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Are Retailers Going Too Far Tracking Our Web Habits?
Monday, October 26, 2009 5:56 AM


(Source: USA TODAY)trackingBy Jayne O'Donnell

Sherry Natoli is followed everywhere she goes while shopping online, but she doesn't mind at all.

Natoli, who owns a seashell business in Tampa, does all but her grocery shopping on the Internet and even opts in whenever she's asked whether she's willing to have her online movements tracked by websites.

Companies have been monitoring our online behavior for almost as long as there's been an Internet, often using our online footsteps (cookies) whenever we search, browse or buy online. Tracking technology has advanced so much that everything from how long we linger over a product description to whether we are searching for sexual-dysfunction drugs can be collected and stored on individual profiles. Our profiles are numeric descriptions, not our real names, but in some cases, it's not hard to determine personal information behind the numbers.

Privacy concerns abound, and several privacy and consumer groups are urging Congress to enact laws on what can and can't be collected and for how long.

But the tracking continues in earnest, in few places more avidly than among retailers. With the approach of a holiday season that even the most hopeful of industry analysts think will see only a 1% sales increase, retailers are increasingly turning to the Web for answers -- and sales. Even retailers beating the odds, such as thriving teen retailer Aeropostale, find their online growth far surpasses that in their brick-and-mortar stores.

Aeropostale has been among the few chains to post monthly sales increases, typically less than 15%, but online-only sales were up 85% last year.

Macy's CEO Terry Lundgren said recently that for every dollar its customers spend online, they spend an additional $5.77 in its Macy's and Bloomingdale's stores. Online sales made up only 6% of all retail commerce last year, but store operators believe that if their websites help capture customers' wants and needs, they will do better on and offline.

By monitoring the browsing and buying behavior of consumers who visit their websites, stores are able to better target online and e-mailed promotions to what consumers are most likely to buy. They occasionally adapt their home pages to the shopper. And as Amazon has been doing for years, they also can use what products other shoppers have purchased to knowledgeably recommend additional purchases.

The e-commerce marketing company Coremetrics says consumers are 50% more likely to open and click through a targeted e-mail than a generic one. And targeted e-mails generate 50% more revenue than generic e-mails, the company has found.

So it's all very successful but still controversial.




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