At my most recent retail job, a local high-end women’s clothing boutique, we used sales-tracking software. When ringing them up, we had to ask for the customer’s first name, last name, and phone or email address on every transaction. This request came from the owner, and I could understand why she asked us to do it: with in-person shopping, there are limited ways to track who the customer is and their shopping history.
Equipped with this information, we could, on the back end, see what each customer had bought and how much they had spent per calendar year. This knowledge was helpful in situations where a customer forgot what size jeans they had bought before, or if they wanted to gift something they had recently purchased for themselves, but couldn’t remember the item’s name. It was, however, a little spooky to look up my own name and see how much I’d spent at the boutique (I thought I was supposed to be saving that income – oops!).
There was always a tiny part of me that felt guilty about asking for customers’ personal information —whenever they declined to give it to me, I understood and never pushed back. Sales tracking software is expected, whether you’re shopping online or in person. While we anticipate it, that doesn’t make it any more palatable. Having been on both sides of the coin, as a store employee and a customer, I wanted to learn more about the extent to which retailers track our behavior as consumers.
What Is Sales Tracking Software?
Sales tracking software, also known as “surveillance technologies” or “customer tracking software,” enables businesses to gain insight into consumer behavior and make informed business decisions.
For centuries, even before the invention of coins and paper money, business owners have sought to gain a deeper understanding of their customers in order to predict their behavior better. Better information can inform decisions about pricing, inventory, marketing, merchandising, and store operations, ultimately keeping the business going. Before the digital age, companies relied heavily on intuition and business acumen. Technological advancements over the last hundred years or so have increased the amount of data retailers collect on their customers.
Here are some examples of sales tracking software methods you’ve likely come into contact with:
| Point-of-Sale Systems | Captures purchase data at checkout to track what customers buy, when, and how often. This method is what I described doing at my retail job. Think: Square, Toast, or Clover. |
| Loyalty Programs | Uses sign-ups, rewards, and unique IDs to follow individual customer behavior over time. Think: Sephora’s Beauty Insider, Amazon Prime, or Target Circle. |
| Mobile Apps | Collects in-app browsing, purchase, and location data to personalize recommendations and offers. Believe it or not, apps collect more user data than a browser, which is why you’ll often see businesses encouraging you to download their app. |
What Data Do Businesses Collect?
In-Store Shopping
Infrared Sensors
While businesses have fewer opportunities to collect data about you in person, it’s still a little creepy to read about what they are capable of collecting, nonetheless. For example, businesses use infrared sensors (which capture body heat) to glean information on store occupancy, foot traffic, and the average duration customers linger in specific store sections. Surveillance cameras equipped with the right technology can also capture this data.
Cameras
In addition, according to The Financial Times, companies like The Home Depot have cameras in their parking lots that can capture your license plate number and car color, as well as identifying features such as scrapes or dents. Using this technology, The Home Depot can distinguish the arrival of a car involved in thefts at other stores or locations.
WiFi
Another method businesses use to gather in-store customer data is via their WiFi. With this tool, stores can observe in-store movement to optimize layout and flow. Note: while they can collect some data even if you’re not connected to their WiFi, they can gather more if you’re connected. As I’m currently sitting at a cafe writing this blog, I’m connected to its local WiFi, so reading about how businesses use WiFi to gather data feels a little meta.
Bluetooth Beacons
Some stores use Bluetooth beacons, small electronic devices that can be hidden at various locations within a store. These beacons communicate with your phone and let the business learn more about your movements while you’re in the store. The New York Times has an excellent overview of this technology, and includes visuals to help explain how it works. According to that article, you can find Bluetooth beacons at “airports, malls, subways, buses, taxis, sporting arenas, gyms, hotels, and museums, and even on billboards.” Phew! To protect yourself from having beacons tracking you, you can turn off location services and Bluetooth when they’re not needed.
Point-of-Sale Systems
Finally, I’ve already discussed my experience with obtaining customer data at check-out by verbally securing consent. In my opinion, this method is the least harmful, since the customer can easily opt out.
Online Shopping
Not surprisingly, there are more opportunities for sales tracking software online.
Cookies
Using cookies, pixels, and session replay tools, businesses can monitor metrics such as your device and location, time on page, and the products you select. First-party cookies are the type you’d see when you visit a new website, and it asks, “Do you accept or reject all cookies?” Businesses use them to remember your preferences and store session information. You can control your use of first-party cookies in your browser settings, and even clear all cookies.
Third-party cookies, on the other hand, track your behavior across multiple sites. They are also called “tracking cookies.” They originate from a domain that is not the one you’re visiting. Advertisers, social media platforms, marketers, and analytics providers are the main users of third-party cookies. As a result of serious privacy concerns, many browsers have vowed to phase out third-party cookies, including Safari, Microsoft Edge, and Firefox. In 2024, Google, on the other hand, reversed a years-long promise to phase them out.
IP Address Tracking
In addition to cookies, websites can glean information about you via Internet Protocol (IP) address tracking. Each device that connects to the Internet has its own IP address. IP addresses are required to identify a device on a network and to enable communication with other devices over the Internet. IP tracking is legal, mainly when used to improve security and detect fraud. Businesses can also use it to obtain information for website analytics; however, thankfully, there are privacy regulations that serve as guardrails.
I just looked up my IP address, and it gave me my approximate location, the browser I’m using, the platform (i.e., Mac or Windows), my screen size, and whether my cookies are enabled.
