Monday, October 13, 2008

Digital Nosiness On The Rise

We have discussed often in this column the increased capacity on the part of retailers for gathering data about our individual behavior. Not only can our preferences for a certain brand of automobile and the fuel we put in it be tracked and saved, but many more personal aspects of our lives can be gathered and examined. Often we may think that this type of digital “sleuthiness” is the province of the CIA or KGB when in essence it may be just as prevalent at Ikea or IGA.

The increased use of credit cards, and more recently the various affinity cards from companies like Kroger, make the gathering of this data increasingly common. Up until recently the capacity to gather this data has outpaced the ability to analyze it and develop useful information for retailers and marketers. The explosion in computing power, the reduced cost of data storage and retrieval and the myriad of ways to collect data has ushered in a new industry of data mining. The miners don’t don hard hats and lights, rather they use advanced mathematic formulas and algorithms.

Stephen Baker in his recent book “The Numerati,” examines what a recent book reviewer calls “digital nosiness.” Baker predicts an almost exponential growth in this industry and for some, myself included, some truly scary implications.

We have all known for years that a donation or contribution to some worthy cause often prompts a deluge of other requests for financial help on the part of all stripes of non-profits. While some major non-profits do not share or sell data or lists, other do. This sort of profiling is tame compared to what is now possible and what will be possible in the very near future

For example, instead of those pesky vinyl bags dangling from your mailbox delivering the weekly specials and coupons from biggs or Kroger, you may soon have customized coupons displayed on an LCD screen mounted on the shopping cart. As you enter the store you may swipe your credit or affinity card and the system will recognize you. The system will instantaneously call up information from your purchasing history at that store and perhaps other stores. Using that data it can “suggest” items that you may be interested in purchasing.

A store can also use this information in a variety of ways. Juxtaposing your shopping data with its inventory control system the store can offer you a “great deal” on some specific items it has that it has to move. Let’s say the store knows that it has an overabundance of fresh tuna steaks that will need to be thrown away at the end of the day. It can discount that item deeply right on your cart screen and suggest a recipe for tuna steaks.

There are some more intrusive possibilities. You may be familiar with the technology that allows your car to speed through toll booths. This technology used in many major cities uses RFI cards - small cards that can transmit information to a nearby sensor. When you want to get to work during rush hour, not having to stop at the toll booth is great. That same technology can be used for other more intrusive purposes. What if your credit card or affinity card came with an RFI chip embedded? A scanner at the entrance of a store, theatre, any location could sense your entrance. “Big Brother” is watching and, now with networked computers, “Big Brother” can remember where you were and what you bought the last time you were on vacation. Don’t believe that what happens in Vegas will always stay in Vegas.

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