It’s said that a frog placed in a boiling pot of water will escape, but if the water is slowly heated the frog will habituate and eventually die. Although scientists dispute the accuracy of this statement, no one in the audience of marketers objected—or even said it was ethically inappropriate—when a digital-advertising executive used the image in an off-the-cuff suggestion of how marketers ought to treat people in physical stores. The occasion was a conference called The Internet of Things: Shopping that the online trade journal MediaPost convened in Manhattan during August 2015. The speaker, vice president of one of the world’s largest interactive agencies, wasn’t invoking the frog image because he wanted to kill shoppers; he was addressing the concern that people would push back against beacon surveillance. Department stores, supermarkets, pharmacies, discount chains, and other retailers have among them already placed hundreds of thousands of these inexpensive devices throughout their stores.1 If shoppers carry the right apps on their smartphones and have the correct technology turned on, the beacons will alert the merchants and they can send the shoppers personalized coupons or other messages associated with the goods in a beacon’s proximity. “We need to do a lot of hand-holding with our customers in the new environment,” he urged. The goal had to be to treat shoppers like “a frog in a pot of boiling water”: they had to be introduced to all the changes slowly so that they would come to consider them as a normal part of their lives.
Brandon Fischer, director of predictive insights at the influential GroupM Next consultancy, offered a view of the in-store surveillance future that seemed to embrace the frog comparison. In a keynote talk at the meeting, he predicted that by 2028 half of Americans (and by 2054 nearly all Americans) will carry in their bodies device implants that communicate with retailers as they walk down the aisles and inspect various items.2 Based on how long you hold an item the retailer’s computers will tell whether or not you like it. Other signals from the implant will indicate whether you are nervous or cautious when you look at the price of the product you are holding. The analysis may lead, Fischer suggested, to a conclusion that a discount on the product may reduce your nervousness and lead you to purchase it. His argument was a blunt, optimistic case for biometric monitoring in stores. And just as with the frog-invoking executive, no one in the room protested. No one wondered, either, whether in just thirteen years people would realistically consider this activity natural.
The attendees’ nonchalance might seem strange, but the retailing business was changing so drastically and confusingly that such statements may well have seemed plausible. The message the marketers were hearing at the meeting and throughout their industry was that retailing is entering a new, hypercompetitive era with internet sellers. Brick-and-mortar merchants—the department stores, supermarkets, specialty stores, and chain stores that are still the center of the retailing universe—will succeed only if they figure out how to trace, quantify, profile, and discriminate among shoppers as never before. But for stores to survive this transition, shoppers will have to slowly learn to accept, even welcome, those eyes in the aisles as part of their natural environment—sort of like the frog in the pot of water.
This book is about how and why all of that is taking place, and the impact it is having on individuals as well as on society at large. I’ll show how a new generation of merchants—Walmart, Target, Macy’s, Stop & Shop, Safeway, Lord & Taylor, and many more—is working with a set of technology organizations to build a new future for physical retailing. They are reorganizing shopping to capture data about us through the very media we carry, even wear (such as a Fitbit). The goal is to routinely track us, store information about what we buy and when, and score us based on that and other information. Different forms of these activities are already under way in many stores. Retailers are using increasingly sophisticated electronic monitors, which show up first as experiments and then become ordinary elements of shopping. We typically feel their presence through personalized discounts often linked to our rewards cards. Depending on who you are and where you shop, you may already have experienced early versions of the following situations—scenarios some shoppers would consider wonderful:
• As you walk into an upscale department store, you may or may not realize that your phone signaled your arrival. The store cares because you belong to its loyalty program and have achieved high-value-customer status. Your presence is indicated to a store representative, whose tablet calls up your photo so she can recognize and greet you. The tablet also reveals which clothes you looked at on the store’s website during the past week as well as the clothes you clicked on when you accessed the store’s ads while visiting other websites during that period. Based on previous purchases and the information it has concerning your age, income, occupation, and family status, the store’s computer predicts which of those garments you will buy. It also suggests matching accessories, again based on your website visits, previous purchases, and the special predictive sauce that mixes these behaviors with demographic information. When you complete your shopping and go to pay, you are pleasantly surprised to find that the computer is rewarding your loyalty in the form of a 20 percent discount on your purchases that day.