Customer Tracking for Research
As a User Experience Researcher, I’ve used FullStory to watch how a customer interacts with a page on my employer’s website. FullStory records where the user moves their cursor and what they click on, among other metrics.
It feels a little Big Brother to watch a customer’s entire session, knowing which city they’re in and what they bought; yet, it’s important to remember that these are only people who have accepted cookies. In addition, FullStory blacks out personally identifiable information (PII), such as one’s credit card number or address.
Having access to these sessions has helped me build persuasive reports and advocate for better user experiences. While there are many ways to track customer behavior online, it’s important to remember that the ultimate goal isn’t always to “sell you more things.”
There are other methods businesses use to track online behavior, including social media and mobile app tracking. For brevity, I’m leaving those out. Besides, cookies and IP address tracking are the primary ways in which businesses monitor your online behavior.
Does Sales Tracking Software Impact Our Behavior?
It wouldn’t be The Shopping Mindset if I didn’t spend some time considering the psychological aspect of things. It has been fascinating to read prior research on this topic because it’s clear there isn’t a simple black-or-white answer to how sales tracking software impacts us. As such, I’ll discuss both the benefits and drawbacks of this technology.
Drawbacks: Main Findings
Customers often react negatively when they learn retailers are collecting detailed location or behavioural data. These actions can lower trust and purchase intent unless businesses make the benefits, uses, and limitations clear. In study after study, data show that opacity and a lack of customer benefits negatively impact their experience. Let’s look at a few research examples that focus on both the online and in-store experiences.
Drawbacks: In-Store Shopping
A 2020 investigation into customers’ perceptions of in-store information gathering found that distributive fairness (whether consumers interpret the data gathered as more helpful to them or the business) directly affects privacy perceptions. In other words, customers would be more willing to accept tracking technology if they feel it will benefit them. Further, the investigation found that trust in the brand does not automatically mean that the customer feels secure in how the company manages their privacy.
In another study that also focused on sales tracking software, the researchers found that consumer acceptability depends on transparency and voluntariness. In the study, researchers presented participants with the choice between Shopkick, a voluntary, transparent system that offers direct customer benefits, and Shopperception, a sales tracking software with no rewards or incentives to shoppers. Unsurprisingly, “consumers evaluate ‘Shopkick’ to be considerably more acceptable than ‘Shopperception,” they wrote. Both Shopkick and Shopperception operate within large US retailers. For example, Shopkick operates in Macy’s, and Shopperception operates in Walmart, among others.
Finally, a 2024 investigation found that consumers are far more accepting of in-store surveillance when it is transparent, voluntary, and offers clear personal benefits, and far less accepting when it feels hidden or imposed.
Drawbacks: Online Shopping
I noticed similar findings within the online experience. In a 2013 study, a trio of researchers found that young online shoppers (age 18-35) worried that marketers may use their personal information beyond its original purpose. Sharing more information heightened their sense of risk. That increased risk lowered their perception of fairness, creating a gap between what they expected and what even trusted online retailers actually do with their data. Participants reported feeling a higher risk when marketers did not adequately inform them about the collection and use of their information.
Benefits
An interesting caveat across all these studies is that when businesses explain the existence and benefits of data collection, customers are more amenable to it. Can you recall a recent positive shopping experience? Whether it’s clothing or groceries, you were likely pleasantly surprised by the merchandise and overall experience, and left satisfied. While it might seem like it just happens, in reality, retailers put a lot of research and time into creating that experience.
Let’s start with when you first walk into a store. Do you have space to figure out where you want to go, or are you bombarded with stimuli and tight spaces? Does the store smell nice? Is the music too loud, or just right? Your brain processes all of these stimuli almost immediately, so businesses must know how to make this a good experience.
An online browsing experience faces similar challenges. Is the homepage welcoming, or overwhelming? Can you find what you need quickly? Do the menu options make sense? (These are all things that I investigate in my role as a UX Researcher, by the way.)
For companies to know how to improve their in-store or online experience, they must collect data about you. Whether the data collection method is cookies or an interview with a friendly UX researcher (hello!), it is all equally important in the quest for that seamless, easy shopping experience. As one of the previously mentioned articles writes, “The concept of ‘mutual benefit’ is the foundation for customer relationship management… thus it is tremendously important for the marketer, when seeking a long-term relationship, to articulate any potential benefits to their consumers.”
The concept of ‘mutual benefit’ is the foundation for customer relationship management.
Brooksbank et al., 2022
Sales Tracking Software Usage Should Be Transparent
Whether it’s IP address tracking or Bluetooth beacons, the reality is that it feels like somebody is keeping track of everything we do. We’re navigating a retail world where data collection exists at nearly every touchpoint, from when we walk into a store to when we open a shopping app. While much of this tracking genuinely helps businesses create smoother, more intuitive experiences, it also raises fundamental questions about transparency, fairness, and how comfortable we are with being observed.
The research is clear: people are far more accepting when they understand data businesses collect and how it benefits them, and far less so when sales tracking software feels hidden or one-sided. Ultimately, staying mindful of these dynamics, whether by adjusting our privacy settings (the FTC has an excellent article for just that) or recognizing the trade-offs, gives us back a bit of agency. Retailers may rely on data to keep their doors open, but we still get to decide how much of ourselves we share along the way.
Leave a Reply