Will Mondelez’s ‘Smart Shelves’ Change Retail or Just Add to Privacy Woes?

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In little more than a year, some retail shelves may actually be able to identify consumers who are most likely to purchase certain snacks, thanks to Mondelez International. The $35 billion global foods giant, which spun off from Kraft Foods just over a year ago with a name intended to evoke “delicious world,” markets such snack brands as Cadbury, Certs, Oreo, and Trident.

In 2015, the company plans to introduce “smart shelves” with sensors designed to detect the age and sex of consumers. Then, advanced analytics will associate the right type of snack product with each consumer, and a video display will target consumers with appropriate ads and promotions. 

Mondelez wants to place its smart shelves as close as possible to the point of sale—right near the checkout aisles to track and possibly encourage last-minute impulse buys. Mark Dajani, the CIO of Mondelez, told the Wall Street Journal, “When people walk by, it’s a missed opportunity. We must know how the consumer behaves in the store. …Knowing that a consumer is showing interest in the product gives us the opportunity to engage with them in real-time.”[more]

How Mondelez accomplishes this is somewhat of a technological wonder. Sensors on the shelves that analyze facial structure and even gestures made by the consumer will trigger an appropriate video ad. Other sensors will detect the fact that the consumer picks up a product, potentially triggering an associated coupon to pop up on the video screen as an incentive to buy the product.

Advanced analytics that segment by age and gender will help Mondelez identify which consumer groups are purchasing which brands. “Knowing that five hundred people picked up the product helps determine if the smart shelf placement in-store is optimal to drive traffic,” said Dajani, who noted that SAP’s HANA platform could be used for task of parsing the sensors’ data streams.

Consumer privacy advocates may be alarmed, naturally, as the technology sounds like something out of a distant disturbing future—think Tom Cruise being bombarded by personalized in-store ads in the sci-fi movie, Minority Report. As Mashable points out, “There is backlash potential as well. Consumers who are already queasy about seeing ‘interest-based’ online ads from Amazon (and now, Facebook) reminding them of items they browsed may be creeped out by a similar application in real life.”

But according to Mondelez, the data collected by smart shelves is “completely anonymous” and will only be used to understand product preferences and purchasing behaviors of demographic groups, not individuals. A company spokesperson assured that, “People’s images are not saved. We only track gestures to pick up products or what products have actually been picked up.”

This is one of of the numerous ways manufacturers and retailers are reinventing the in-store experience—but this particular concept potentially opens the door to another discussion about consumer privacy. That topic, as Walmart learned when it introduced “smart tags” in 2010 ostensibly to track clothing inventory, and Nordstrom when it began tracking shoppers via their smartphone signals, could be a public relations hot potato. Apparently, Walmart’s smart tags remained active even after customers left the store, causing some privacy advocates to shout “Foul!” 

Will similar concerns be raised about Mondelez International’s use of smart shelves—or will this latest method of tracking consumer behavior be accepted by consumers and embraced by retailers?

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