• You enter your local supermarket, with the store’s app on your smartphone. The app instantly springs to life as you walk toward the first aisle. It retrieves your shopping history and loyalty score from the firm’s computers and links them to the shopping list and Web coupons you had loaded on the app at home. The computer analyzes this information and concludes that this is a stocking-up visit rather than a drop-in for only a few items. Complex personalization formulas, which evaluate your shopping list and your location in the store, present you with ideas about what to buy, recipes based on what’s in your cart, and discounts. The formulas also factor in information the supermarket has bought from data firms about your socioeconomic status, and assessments on where you are on various product buying cycles. Do your purchase patterns suggest you are at moderate risk for switching away from a particular shampoo? Does your increasingly less frequent purchase of a specific brand of diapers suggest a situation that can be countered with a $2 coupon (through a deal with the manufacturer), or is it likely your child is now potty-trained and so no longer needs them? Based on your shopping history, the formulas predict the extent of discounts that are needed to make you feel good about your shopping experience while also getting you to spend at least 10 percent more than you did the last time you came in to stock up.
• A similar scenario takes place in the big-box discount chain you visit often to buy household items. In addition to the information the supermarket used to send you messages and deals, this merchant has bought predictive data about your likes and dislikes based on the products you discuss on Facebook. The chain also bases its formulas for offering you discounts partly on an “influence” score it has bought from a company that evaluates the number of friends you have on social media and your degree of influence on them. For this trip you use the store’s app on your phone to scan the products you want to buy, incorporating the personalized discounts as you go. Your loyalty status and checkout history give you the ultimate reward: by using your phone to scan your purchases, you bypass the long checkout lines and instead simply push a button at a station near the store’s exit. There the retailer’s computers also compare your scanned items with your purchase history and conclude you have not stolen anything. No one searches your bags (as sometimes can happen at stores that allow product scanning throughout the store as opposed to a single designated checkout location near the exit), so you’re out superfast. No sweat.
Then again, depending on who you are and where you shop, you may already have experienced early versions of these personalized experiences many would consider unpleasant:
• No store representative greets you when you walk into the upscale department store, because your customer status doesn’t warrant it even though you belong to the store’s loyalty program. The store’s computer knows from your shopping history and background that you typically purchase clothes with greatly reduced sale prices, and that you are likely to continue doing this. Representatives therefore prefer not to spend time with you, but you don’t mind not being shepherded through the store; in fact, you rather like wandering alone. However, at checkout you see people in front of you joyfully surprised with 20 percent discounts, and you’re envious. If you were given an extra 20 percent off that already on-sale sweater you were admiring, you might be able to justify buying it.
• You live in a lower-income neighborhood and typically rely on a local independent grocer for all your shopping. This merchant doesn’t accept electronic coupons, and the paper ones you receive in the mail or encounter in the store don’t match your needs terribly well. You occasionally do go to the chain supermarket in a different part of town, and you’ve found that your smartphone app does give you some relevant offers. It seems, though, that the supermarket’s computer doesn’t know enough about you to give you the various good deals that you hear other customers discussing with friends as they circulate among the aisles. In fact, at the checkout you notice some shoppers getting great deals on products you would like to try, but you have to pay full price. Even a coupon for $2 off on one of those goods would be nice to have. You wonder if providing the app with more information about yourself would bring you better deals. But even if that would work, you don’t know how to do it.
• You stop at a convenience store to pick up a few things. Once inside you notice a sign stating that the store’s cameras use facial recognition technology to search databases for people who have criminal records. You actually have such a record, though it’s several years in the past. The presence of the data-retrieval software may or may not explain why an employee seems to be following you as you move through the store. It also may or may not explain the curt treatment from the clerk when you go to the register to pay, as well as his prolonged examination of the $20 bill you offer as payment.
