Did Nordstrom Go Too Far in Customer Service?

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Nordstrom is known as one of the best department stores because of their customer service, but have they taken their service too far by implementing a Wi-Fi tracking device in their store? This device, also known as Euclid, tracks the customer’s individual movements through the store by connecting to the Wi-Fi on their cell phone. The program allows stores to track their customer’s movements and see where they go in the store and how long they spend time there.

The information that Euclid provides companies with goes beyond tracking where customers went in the store and uses that data to help make their shopping experience better. By finding out where customers went in the store, how long they were in each area, and if they purchased something or not can show Nordstrom where most customers focus their attention to and map out how they can make the customer’s shopping experience a better one.

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For managers the data provides overall information about the times the store has the most traffic, which allows them to staff the floor accordingly and make sure that there are not too few or too many employees working. It also shows the foot-traffic that the store gets at their windows and shows how many people enter the store and how many keep walking. But for all the data that Nordstrom collects is it actually benefiting them?

When implementing the Euclid into their stores in 2013 Nordstrom posted signs to warn customers about the activities that are going on. Once customers realized what was going on their sense of security when shopping seemed to lower. Many consumers felt that this was an invasion of their privacy by tracking what they were doing without their consent. Although Euclid is anonymous, consumers still had their worries about what was actually being collected and how it was used. Consumers did not think that tracking their movements in the store would be so beneficial to the company that it would be worth making their customers feel uncomfortable. Even for potential customers who were thinking about going into Nordstrom they might have decided to not go in because they knew about the Euclid.

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It is hard to blame the consumer for feeling uneasy about being tracked because they do not truly know what information is being taken of them and where it is going. This device provides a reason for shoppers to not want to go in the store and makes consumers decide if they trust Nordstrom enough to shop there. This requires a decision process that would not have to be made if the Euclid was never put in the store and allows for another attribute to be compared between Nordstrom and other department stores.

After 8 months of having Euclid in their store, Nordstrom decided to take the devices down and use the data they collected to help improve their service. It was only after the story about their store using Euclid went on national news that Nordstrom took them down. Once their story went national Nordstroms received a lot of negative feedback from consumers and decided that the best way to respond was to take them down. Nordstrom stated that the use of Euclid was purely for testing and it was never going to be permanently implemented into their store. The store stuck by their decision in using Euclid and said it was just one of many ways in which they try to find new ways of seeking out customer information.

I find the use of Euclid to have been unethical and an invasion of their consumer’s privacy. Although there were signs put up there was no actual consent process done to allow them to track their customers. Yes their customers were aware of what was going on if they walked into the store, but were they aware that they were being tracked right outside the store? If Nordstrom had communicated the implementation of the device in a different way and either asked for consumers to participate or put their marketing efforts into sending out the message that they were trying to perfect their service than people may have been more receptive to the idea. But because they quietly placed the devices in certain stores and only put up signs to notify the consumers it came across as a secret mission that was to collect important data from people’s phones.  The consumers reacted the way they did because they felt that Nordstrom was keeping something from them about what they were doing, which is the way it seemed by how they put the Euclid into the stores. If Nordstrom wants to improve their customer service they should include their customers in on the process and make sure whatever method they use is considered appropriate to their customers.

 

 

http://www.forbes.com/sites/petercohan/2013/05/09/how-nordstrom-and-home-depot-use-wifi-to-spy-on-shoppers/

 http://www.retailsolutionsonline.com/doc/nordstrom-experiment-highlights-privacy-issue-0001

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