PLANYC 2030

 

Wal-Mart Stores Inc. plans to roll out sophisticated electronic ID tags to track individual pairs of jeans and underwear, the first step in a system that advocates say better controls inventory but some critics say raises privacy concerns.

Starting next month, the retailer will place removable “smart tags” on individual garments that can be read by a hand-held scanner. Wal-Mart workers will be able to quickly learn, for instance, which size of Wrangler jeans is missing, with the aim of ensuring shelves are optimally stocked and inventory tightly watched. If successful, the radio-frequency ID tags will be rolled out on other products at Wal-Mart’s more than 3,750 U.S. stores.

“This ability to wave the wand and have a sense of all the products that are on the floor or in the back room in seconds is something that we feel can really transform our business,” said Raul Vazquez, the executive in charge of Wal-Mart stores in the western U.S.

Before now, retailers including Wal-Mart have primarily used RFID tags, which store unique numerical identification codes that can be scanned from a distance, to track pallets of merchandise traveling through their supply chains.

Wal-Mart’s broad adoption would be the largest in the world, and proponents predict it would lead other retailers to start using the electronic product codes, which remain costly. Wal-Mart has climbed to the top of the retailing world by continuously squeezing costs out of its operations and then passing on the savings to shoppers at the checkout counter. Its methods are widely adopted by its suppliers and in turn become standard practice at other retail chains.

But the company’s latest attempt to use its influence—executives call it the start of a “next-generation Wal-Mart”—has privacy advocates raising questions.

While the tags can be removed from clothing and packages, they can’t be turned off, and they are trackable. Some privacy advocates hypothesize that unscrupulous marketers or criminals will be able to drive by consumers’ homes and scan their garbage to discover what they have recently bought.

They also worry that retailers will be able to scan customers who carry new types of personal ID cards as they walk through a store, without their knowledge. Several states, including Washington and New York, have begun issuing enhanced driver’s licenses that contain radio- frequency tags with unique ID numbers, to make border crossings easier for frequent travelers. Some privacy advocates contend that retailers could theoretically scan people with such licenses as they make purchases, combine the info with their credit card data, and then know the person’s identity the next time they stepped into the store.

“There are two things you really don’t want to tag, clothing and identity documents, and ironically that’s where we are seeing adoption,” said Katherine Albrecht, founder of a group called Consumers Against Supermarket Privacy Invasion and Numbering and author of a book called “Spychips” that argues against RFID technology. “The inventory guys may be in the dark about this, but there are a lot of corporate marketers who are interested in tracking people as they walk sales floors.”

Smart-tag experts dismiss Big Brother concerns as breathless conjecture, but activists have pressured companies. Ms. Albrecht and others launched a boycott of Benetton Group SpA last decade after an RFID maker announced it was planning to supply the company with 15 million RFID chips.

Benetton later clarified that it was just evaluating the technology and never embedded a single sensor in clothing.

Wal-Mart is demanding that suppliers add the tags to removable labels or packaging instead of embedding them in clothes, to minimize fears that they could be used to track people’s movements. It also is posting signs informing customers about the tags.

“Concerns about privacy are valid, but in this instance, the benefits far outweigh any concerns,” says Sanjay Sarma, a professor at the Massachusetts Institute of Technology. “The tags don’t have any personal information. They are essentially barcodes with serial numbers attached. And you can easily remove them.”

In Europe some retailers put the smart labels on hang tags, which are then removed at checkout. That still provides the inventory-control benefit of RFID, but it takes away other important potential uses that retailers and suppliers like, such as being able to track the item all the way back to the point of manufacture in case of a recall, or making sure it isn’t counterfeit.

Wal-Mart won’t say how much it expects to benefit from the endeavor. But a similar pilot program at American Apparel Inc. in 2007 found that stores with the technology saw sales rise 14.3% compared to stores without the technology, according to Avery Dennison Corp., a maker of RFID equipment.

And while the tags wouldn’t replace bulkier shoplifting sensors, Wal-Mart expects they’ll cut down on employee theft because it will be easier to see if something’s gone missing from the back room.

Several other U.S. retailers, including J.C. Penney and Bloomingdale’s, have begun experimenting with smart ID tags on clothing to better ensure shelves remain stocked with sizes and colors customers want, and numerous European retailers, notably Germany’s Metro AG, have already embraced the technology.

Robert Carpenter, chief executive of GS1 U.S., a nonprofit group that helped develop universal product-code standards four decades ago and is now doing the same for electronic product codes, said the sensors have dropped to as little as seven to 10 cents from 50 cents just a few years ago. He predicts that Wal-Mart’s “tipping point” will drive prices lower.