Before you feel too relaxed because you are the recipient of great service and a lot of coupons, realize that the behind-the-scenes tracking may well have consequences you might not like. Retailers might hire statistical consultants to generate reports about your eating habits based on the food you buy or about your weight based on the clothes you look at online and in the store, or to develop more specific health prognostications based on the groceries and nonprescription drugs you purchase. Their portrait of you may result in some nice coupons for you to redeem now, but it may turn sour later as you age, as statistical formulas may well make unflattering inferences about you and your family. Consider, too, that some retailers sell or trade the information they compile about their customers; some even assign “attractiveness” scores to shoppers based on this data. The scores and the many points of information about you may affect the sorts of insurance offers, food and clothing advertisements, and travel deals you receive. And in the not-too-distant future the knowledge that companies have developed about you may lead news organizations to highlight, and even rewrite, certain stories for you, and advertisers to provide you access to certain pay television programs but not to others. Much of this will be happening—and so much is already happening—without your consent or knowledge.
Oddly, although these practices relate to the ongoing and widespread public discussion about privacy—many government hearings and papers, advocacy-organization reports, academic meetings, and popular press pieces discuss the ways online marketers and government agencies track citizens—retailers only barely figure in the debate. The shopping aisle has, in fact, received almost no attention even among academics who focus on the social implications of consumer surveillance—an unfortunate trend, because the traffic that retailers can track through those physical doors is huge. According to the Food Marketing Institute, in 2015 Americans made an average of 1.5 trips per week to a supermarket.3 The National Association of Convenience Stores (NACS) reports that in 2014 customers made nearly 160 million visits per day to the 152,794 convenience stores in the United States—58 billion visits per year.4 And according to the leading retail analysis company ShopperTrak, during November and December 2013 Americans paid 17.6 billion visits to malls, department stores, “big-box” stores such as Walmart and Target, and specialty retailers such as Express.5
Although visits to supermarkets and convenience stores have remained rather steady in recent years, foot traffic to the stores that ShopperTrak audits has decreased substantially; the 17.6 billion in 2013 had been 33 billion in 2010.6 Industry insiders generally believe that this drop is the result of increasing numbers of purchases over the internet. Because people can now shop electronically and have access to quick-delivery options, physical stores are competing with sellers not just in the same city or country, but from all over the United States, and even the world. What’s more, even when shopping in a physical store, customers access the internet from their smartphones to use as a competitive weapon: product ratings, price comparisons, comments of friends via social media, and ads from competitors all affect whether and how much people buy. For their part, most brick-and-mortar merchants have tied part of their fortunes to electronic sales, and in the process now can also successfully track and profile shoppers, largely without their permission. Yet despite the huge growth of online commerce in the past decade, numerous studies indicate that over 90 percent of product purchases in 2015 still occurred at checkout counters in physical stores, and few in the industry are close to suggesting that they will fade away in the near future.7 Industry experts do agree that brick-and-mortar merchants will succeed only by making the tracking abilities of their physical stores at least as good as or better than the virtual ones for targeting individuals with products and pricing. This includes using their data sources to create personalized messages for shoppers as they track them entering the store and proceeding through the aisles.
The implications are profound. The retail industry’s data-centered activities are restructuring the architecture of both physical and digital retailing as well as the relationship between the two in ways that turn enormous information gathering into something customers take for granted. To make shoppers they care about feel good about making purchases, merchants are fashioning new visions of “rewards” that remake the retail phrase “owning the customer” for the internet age. “This is an era of unprecedented change for retail,” Target’s chief financial officer told the New York Times in 2014. “In order to win,” he said, stores must keep “guests engaged with you as a business.”8 For Target and many other merchants, building relationships with individual shoppers today requires monitoring and discrimination. Retail monitoring involves gathering or purchasing information about shoppers’ backgrounds and activities with or without their explicit permission or knowledge. Retail discrimination has two meanings, numerical and prejudicial. In the first sense, discrimination is a human and organizational impulse to note differences among things and among people. In stores it means maintaining records on individuals and performing complex quantitative analyses on that data—for example, determining which incentives will get particular individuals to buy more goods. Prejudicial discrimination follows as a result of the value the retailer places on each individual based on perceived differences: the retailer will offer specific shoppers different discounts on particular products reflecting the data’s statistical portraits of those individuals and their families.
