Brick-and-mortar retail has survived the “retail apocalypse” predictions of the past, largely thanks to emerging technologies. The retail experience is much different than just ten years ago, with tech like contactless payments and QR codes now commonplace. Another growing technology changing retail is the use of digital signs, including signs that act as interactive navigation tools and those powered with more controversial facial recognition capabilities.
More retailers are using location intelligence in digital signs, such as indoor positioning systems. Enhanced navigation is the primary benefit, enabling customers to navigate large spaces with real-time guidance. If you’re unsure where the kosher section is in your local Whole Foods, there’s a good chance you can find it through an interactive map on your smartphone or on a store-displayed digital sign. Home Depot, a retailer that uses location intelligence for in-store navigation, collaborates with Google to give customers Google Maps of its store layouts.
In New York City, Hudson Yards utilizes digital signs for navigation. Hudson Yards is one of America’s largest new mixed retail, residential, and commercial developments. The developer, Related Companies, worked with design leader Kaushik Panchal to create multiple wayfinding kiosks across the Hudson Yards campus. These kiosks help consumers find what they’re looking for and transfer the information to their mobile devices. The information changes in real-time and uses regularly updated digital advertising geared toward tourists, nearby workers, and Hudson Yards residents.
Some retailers use digital signs to provide personalized advertising. Digital billboards with cameras are used in Westfield shopping centers in Auckland and Christchurch, New Zealand. The AI-powered facial detection tech analyzes consumers’ biometric data to target advertising to them. Named “SmartScreens,” these digital signs determine your age, gender, and even your mood while you shop. The tech, known as emotion detection, is powered by AI that leverages advanced image processing to analyze various facial expressions using auxiliary information. While some emotion detection technologies also use voice recognition to analyze the tone of human speech, the SmartScreens in New Zealand malls focus solely on facial features. Quividi, a French company, provides the software at the malls.
This technology enables advertisers to change ads based on who is looking at them. An advertisement for a smartphone might come in different variations based on age and gender. The targeted ads are reported to significantly benefit businesses. A study by Quividi revealed that targeted ads were viewed 29% longer than non-targeted ads, potentially leading to a 24% increase in sales.
Quividi’s software addresses privacy concerns by using “facial detection” instead of facial recognition. Facial detection only determines if an anonymous person is looking at the sign, how long they’re engaged, and basic estimations of their demographic characteristics, without identifying them personally.
Facial recognition in retail offers benefits beyond targeted advertising, providing valuable data on customer demographics, behavior, and preferences. Retailers analyze this data for insights into traffic patterns, dwell times, and engagement levels, informing decisions on store layouts, product placements, and marketing strategies.
Few estimates exist on the percentage of retailers who use facial recognition, but its application has been revealed in media reports. For instance, the New York grocery store Fairway and Walmart have experimented with facial recognition for security reasons.
Retail isn’t the only industry utilizing facial recognition; Amazon sells the technology to law enforcement agencies, and banks like Chase and HSBC use Apple’s FaceID for secure mobile app logins. Beauty brands, such as Covergirl, integrate facial recognition into shopping experiences, demonstrating the technology’s widespread adoption.
However, privacy concerns make facial recognition a contentious issue. The technology’s benefits are accompanied by potential risks, including harm to brand reputation and regulatory challenges. In the European Union, retailers face stringent data protection rules, while in the U.S., a patchwork of state and local laws governs its use. Illinois’ Biometric Information Privacy Act, for example, requires businesses to obtain informed consent before collecting biometric data.
Emotion detection has also faced controversy. In 2022, Microsoft removed emotion-related features from its facial recognition tech following intense scrutiny. The accuracy of emotion recognition and its potential for discrimination have been points of debate.
Despite these challenges, facial recognition offers promising benefits for retailers, though caution is advised due to privacy concerns. Digital sign technology providing indoor wayfinding is less controversial and, if used correctly, can significantly benefit retail stores. As e-commerce has shown the value of collecting consumer behavior data, emerging tech in physical retail is closing this gap. Technologies like digital signage are crucial for the continued resurgence of physical stores, indicating that signs capable of interactive engagement may soon become as common as self-checkout lines.