Facial Recognition Could Help Retailers Elevate The Customer Experience

NEW YORK— Retailers are looking for ways to convert a very useful defensive weapon into a pro-active tool that helps elevate the customer experience. The technology involves computer vision, generally known as facial recognition.

The technology already assists in improving speed-of-entry for crowds at airports, sports stadiums and entertainment venues. Retailers have been making use of facial recognition to single out known shoplifters and regular return fraudsters.

Now retailers are testing facial recognition technology (FRT) to spot loyal customers, VIPs and to assist in identifying customers looking to pick up merchandise ordered online.

The potential of using FRT for customer personalization is noted in a study by McKinsey. “Fewer than 10% of the companies we surveyed currently deploy personalization beyond digital channels in a systematic way. That presents a big zone of opportunity. One area where the implications could be significant is in store visits. Our survey data suggest that ‘offline’ person-to-person experiences will be the next horizon for personalization. Some 44% of CMOs say that frontline employees will rely on insights from advanced analytics to provide a personalized offering; 40% say that personal shoppers will use AI-enabled tools to improve service; and 37% say that facial recognition, location recognition, and biometric sensors will become more widely used,” noted “The Future of Personalization.”

Also recognizing the opportunities retailers have for connecting with customers is Liz Fogerty, chief strategy officer with Edge Marketing.

“We’re quite used to defining sales-funnels with conversion paths which start with digital planning and page views, proceed through add to cart and end with checkout transactions,” Fogerty noted. “The power here is to bring this in-store by using the human face like an in-store ‘shopping cookie’ tracking unique shopping trip ‘sessions.’”

Fogerty suggests that using FRT does not need to be restricted to loyal or special customers.

“There is no requirement to recognize people as explicitly known customers and instead track them as sessions which can be used to build segmentation and sales-cycle analytics,” she said. “Using a collection of entryway, in-store and exit cameras, customers can be detected as soon as they step inside.”

Fogerty said, “Imagine a sequence of retail stages such as (1) glancing into a shop window, (2) walking inside, (3) spending longer than a minute, (4) walking to different aisle or perimeter areas, (5) looking at specific product displays and then (6) proceeding to checkout. Now capture exit rates for each stage and the funnel is rich with information which can be layered up with segmentation about age, gender, sentiment and returning behaviors. The result is rich data and an analytics suite for brick-and-mortar.”

FRT is not without critics, but most of the opposition is to its use by law enforcement agencies. Some municipalities have barred public agencies from making use of the technology.

Read Hayes, research scientist at the University of Florida and director of the Loss Prevention Research Council, said, “There could be a misunderstanding in the way the technology is being used. Just because a person is subject to recognition by the technology does not mean he or she is subject to immediate arrest or detention.”

Private enterprises have not been singled out in legislation restricting FRT use. To preclude such laws, Fogerty suggests retailers enlist consumers.

“Opt-in and transparency with shoppers is critical to a retailer’s success. With these safeguards in place, shopper participation could be aided,” she said. “It is then reasonable to assume that building a known loyalty and preferred shopper data base using facial recognition as an input is possible. Time will tell if the effort and resources it will take to build a retailer’s proprietary shopper library that links the face to the purchase data will be valuable.”

—Dave Schulz