Part of retail discrimination is to identify customers deemed to have a relatively high “lifetime value” (a shopper’s lifetime being typically defined as five years). These profitable shoppers receive tailored deals aimed to keep them coming back. Customers on the lower-valued end of the shopping spectrum typically aren’t treated poorly; they may even get personalized discount offers in the hope that their value to the store might increase. But they will not enjoy anything like the attention and value the loyal customers enjoy. Moreover, some retailers downgrade the benefits of their loyalty program for customers judged to be of less value to the store based on the amounts they spend.9
These monitoring and discrimination activities usually fly under the public’s radar. An exception was a New York Times article discussing Target’s analysis of customer purchase patterns to identify pregnant customers. In the case of one family a father discovered his teenage daughter’s pregnancy only because the retailer had mailed her a package of pregnancy-related deals.10 These occasional press accounts no doubt cause at least some concern among those who also worry about contemporary government and corporate surveillance, but this coverage ignores a deeper development. The transformation of retailing is, at the core, a rethinking of the ways merchant-customer relationships should take place in the twenty-first century. Monitoring and discrimination are certainly critical to this rethinking, but they are only part of an accelerating project to redefine relationships with shoppers. Retailers’ strategy is to mix shrewd loyalty programs, high-tech tracking instruments, and esoteric statistical manipulation with soothing brand images and smoke screens in such a way that shoppers accept systematic biases about them. Merchants ramp up “rewards” regimes (which they internally call “loyalty programs”) that position store monitoring and discrimination as useful twenty-first-century values. In the process, the retail industry develops ever-evolving technologies to identify desirable prospects, encourage and maintain customer loyalty, and personalize attractive deals for individuals declared winners by the algorithms—and less-attractive deals for algorithmic losers.
We are only at the beginning of this new road. Stores are still struggling with how, when, and where to implement their data-driven regimes. The reshaping of retailing will likely add data-driven anxieties to both buying and selling. Stores will become centers of stress as dueling shopper and retailer technologies reach sometimes diverging conclusions about price and preferential treatment. Sellers will have to change prices constantly; introduce new products rapidly; and continually adopt new ways to define, identify, track, reevaluate, and keep wanted customers. Shoppers, who will continue to experience traditional stress about product quality and cost, will also now feel uneasy about what particular stores know about them and how the stores score them, and concerned about the impact this information will have on their shopping experience. They will also learn that trying to get on the good side of their favorite merchants means opening spigots to their personal information.
As of this writing policy experts, advocates, executives, and academics are arguing fiercely about the legality and ethics of data mining by online advertisers and the National Security Agency. Trade magazines, general magazines, newspapers, books, and a wide range of internet sites are sounding boards for many of these debates. In response, the Federal Trade Commission, Federal Communications Commission, Congress, the White House, and advertising industry groups propose and even push through regulations, laws, and self-regulation principles regarding concerns about social and individual harms. Ironically, at the same time, in a corner of society rarely mentioned by data policy makers, the retailing industry is working tirelessly to convince Americans to accept the notion that offering up information about themselves is a natural part of life. The very activities that dismay privacy and antidiscrimination advocates are already beginning to become everyday habits in American lives, and part of their cultural routines. Retailing is at the leading edge of a new hidden curriculum for American society—teaching people what they have to give up in order to get along in the twenty-first century.