“There are definitely costs. Some labels had to be modified,” said Mark Gatehouse, director of replenishment for Wrangler jeans maker VF Corp., adding that while Wal-Mart is subsidizing the costs of the actual sensors, suppliers have had to invest in new equipment. “But we view this as an investment in where things are going. Everyone is watching closely because no one wants to be at a competitive disadvantage, and this could really lift sales.”

Wal-Mart won’t disclose what it’s spending on the effort, but it confirms that it is subsidizing some of the costs for suppliers.

Proponents, meanwhile, have high hopes for expanded use in the future. Beyond more-efficient recalls and loss prevention, RFID tags could get rid of checkout lines.

“We are going to see contactless checkouts with mobile phones or kiosks, and we will see new ways to interact, such as being able to find out whether other sizes and colors are available while trying something on in a dressing room,” said Bill Hardgrave, head of the RFID Research Center at the University of Arkansas, which is funded in part by Wal-Mart. “That is where the magic is going to happen. But that’s all years away.”

You might think that the only ones following your online musings are your mom and college pals. But if they include a gripe about a hotel, the front-desk clerk at the offending property may be listening, too.

Hotels and resorts are amassing a growing army of sleuths whose job it is to monitor what is said about them online—and protect the hotels’ reputations. These employees search social networking sites like Facebook and Twitter for unhappy guests and address complaints. They write groveling apologies in response to negative reviews on TripAdvisor. And they keep tabs on future guests who post about upcoming stays—and sometimes offer them extra perks or personalized attention at check in.

For travelers, the upshot is that if you use social media, your complaints could have more power. In years past, guests unhappy about a lumpy bed, grimy bathroom or an awful view had to take their frustrations to the front desk or hotel manager and hope for some restitution. Now, with some guests having hundreds—and even thousands—of followers on Twitter and Facebook, complaints can have a big audience. It’s like every guest has a virtual megaphone.

If you want to increase the odds that your complaint will be heard, include the full name of the hotel and your real name. Those moves got Paul Horan upgraded from a room with a view of air conditioning ducts to one overlooking the pool at the Orlando World Center Marriott Resort in Florida.

Mr. Horan, a 47-year-old who works in sales at a software company, tweeted, “At the Orlando Marriott World Center for RIM WES 2010 [a technology conference]. But I have the crappiest room in the hotel.” Front-desk employee Zachary Long saw Mr. Horan’s comments while searching Twitter and went into damage-control mode. Mr. Long had a note of apology for the “current room situation” slipped under Mr. Horan’s door and offered to move him to a pool-view room the next day.

“It was on Twitter, so it could spread,” Mr. Long says.

“It was a complete shock” that Marriott saw the message and reacted, Mr. Horan says.

Guests that reach out to hotels through social media channels may find themselves getting freebies and better service. Mr. Long, along with his colleague Sarah Pribila, have handed out wine, milk and cookies, and better rooms to guests they know are coming because they interacted with them on Twitter in advance. “No doubt we do go out of our way a little bit for Twitter and Facebook” commenters, says Mr. Long, in part because it’s only a small number of people. For now, only about 1% of their guests are active on Twitter, Mr. Long says.

During a recent technology conference at the hotel, an attendee who moderates and edits an influential website about BlackBerry news mused about his desire for a cold beer over Twitter. Already identified by Mr. Long and Ms. Pribila as an active blogger with more than 1,000 Twitter followers, the hotel responded over Twitter, “Can I buy you a beer? Stop by the “actual” Front Desk and ask for Sarah!”

The recipient, 29-year-old Chris Parsons from Halifax, Nova Scotia says, it “kind of took me by surprise. I’ve never had that kind of customer service—just out of the blue.” The hotel bought him a bucket of 10 Coronas to share with friends on the hotel’s outdoor patio.

Sometimes using social media to lodge a complaint or request can be more effective than calling the front desk. In March, a guest at the Atlantis, Paradise Island in the Bahamas needed a roll-away bed and some extra towels. It was a “high, high occupancy time for us,” and the guest had called around for help to no avail, said Dean Sullivan, vice president of digital marketing at Kerzner International Holdings Limited, which owns and operates hotels including the Atlantis, Paradise Island, a 3,414 room resort. The guest posted about it on the hotel’s Facebook page. “We got in touch with the GM [general manager] and handled it within the hour,” said Mr. Sullivan.

