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In-Store Analytics Tools: What IT Can Learn From Retail

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

Retail stores are sitting on a gold mine of data. Everything consumers do, from taking a look at a product and putting it back, to purchasing an item or walking past a store altogether, can help companies better align business practices to market realities. But in-store analytics tools are fraught with potential controversy. What gets collected? With what kind of consent? How is it used? While this may seem like a brick-and-mortar problem, there is a lesson here for midsize IT: Analytics environments cannot be ignored, no matter how powerful the tool.


Code of Conduct

An Apparel post recommends that retail outlets seek out an organization like the Future of Privacy Forum (FDF) and find a baseline code of conduct to help inform analytics decisions. This code should include transparency about the kind of data being collected, opt-in and opt-out details for consumers, a clear value proposition and a commitment to smart technology decisions — in other words, technology that puts privacy above performance.

How does this translate to midsize IT? Part of it is directly applicable to outside consumers since even B2B agencies want to collect data about their customer base. More importantly, however, the idea of analytics conduct codes applies to employees, from frontline users all the way to C-suite executives. Before pouring resources into any analytics solution, it is important to be up-front with all employees about what kind of data will be collected, how it will be analyzed and when misuse of data will result in consequences. This is especially critical in a business environment informed by bring-your-own-device (BYOD) trends: Many users consider personal mobile devices inviolate and immune to IT oversight, even when they are connected to company networks. A clear, up-front code of conduct prevents confusion on both sides.


Not Your Mother's Analytics

IT admins also face a new challenge thanks to the rapid pace of analytics evolution. In an excerpt from the Harvard Business Review, Thomas Davenport describes a shift toward what he calls "Analytics 3.0" or "a new resolve to apply powerful data-gathering and analysis methods not just to a company's operations, but also to its offerings."

A Marketing Land article offers a practical example: The announcement by Facebook that its mobile app will scan background audio using on-board device microphones. The idea here is to gather data about what programs users watch, what music they listen to and then tailor Facebook content accordingly. Author Benjamin Spiegel noted that his wife was uncomfortable with the idea of Facebook listening in, while his teenage daughter found the idea fascinating. Not surprisingly, the feature has generated mixed reviews market-wide.

For midsize IT professionals, the move beyond in-store analytics tools to fundamental integration carries similar risk. Younger employees may be less concerned with the sharing and analysis of their data, while users who remember the halcyon days of mobile-free meetings are inclined to draw hard lines between what they share with employers and what remains private. Ultimately, the vast amount of data available and the emergence of embedded tools capable of capitalizing on this data in real time means a code of conduct and clear expectations are not something IT professionals can afford to draft "after the fact."

Learn from retail: Be up front, honest and showcase value to maximize analytics ROI.


This article was written by Doug Bonderud.

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