Why is this happening, and how? And what do these changes mean for physical stores, the people who shop in them, and the larger society? The chapters that follow explore these questions, but first we should outline a social framework to help us understand what is taking place. Central to this framework are the meaning and the role of retailing’s hidden curriculum—how it entered society, and how it spreads. The term hidden curriculum historically hasn’t been applied to the world of merchants and customers. Philip Jackson coined it for his 1968 book Life in Classrooms to mean unintended lessons which are learned in school.11 The basic idea goes back much earlier. The renowned turn-of-the-twentieth-century sociologist Emile Durkheim wrote in his book Moral Education about the generalizations students inevitably stitch together as an unspoken behavior code. “There is a whole system of rules in the school that predetermine the child’s conduct,” Durkheim said. “He must come to class regularly, he must arrive at a specified time and with an appropriate bearing and attitude. He must not disrupt things in class. He must have learned his lessons, done his homework, and have done so reasonably well, etc. There are, therefore, a host of obligations that the child is required to shoulder. Together they constitute the discipline of the school. It is through the practice of school discipline that we can inculcate the spirit of discipline in the child.”12
Using hidden curriculum as a term to encapsulate Durkheim’s meaning, Jackson and others followed him in exploring under-the-hood concepts young children pick up as part of their schooling. Much of their writing centers on how the hidden curriculum connects young people to the structures of power in society and defines their relationships to them. Some analysts describe ways schools implicitly lay out norms and values that are crucial for navigating the outside world; these ideals teach students “an approach to living and an attitude toward learning.”13 Jean Anyon echoes French sociologist Pierre Bourdieu in stressing the importance of cultural capital in the kinds of hidden curricula students learn about how they should relate “to physical and symbolic capital, to authority, and to the process of work.”14 Similarly, Samuel Bowles and Herbert Gintis argue that a connection exists between the unstated lessons schools teach children on one side, and the social classes to which the children belong on the other. “Schools do different things to different children,” they insist. “Boys and girls, blacks and whites, rich and poor are treated differently.”15 The result, they contend, is a silent message about the future paths they should take—for example, the low-income or high-income occupational choices that best fit them. Paul Willis adds that the hidden curriculum of schools stubbornly reproduces the existing power structure of the society; even the ways student cliques form and resist administration policies within schools often echo the class distinctions of the students.16
Of course, any kind of situation can teach unintended lessons. Moreover, the notion that an institution—for example, religion, medicine, the law, and retailing—tends to re-create the dominant economic and political structures of the society is at least as old as Karl Marx. What makes the concept of a hidden curriculum attractive is not so much that it stresses broad, mechanistic lines of capitalist social power. Rather, the idea refers to patterns that quietly encourage students to absorb and act out their present and future social roles through the repetition of rules, stories, and performances that reflect, sometimes inconsistently, on a range of social status levels.
George Gerbner broadened the context of the hidden curriculum when he used it in relation to popular culture in general. An undergraduate folklore major who received his PhD in education, Gerbner spent most of his professional life as a professor and dean of communication studies. He received federal grants to study the portrayal of teachers in movies and television during the late 1950s, and the nature of violent images on television during the 1960s and 1970s. Conducting this work through the lens of folklore studies, he understood that telling stories is fundamental to every society. No stories are objective reproductions of reality. Folklorists emphasize that tales of all sorts serve up systems of messages that parade norms, values, and moral definitions, and tell people how to frame the world. Gerbner noted that the key difference between a society’s traditional stories and those told by television, movies, and magazines lies in folklore’s “handicraft” nature. Created and diffused organically through society, folklore is a product of the individuals who tell the stories. Modern media tales, news and entertainment, are by contrast created by industries where the concerns of organizations take precedence over all else. The stories result from media firms’ need to satisfy marketers, investors, and, sometimes, politicians who benefit from showing people certain views of reality and not others. In a 1972 article Gerbner goes on to apply the term hidden curriculum not just to the educational institution but to the education people receive via widespread media—particularly television—about all institutions from their depictions in news and entertainment. He writes:
The facts of life in the symbolic world form patterns that I call the “hidden curriculum.” . . . [It] is a lesson plan that nobody teaches but everyone learns. . . . Culture power is the ability to define the rules of the game of life that most members of a society will take for granted. That some will reject and others will come to oppose some of the rules, or the game itself, is obvious and may on occasion be important. But the most important thing to know is the nature and structure of the representations that most people will assume to be normal and inevitable.
Following Gerbner’s logic, it’s no great stretch to port the idea of the hidden curriculum to the retailing scene. For one thing, stores are cavalcades of media depictions reaching out to people with ideas about what’s good, bad, and ugly. Images on underwear packaging suggest the ideal body. Photos of athletes on cereal boxes suggest the sports that society should consider important—and the idea that people, especially kids, should be interested in sports at all. Tables of data and testimonials on all sorts of food containers call out norms of health and how to get there. The puzzles on kids’ snack boxes quietly define intelligence and measure where a child falls within this definition. These sorts of representations suggest certain ways of thinking about the world in line with various alleged fitness, health, sports, and education authorities. But stores and the malls in which they are often enclosed also provide learning opportunities about what social characteristics mean. Different settings bespeak different notions of style in relation to various social distinctions of gender, race, ethnicity, lifestyle, and, especially, age and income.
