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A couple of interesting stories about how retailers utilize high-tech analytics to better understand customer shopping behavior.  I heard “The secret life of discounts” (Marketplace radio, December 16, 2011, link to listen or read the transcript) as I drove to the airport last night to pick up my daughter who was coming home from college.  There are some examples about how stores use analytics to try to remain profitable with consumers conditioned to buy only at a steep discount.

In “Big Brother is Watching You Shop” (Bloomberg Businessweek, December 15, 2011), you can read about retailers using in-store video cameras and tracking your cell phone to better understand how you move through a retail store.  Analyzing video from a Miami store allowed Montblanc managers to more strategically locate merchandising, signage, and salespeople.  The result — a 20% bump in sales.  Other retailers follow customers’ cell phone signals to track and map movement through stores.  This of course is raising privacy concerns.

These two stories can be useful examples for marketing research (where we cover dashboards and marketing models), retailing, and in discussions of privacy.  Also posted at Learn the 4 Ps.

Is the future of online advertising one of incredibly targeted advertising based on your interests, online activities and Facebook “likes,” or is it one dictated by robust privacy controls that keep those details out of the hands of marketers?

This article at CNN.com “‘Like’ it or not, online ads are getting personal” (January 31, 2011) starts by asking this question.  It seems to me that many of our students care very little about their personal privacy.  The article describes behavioral advertising and notes that the Federal Trade Commission is considering a “Do Not Track” list similar to the “Do Not Call” list created to curb telemarketing.  It looks like the browser makers are getting out in front of the issue by creating the “no track” option — Microsoft Explorer, Google Chrome and Mozilla Firefox offer the opportunity to “opt out” of behavioral tracking, few users are likely to select this option (that assumes the default is that you will be tracked — but that is another issue). Also posted at Learn the 4 Ps.

This issue raises important questions about ethics and legal issues in marketing, privacy, technology, and promotion.

Here at Teach the 4 Ps we often highlight stories on the selling power of online reviews and personal recommendations.  Last year’s Nielsen survey on trust showed that we really trust recommendations from people we know.  But how can they leverage that at Facebook.  If Facebook masters it, they will have the keys to a new direction for Promotion.  This recent Wall Street Journal article “Facebook Touts Selling Power of Friendship” (Wall Street Journal, July 7, 2010 – subscription required click here for a back door link, follow the search results).  The video is 6:52 long, but the most interesting stuff for class would be the first 3:30 or so.  It could be assigned to students or shown in class.  You could show it in class and natural discussion opportunities will follow — there are the effectiveness issues and the privacy issues as well.

We have just finished up the next edition of Basic Marketing which includes our take on this transformation and how it fits into teaching the introductory marketing class.  Look for the book in October.

Almost all of our students has a Faecbook profile.  I have always been amazed at how permissive this generation has been with its privacy.  In fact, as we work on revising Basic Marketing, I had planned to develop a new in-chapter box about Facebook and privacy.  The problem is that this topic has been such a fast-moving target.  By the time the book has been published — and out a year or two – things are likely to have changed a great deal.  So I have decided not to do that.  The graphics in this post by Matt McKeon  “The Evolution of Privacy on Facebook.”  Click on the graphic to see how privacy has evolved on Facebook in the last five years.

[UPDATE, May 9, 2010]  Maybe I spoke too soon — or I am biased by my 16 and 18-year old kids.  Shortly after I wrote this post, I read a New York Times article, “Tell-All Generation Learns to Keep Things Offline,” (May 8, 2010) that gives me hope that our students are becoming more cautious with their online privacy.

Wow!  I am continually amazed at how our privacy is compromised on the web.  Interestingly, I am not sure our students care all that much — they post on Facebook about their love, life, and escapades where it is broadcast to their 684 “friends.”  Anyway, be wary when you use web coupons because “Web Coupons Know Lots About You, and They Tell,” (The New York Times,April 16, 2010).  In our books we discuss privacy in the last chapter — so it might fit as an example in these last weeks in class.  It might also be a useful ethics topic in pricing.

We are amazed at how little concern our students (and my kids) have about their privacy.  Are our students aware of what they sacrifice and the potential future problems they may encounter with this carefree attitude?  You might find it helpful to assign or discuss “Rogue Marketers Can Mine Your Info on Facebook,” in Wired, January 5, 2010.