TODAY   |  July 17, 2013

Retailers are using your phone to track shopping habits

Shoppers’ movements can now be tracked through smartphone data, thanks to retail-monitoring tech companies. NBC’s Stephanie Gosk reports and analyst Hitha Prabhakar discusses the practice.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> back now at 7:39. do you ever get the feeling that you're being watched? well, if you're shopping you might be right and your cell phone could be the reason. stephanie gosk is with us to explain. good morning.

>> reporter: good morning matt. stores always wanted to know as much about their customers behavior as possible and now advances in technology are making it easier for retailers to watch more closely. some say uncomfortably close.

>> john anderson , you could use this right now.

>> it might be coming to a mall near you. using high-tech monitoring stores check how long customers linger and what catches their eye using software enhanced video and through their smartphone. euclid analytics sells a system that collects and analyzes smartphone data for businesses like phil's coffee.

>> it can tell us how many customers are passing by our stores compared to how many customers are coming in.

>> when cell phones search for a wifi signal they send out a unique signal to networks. they record the information. no names, phone numbers or internet history is shared and customers can opt out by turning off their wifi . euclid analytics says 30 national retailers use their technology but they won't say who the companies are. for some it raises privacy concerns.

>> i don't know how to react to this. it's a shock. i'm going to turn my phone off.

>> i'm bothered that someone is tracking my whereabouts.

>> retail next relies on multiple types of technology including wifi and video cameras with facial recognition software.

>> the industry is paying a lot of attention to what it needs to do to ensure that data can be collected without stepping on the privacy of individuals.

>> reporter: todd bishop of geek wire says this is a way for brick and mortar retailers to compete with the world of e-commerce.

>> a lot of these traditional stores are trying to learn the lessons and apply the techniques of the lon line world to the physical world .

>> reporter: whether or not people are concerned about their privacy, this is a reminder, technology makes information more accessible to us but makes our information more accessible to others.

>> always good to keep in mind. stephanie gosk, thank you so much. she is a retail analyst. good morning.

>> nice to see you.

>> i'm not surprised by this. with all that's at stake when you step into a store for the person that owns that store and how they need to make the most money possible out of your time there, this is just logic, isn't it?

>> absolutely. just to put it into perspective four out of five smartphone owners here in the u.s. use their smartphones to shop. here's the take away number. by 2015 , m-commerce, mobile commerce is set to make $31 billion in revenue. that's where this is going. and retailers want to get a piece of that. if the customers are shopping via their mobile phones they want to make sure they're getting a part of that.

>> we already know that online companies are doing this all the time trying to figure out your buying habits so i step into a store, i have my cell phone with me, how quickly can that store turn around the information they gather on me?

>> they are gathering that data at a very -- not so fast pace. they have to aggregate that. it goes into a data base and they analyze it. you saw the map stephanie put in her segment. they're getting that data and putting it together and analyzing it. the analysis comes much later.

>> the upside, once they figure this out and find out what you're looking for and where they spend the most time in your store they can fire off targeted coupons to you.

>> absolutely.

>> let's say you love green cardigans. therefore maybe you go back in the store in the sweater aisle they'll send you promotions or a coupon for 30% off. there's an upside for the customer.

>> they cannot harvest your personal information and if you want to opt out of this, all you have to do --

>> turn off your wifi and location setting. that's all you have to do.

>> thank you very much.