The display photos of people in store windows and around selling spaces are often the most obvious signals of who is an anticipated customer and who isn’t. Senior citizens, for example, are not poster people for clothing chains that want to appeal to a more contemporary crowd. Outdoor recreation stores tend to depict mobile, active enthusiasts, not individuals who are confined to wheelchairs. A store that wants to attract a wealthier clientele typically places upscale decor at the entrance, has wider aisles, and outfits its clerks in more formal wear. By law anyone can enter any of these places and make a purchase. And in fact many do cross the boundaries, for example shopping at both Walmart and Tiffany, Target and Louis Vuitton. Yet mall operators understand the meanings of these distinctions quite well, and they train shoppers accordingly. Mall planners cluster stores based on age, wealth, and lifestyle; establishments aimed at young adults, the rich, discount seekers, and outdoor enthusiasts are among those that each get their respective areas, often with distinct architectural designs and signage. Americans may or may not agree with the features the retailing establishment uses to draw attention to particular goods, but they do not actively rebel against them. The prevalence of the symbol systems that designate trendy clothing, outdoor happiness, and wealth suggests that, to the contrary, many shoppers take them for granted and accept that they accurately reflect the way of the world.
Retailers did not intentionally create these distinctions any more than schools or television created their hidden curricula. Nevertheless, these hidden curricula serve an institutional purpose: to cultivate and maintain discipline in the case of schools; to present readily understandable elements for telling stories (and generating profits) in the case of popular media; and to tie goods and shopping to certain meanings (also to generate profits) in the case of retailing. Now we are on the cusp of a retailing era that is adding an entirely new layer of routine surveillance activities and that carries with it the accompanying underlying lesson that it is common sense for shoppers to accept individualized profiling and deal making as part of the process of buying things. The importance of accruing data to learn about individuals certainly did not originate with the world of shopping. Yet, as with schools and media, retailers felt a strong need for such activity. In the trade press, at trade conferences, and in more than two dozen interviews for this book, people associated with retailing stated the need to retrieve a tsunami of data from customers, and this information is changing the ways merchants think about their businesses and about the people who frequent them.
Moreover, recalling George Gerbner’s view of the modern symbol system, the engines powering this new world with its new hidden curriculum go beyond the retailers and their traditional suppliers. True, Walmart has built its own audience-tracking-and-analysis division, but most other retailers are tying into a large and growing subindustry of firms that aim to be part of the steps that turn customer data into gold. Terry Kawaja of the investment banking firm Luma Partners has attempted to chart the players in the online and mobile app part of this new world. He calls his pictorialization the “Commerce Lumascape,” encompassing hundreds of competing companies involved with retailing under labels such as “order management,” “analytics,” “white label solutions,” “software as a service,” and “price comparison.” Kawaja has not, so far at least, created a chart that describes these sorts of firms in the physical retailing space. Yet they, together with their online counterparts and major retailers, are building monitoring into people’s routine daily activities. The transformation of physical retailing as a result of this work is creating the new hidden curriculum for our time. The word transformation is important. The world of physical retailing is a radically mutating place. Neither Gerbner nor the writers who focused on schooling’s hidden curriculum dealt with a part of society that was transforming radically. My goal is to show how the retailing institution creates a hidden curriculum as retailing re-creates itself.