Savvy hotels are using social media to boost their ratings on TripAdvisor. Earlier this year, front desk employees at the Roger Smith Hotel, a 130-room boutique hotel in midtown Manhattan, started mentioning TripAdvisor to guests checking out. And sometimes employees will send guests a link to TripAdvisor over Twitter or email, encouraging them to leave a review.

Since the beginning of last year, the hotel jumped about 100 places in New York City hotel rankings on the review site, says Brian Simpson, director of social hospitality for the hotel.

Hotels know that many travelers now use the Web—and specifically the reviews, blog posts and other online missives of past guests—to decide where to stay. About 41% of leisure travelers and 50% of business travelers say user reviews influence their travel decisions, according to a survey from comScore Inc., a firm that tracks online traffic, and Google Inc.

At the Orlando World Center Marriott, Mr. Long and Ms. Pribila track what is said about their 2,000-room hotel every day, and often into the night.

One recent afternoon, Mr. Long peered at the computer in his small windowless office and opened up HootSuite, a program that lets users organize the millions of comments passing through Twitter at any given moment. He scanned the lists he has permanently set up on the software: current guests, past guests, people tweeting about Orlando hotels (so he can send notes to try to drum up business.), people tweeting about his specific hotel, and people tweeting about a conference currently at the resort. He checks HootSuite at least once an hour on his iPhone, often glancing at it while roaming the sprawling resort dotted with palm trees.

Via the hotel’s @TheFrontDesk account on Twitter, he and Ms. Pribila chat with future, current, and past guests. They answer questions and confront complaints. Then Mr. Long moves on to FourSquare, a website where people can use their mobile device to broadcast their physical location to friends, known as “checking in” at a location. “We monitor these people as well,” says the 28-year-old.

Some hotels are hiring outside consultants like StepChange Group, a division of Powered Inc.. The Portland, Ore., company develops social media strategies for companies, and will also help staff watching online commentary and respond. More hotels are employing new services like those offered by Revinate LLC that track online comments and reviews and send out electronic reports for corporate mangers, front-desk staff and even housekeeping to gauge a property’s online reputation. Hotels are also increasingly using social media to market their properties, too, by, for example, sending out special discounts via Twitter.

“Our day has sort of gone into a 24-hour cycle because we are constantly monitoring” online comments, says Mr. Sullivan of Kerzner. Mr. Sullivan—who often checks online commentary around midnight before going to bed—helped train what internally is called “the Twitter Army,” at the Atlantis, Paradise Island. Staff that had previously showed an interest in social media got tips on what content to post, like updates on the resort’s dolphin interaction programs, and some will start monitoring and responding to guests. Headquarters’ staff, hotel employees and top executives already monitor the company’s Facebook pages and online reviews as part of their jobs, Mr. Sullivan says. The company also hired StepChange last year to work on strategy and fill in gaps, such as monitoring middle-of-the-night missives.

You’re unlikely to get into an online brawl with a hotel. Most hotels tend to shy away from back-and-forth public confrontation. Instead, they usually respond to negative comments by apologizing, pointing out recent improvements made at the hotel and asking the guest to contact staff over email or phone to privately solve the problem. The Ritz-Carlton, owned by Marriott International Inc., for example, doesn’t allow its properties to respond publicly to TripAdvisor reviews, but does read them and make an effort to track down guests to fix problems, says Allison Sitch, senior corporate director of public relations for Ritz-Carlton.

Of course, to get better service from a hotel using social media, the hotel has to be listening. For now, hotels’ approaches to social media vary widely—even among hotels of the same brand. While the Marriott Orlando World Center is very active on Twitter and Facebook, for example, the New York Marriott Downtown doesn’t have either up and running.

With more properties paying attention to social media outlets, here’s how to use them to snare better service:

    * Find out how to reach your hotel online. Search Twitter and Facebook to see if it has an account.

    * If there’s no account for the individual hotel, search for the company that owns the brand. For a Westin, search for Starwood. For a Courtyard, look for Marriott.

    * Before you check-in: Post a comment on the hotel’s Facebook page or send a tweet saying you’re looking forward to your stay. A savvy hotel will put you on its radar and may dole out perks or give specialized service.

    * When tweeting a complaint, be specific. Don’t say “I hate my hotel,” say “I hate X hotel for Y reason.”

    * Use the hotel’s specific “handle,” or Twitter name in your message, like @StarwoodBuzz for a Starwood property

    * Use your real name so a hotel can find you in their reservation system. You can’t get your complaint addressed or extra perks if you can’t be tracked down.

    * Have a lot of online friends or followers. Hotels will pay more attention to your requests.

    * Don’t be unreasonable. If the hotel senses you’re a lost cause, it may spend less time trying to fix the problem.