To get a sense of how much time customers spent in his shopping centers, John Smith, a 1960s pioneer of the modern mall, would walk around the parking lot and feel whether car hoods felt hot or cold.
The technology for measuring foot traffic trends in brick-and-mortar stores has improved since then, but not by much. And it has been far eclipsed by online retailers, which can easily use software, such as Google Analytics, to get detailed reports about their visitors’ every click.
Now a formidable pair—John Smith’s grandson Will Smith, and Google Analytics co-creator Scott Crosby—are leading a startup that aims to bring the rigor of metrics for websites to the physical world, starting with retail stores. By picking up on the unique mobile device IDs that smartphones give off when they recognize a store’s Wi-Fi network, the company’s software can gauge typically difficult-to-track statistics, such as the percentage of passersby who enter a store, the average length of time they spend inside, and the frequency of repeat visits.
“We’re trying to make the world machine-readable,” says Crosby, who left Google in 2010 to become chief operating officer of the Palo Alto, California-based company, Euclid . “Most stores are still using clipboards and clickers,” he says.
Euclid’s technology is relatively simple. A business either installs Euclid’s sensors or, if it already is delivering Wi-Fi from one of a few major service providers, downloads software onto its network. It can then detect all consumer devices that are Wi-Fi enabled and within range of the store. As a device pings the Wi-Fi network, even if it doesn’t connect, the software collects the device’s ID. It also measures the Wi-Fi signal strength to decide whether the person carrying the device is inside or outside the door.
Just as in the online world, where traffic trends inform how a website is laid out or which products greet potential shoppers first, such data is meant to influence business decisions.
One of the company’s more than 30 customers is Philz Coffee, a popular San Francisco Bay Area coffee chain. CEO Jacob Jaber has a Euclid sensor installed in each of his 11 store locations, and checks in on the data, laid out in a style similar to a Google Analytics report, about every two weeks. He learned that customers at the University of California, Berkeley, store spend an average of 42 minutes inside. He might have guessed that they spent longer in that store than in other Philz coffeehouses, but he didn’t realize just how long. Knowing this has made him think about changing the store’s layout and furniture to make it more comfortable.
Euclid won’t yet disclose other customers, who pay $200 a month per location for the software, but it says national chains are among them. According to the company, one large furniture retailer was previously able to monitor visitor frequency only by examining credit card purchases. With Euclid’s software, it realized that customers were actually visiting an average of three times before making a purchase. Another customer, Crosby says, was surprised to find that the catalogue it had been mailing out for years seemed to be having no discernible effect on visits to its stores.
The technology has limitations that existing customer-monitoring methods don’t. While “turnstile”-like technologies such as video monitoring or pressure mats or infrared sensors at the door can’t capture the same detailed metrics and trends, they may provide better overall traffic numbers—since, as Crosby estimates, only about 50 percent of people in urban areas have smartphones and have Wi-Fi turned on. And some stores today are gaining more knowledge about shoppers through loyalty or rewards apps on mobile devices, though this rich data is captured about relatively few shoppers, because it requires them to install a store’s app and use it.
Though Euclid encodes the device IDs to make them anonymous and does not collect personal information, consumers may still have privacy concerns about being tracked. Euclid tries to address this by requiring stores to post a sign informing shoppers about the technology—the sign indicates that people can opt out by visiting a certain Web page. If they do, the system will know to ignore them when it detects their device ID.
Eventually, if more businesses adopt Euclid’s software, it could lead to even more detailed demographic data. For example, if businesses agree to share such data, Euclid might be able to tell a shop that many of its patrons also visit high-end department stores, knowledge that could inform its advertising.
Philz Coffee CEO Jaber says the software has confirmed that his most highly trafficked locations are in areas that have a combination of residences and offices. That will be where he looks to open new locations. “Currently, retail is slightly blinded. This helps fill a gap,” he says. “It has put numbers to observation.”
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