Psst!!! Yes You…They are Watching!



What if you were told that while you shopped, you were being watched not only by store cameras to catch theft, but also for data collection? That somewhere, your actions were being examined and discussed? How would you react to that? Luckily, many of you did not know of this creepy, yet accurate forecasting method until now.

Although tracking customers have been around for many years, security companies have finally broke into the market, advancing the cameras abilities by drawing “heat maps” to assess buying behavior, have better strategic capacity planning,and  being able to guess shoppers’ sex and  age. According to market-research firm IDC, $1.3 billion will be spent on analytics software this year to make sense of the data collected, and potentially increasing forecasting accuracy.

Gordmans, a department chain store that can be found in places like Champaign, Naperville, and Rockford has used cameras as their technology tracking source. In one of their stores, 35 cameras were placed throughout the store and used to track the movement of 29,000 shoppers over a three week span. This footage was then turned into heat maps in order to show which popular departments of the stores consumers gravitated to the most(fashion items) and which departments in the store consumers ignored(home furnishing). It also told them that a large flux of Asian customers frequented their store, which prompted the manager to have Asian salespeople to greet them. The data was also analyzed by using a software from RetailNext where through animation, showed managers how to change the layout of 90 stores to increase sales. These changes helped increase Gordmans’ conversion rate by 3%.

American Apparel has also adopted this ideology by using RetailNext. Stacey Shulman, technology chief of American Apparel, says she craves “the same type of analytics in-store as I can get online.” The software allowed them to tell how many customers came into the store and the time of day. Before using this forecasting method, American Apparel store managers thought they were busiest when sales peaked, when in actuality they were typically off by two hours. By using the existing cameras that are mounted above the doors as you walk in, RetailNext has been able to help American Apparel with capacity. The traffic data collected feeds into the staff scheduling software which allows the store to be able to staff accurately based on how much traffic the camera picks up.

These new innovative software’s touch on many topics we have discussed throughout our course. Both stores have used them as a means to have better forecasting data. It not only gets to track how many purchases, but look at the behaviors and characteristic of those that buy, making it easier to predict their sales. It has also allowed stores to accommodate their capacity needs by using more employees during peaks to create more sales.

As online retailers gain competitive advantage, do you think this is a good idea to boost sales in stores? By gaining more accuracy on their customers, can they win them back?


We Snoop to Conquer

Analytics Software Mines the Store

What Happens When Operation Management Fails? Who Do We Blame?

Imagine you have a 10 page paper due at midnight and you’re almost finished, you are starting to feel relieved and BOOM!  Your computer crashes! What do you do? Who do you blame for it? I am sure many of your first reactions after crying all night is to take it back to where you purchased it from, and ask  them to diagnose the problem. You don’t actually care what the problem is and who’s at fault, you just want it fixed. But what happens when the situation is more complex and deals with a defect that cost someone their life? Do we pay attention now?

Last Monday, General Motors death toll rose to 21 people resulting from a defect in the ignition switch on older model cars. Although General Motors knew of the ignition switch defect almost a decade ago, they did not take action until recently. The ignition slips to off or accessory, cutting off power to the air bags so they will not deploy during a crash and also cutting electronic steering and braking, causing people to veer off the road. We see that when operation management fails, companies have to have recovery strategies in place. General Motors hired compensation expert Kenneth Fienberg who decide that all passengers, pedestrians, and bystanders who were injured in result to the crash could receive a settlement. In addition, General Motors CEO; Marry Barra fired 15 employees who knew of the defect.  Although a great start to reprimanding those who knew of the situation, the company is still being fined $ 35 million by the U.S. Transportation Department for failing to report the need for a recall have an estimated payout of $400 million to compensate victims.  Their recovery strategies could have been prevented if their operations team considered ethics.

This reminded me of our paper puppet exercise. Our assembly line created 20 puppets, where process one failed to mention defects in the original paper. As the defected paper continued through the assembly line it was cut, folded, and colored where the defect was not as noticeable anymore. Once it reached our inspection line, many of them did notice. Yes many of us laughed when we found out our assembly line continued to use them, but I don’t think we would laugh if we knew this case could possibly be the outcome.

Who do we blame for the death of these victims?  I am sure many of us would say General Motors. Why did they withhold so much information from the public? Why didn’t the National Highway Safety Administration take these claims more serious and open an investigation? Operations management failed, their strategic decision steps failed, and their quality management team did not ensure safety like it should have. As average citizens in society we often accept the answer that something is fixed, but do not care for all the details. This plays into why quality control often lacks ethical standards. We too have to do better.

Who do you blame?





G.M Timeline of Problems and Who Knew

Nissan Factory Life: How Cars are Built

Ignition Switch Death Toll Rises to 21

Chevy Cobalt Photo

Saturn Ion Photo

Recall Chart Photo