy much savvier mobile systems. Catalina already sees 1.4 billion shopping trips a month at supermarkets and drugstores and produces those nifty personalized coupons. Now they’re building mobile apps that can tell you’re approaching, for example, a Walgreens and will only ping you with a deal if three or four items went on sale that they know you love, based on your purchase history. And some U.S. and European grocers now use Catalina systems so customers can scan their items while in the aisle and automatically pay. Bleep, bleep, and they’re out the door — but not before the Catalina system helpfully suggests a coupon for that cat food that you’re probably running low on anyway, since they know when you bought it last.

Example No. 7: Apple. How about targeting customers down to the foot? Apple just launched iBeacon , which uses sensors in a store to triangulate where you’re standing. The first test is in Apple stores. Apple may detect that you have a spiffy new iPhone 5 — so you might like some amazing new headphones — and ping your screen with directions: Turn left. Go 10 feet. Turn right. Look up. Expect systems like that to show up all over your life in the next few years. Major League Baseball may use iBeacon to serve up things such as coupons at souvenir shops in stadiums next season. (The Rays had no comment on this.)

One thorny issue with all this is the tyranny of small numbers. Techie companies may be able to target only the people who are sitting at Chili’s in Carrollwood with an advertisement for Mazda, but that can be quite a small pool compared with readers of ESPN.com or a major newspaper (wink, wink.) So-called “conversion rates” with targeted mobile may seem absurdly high, but from a very small base. Most big-name-brand companies still need to spend heavily on “brand awareness” campaigns that pound their name out there over and over and over again. Geico didn’t become Geico merely by “saving you 15 percent or more,” and there’s good reason for State Farm, Liberty Mutual and Allstate to advertise all over, too.

If all this sounds like an invasion of your privacy and you want a villain to blame, then blame things such as Candy Crush or Instagram or Pinterest or Google or any of probably 1,001 other apps you’ve downloaded. I’m not saying all those apps are giving away your exact location, but many of them rely on advertising to survive, and many ask something like this: “Candy Crush would like to use your location: Yes/No.” If you want to opt out of all this tracking, just tap “no.” The only thing is you may not be able to dominate local rivals on Candy Crush anymore. Life is a trade-off.

Meanwhile, here’s other retail, restaurant and trend news from in and around town:

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There’s a sad facet to news that badly struggling Sears will spin off Lands’ End, which Sears bought many years ago for reasons that still escape me. For those that don’t really know Lands’ End, it’s a great catalog retailer that’s more about quality, durability and comfort than fashion. Just about every teacher in the United States carries a Land’s End canvas bag to work. It makes great bedding, coats and boots. And real people answer the company’s phones. But Sears never really did much with Lands’ End. The sad facet is this: Though Land’s End is part of Sears, if you bought something on LandsEnd.com, and needed to return it, just drop by a Sears. Poof, the money goes back on your credit card. Now you’ll have to go back to shipping back and forth. Still, Lands’ End does make a great canvas bag.

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Membership is cool. And lately it’s making a lot of money for restaurants. Lee Roy Selmon’s awhile back launched a membership card where you earn points to redeem on future meals. Now the upscale sister company Carmel Cafe & Wine Bar is launching a rewards card. Spend $1 and earn 1 point. Two hundred points gets you $20 for a Carmel Cafe & Wine Bar purchase. I bet lots more fine-dining restaurants go this route. It’s trackable. It works (Selmon’s saw a big spike in visits), and everybody loves feeling like a special member.

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I’m a fan of Target. Sure, Wal-Mart kills them on prices, but I like Target stores, and I even like their ads and their 5 percent-off member card. But sometimes it’s quite clear that Target and Target.com are still siblings that don’t get along. For instance, if you see something in the store but decide later to buy it online, good luck finding it on Target.com. If the website says a product is in stock at a store, oftentimes it’s not. Today’s oddity example is this: Target just sent out an alert with all kinds of holiday deals on TVs. Yeah! So you click on “their own e-mail” and pick, say, a 55-inch category. Seven out of 11 TVs were marked as both “currently unavailable online” and “not sold in stores.” I understand the retail strategy of keeping in-store inventory svelte while keeping huge inventories online. But the point of the email alert was. Anyone? Anyone?

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We in the newsroom see hundreds upon hundreds of news releases about charitable giving by companies. Often it’s a form of brand polishing because, after all, is a gift really “charity” if there’s a news release alerting the world to it? This time of year, those gift alerts come in by the boatload — too many to write about, which is actually a very good thing. It took a $5 million personal gift by Chris Sullivan of Outback to the H. Lee Moffitt Cancer Center & Research Institute to make the front page. But I’d like to highlight a couple donations from companies I tend to track closely. Bright House Networks has a neat project where people can vote on the Bright House Facebook page for a charity of choice, and BHN will do the rest by steering $100,000 their way. Archrival Verizon tallied its giving through the year at $1.5 million for nonprofit groups in Florida. And St. Pete’s own HSN is donating $500,000 to places such as the Thurgood Marshall Fundamental Middle School, Community Action Stops Abuse, Habitat for Humanity of Pinellas County and Big Brothers Big Sisters of Pinellas County. Happy holidays!

rmullins@tampatrib.com

(813) 259-7919

Twitter: @DailyDeadline

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