http://www.washingtonpost.com/business/bionic-mannequins-spy-on-shoppers-to-aid-sales-retail/2012/11/21/8f3c3ab4-340a-11e2-92f0-496af208bf23_story.html

Bionic mannequins spy on shoppers to aid sales

By Andrew Roberts

Nov. 20, 2012

(Bloomberg) -- Store mannequins are meant to catch your eye. Soon you may catch theirs.

Fashion brands are deploying mannequins equipped with technology used to identify criminals at airports to watch over shoppers in their stores. Retailers are introducing the EyeSee, sold by Italian mannequin maker Almax SpA, to glean data on customers much as online merchants are able to do.

Five companies are using a total of "a few dozen" of the mannequins with orders for at least that many more, Almax Chief Executive Officer Max Catanese said. The 4,000-euro ($5,130) device has spurred shops to adjust window displays, store layouts and promotions to keep consumers walking in the door and spending.

"It's spooky," said Luca Solca, head of luxury goods research at Exane BNP Paribas in London. "You wouldn't expect a mannequin to be observing you."

The EyeSee looks ordinary enough on the outside, with its slender polystyrene frame, blank face and improbable pose. Inside, it's no dummy. A camera embedded in one eye feeds data into facial-recognition software like that used by police. It logs the age, gender, and race of passers-by.

Eye-Level

Demand for the device shows how retailers are turning to technology to help personalize their offers as growth slows in the $245 billion luxury goods industry. Bain & Co. predicts the luxury market will expand 5 percent in 2012, less than half last year's rate.

"Any software that can help profile people while keeping their identities anonymous is fantastic," said Uché Okonkwo, executive director of consultant Luxe Corp. It "could really enhance the shopping experience, the product assortment, and help brands better understand their customers."

While some stores deploy similar technology to watch shoppers from overhead security cameras, the EyeSee provides better data because it stands at eye level and invites customer attention, Almax contends.

The mannequin, which went on sale last December and is now being used in three European countries and the U.S., has led one outlet to adjust its window displays after revealing that men who shopped in the first two days of a sale spent more than women, according to Almax.

A clothier introduced a children's line after the dummy showed that kids made up more than half its mid-afternoon traffic, the company says. Another store found that a third of visitors using one of its doors after 4 p.m. were Asian, prompting it to place Chinese-speaking staff by that entrance.

'Changing Landscape'

Catanese declined to name clients, citing confidentiality agreements at the 40-year-old mannequin maker.

Benetton Group SpA said it's not using EyeSee or comparable technology. They buy some mannequins without technology from Almax, a spokesman said.

Burberry Group Plc and Nordstrom Inc. are among retailers that say they aren't on the list. Even so, they are helping blur the line between the physical shopping experience and Web retailing by setting up WiFi, iPads and video screens at their outlets to better engage shoppers.

Nordstrom, a U.S. chain of more than 100 department stores, says facial-recognition software may go a step too far.

"It's a changing landscape but we're always going to be sensitive about respecting the customer's boundaries," said spokesman Colin Johnson.

No Choice

Others say profiling customers raises legal and ethical issues. U.S. and European Union regulations permit the use of cameras for security purposes, though retailers need to put up signs in their stores warning customers they may be filmed. Watching people solely for commercial gain may break the rules and could be viewed as gathering personal data without consent, says Christopher Mesnooh, a partner at law firm Field Fisher Waterhouse in Paris.

"If you go on Facebook, before you start the registration process, you can see exactly what information they are going to collect and what they're going to do with it," said Mesnooh. "If you're walking into a store, where's the choice?"

So far Almax hasn't faced obstacles to selling the dummy, CEO Catanese said. Since the EyeSee doesn't store any images, retailers can use it as long as they have a closed-circuit television license, he said.

Some clients have asked for the Eyesee to be rigged to recognize employees so they don't muddy the picture of customer behavior. In those cases, workers have to agree to be filmed, says Catanese. That option may be extended to shoppers, where loyal spenders would be invited to opt-in in return for rewards, he said.

Not Deaf

"The retail community is starting to get wise to the opportunity around personalization," said Lorna Hall, retail editor at fashion forecaster WGSN. "The golden ticket is getting to the point where they've got my details, they know what I bought last time I came in."

To give the EyeSee ears as well as eyes, Almax is testing technology that recognizes words to allow retailers to eavesdrop on what shoppers say about the mannequin's attire. Catanese says the company also plans to add screens next to the dummies to prompt customers about products relevant to their profile, much like cookies and pop-up ads on a website.

Too much sophistication could backfire, says Hall, because it's a fine line between technology that helps and technology that irks.

A promotional prompt or a reminder about where to find women's shoes "could become a digital version of a very pushy sales assistant," she said. "And we all know how we feel about those."