Of course, not all of what people learn about how an institution works is unstated. Some of it, such as not to shoplift, may be quite direct. But people do absorb many unstated messages from schools, the media, retailing, and other institutions about how the world works. They integrate them into everyday interactions with those and other institutions. This is not a straightforward process. We may be taught to believe that the ways we deal with stores stem from our individual needs, resources, and personalities. Yet we often don’t consider the possibility that many within retailing often force, encourage, cajole, or otherwise get people in relationships with them to perform certain basic activities in ways that benefit their organizations. Doing that routinely leads shoppers to translate the organization’s hidden curriculum into the “common sense” of everyday life. Sociologists Thomas Berger and Peter Luckman, authors of the classic book The Social Construction of Reality, wouldn’t be surprised; it’s simply how institutions work.17 They note that institutions, “by the very fact of their existence, control human conduct by setting up predefined patterns of conduct, which channel it in one direction as against the many other directions that would theoretically be possible.” They add that the institutional world requires “the development of specific mechanisms of social control” that encourage people to do things that support the continued existence of those institutions.18
Although it may not seem so at first glance, the creation of loyalty is a key mechanism of social control retailers try to make into common-sense. That is, through loyalty, merchants aim to lead customers to engage in everyday activities that strengthen the merchants’ businesses. In a long and thoughtful treatise on loyalty, legal philosopher George Fletcher implies that you gain loyalty from others—that is, you cause them to stay with you—by offering two fundamental benefits, protection and privilege. We don’t like to think of friendships, marriages, or citizenship in these terms. But people’s loyalty to individuals and to countries involves a sense that the other person—or the country—will treat them in a special way compared to others who are not in that relationship. These bonds also bring with them an expectation that the relationship is reciprocal. The person receiving protection and privilege knows that he or she has responsibilities toward the other person, country, or organization offering those resources. That will involve offering protection and privilege in return. For example, in a marriage this would mean assistance in times of illness and exclusivity in sexual relations; in the case of a country it may be a decision to serve in the military or volunteer to help the government with expert advice during a war. Individuals will ascribe their own meaning to “privilege” and “protection,” and the definition can also vary depending on the cultural norms of the time.
The same holds for retailing. Merchants often let shoppers know quite clearly that they can benefit from consistent purchases, though the definition of “consistent purchases” may vary by era and by individual store. Similarly, the retailer’s repayment of that fidelity with privilege and protection can mean many things. Privilege can mean access to better prices, better or more relevant assortments of merchandise, advance knowledge of new merchandise, higher-quality items, gifts after a string of purchases, or superior credit terms. Protection might mean offers of security, safety, or other forms of help—for example, ensuring that a purchased tool works, a food is not contaminated, or the merchant’s suppliers are careful. Exactly how loyalty plays out in any given era is the result of the retailing institution’s hidden curriculum and ways particular retailers enact it by reinforcing shopper behaviors for certain everyday activities. It may also have to do with what the retailer sells, how it defines itself among its competitors, and whether it can afford to buck the institution’s existing norms.
Now consider what is taking place in the new data-driven retailing system. The ways stores define a customer’s loyalty and how they should reward it are increasingly dependent on complex analyses of the data retailers accumulate from tracking shoppers and buying additional information about them. One major change from the past is how retailers reward loyalty. Instead of being a straightforward tit for tat based on frequent visits, loyalty rewards have become tools that stores use to track customers, with or without their knowledge. Moreover, retailers and their consultants are increasingly applying loyalty as just one of many metrics to decide which announcements, deals, and discounts they should offer to certain individuals and not to others.
While mainstream retailers continue to encourage shoppers to consider loyalty a reward, it is actually giving way to complex algorithms that often punish people for fidelity. Indeed, a marketing executive of a major retailing chain notes that his company actually lowers prices for individuals deemed less loyal while keeping the prices higher for the ones identified as more loyal.19 Other executives point to the different kinds of messages individuals receive from their companies based on the profiles the companies have gathered and the value they see in those profiles. Yet loyalty is only one element of new retailing regimes being organized to personalize messages in physical stores based on tracking and targeting shoppers virtually everywhere they go. As we will see, department stores, grocery stores, and discount chains are overturning more than a century of democratic impulses regarding loyalty. At the same time, shoppers are reinforced for following a new hidden curriculum that makes the giving up of data—and the bringing in of numerical and prejudicial discrimination—part of the shopping experience.20 In the following pages I detail the behind-the-scenes activities that are changing our everyday shopping experiences in ways we as a society may not want. The activities represent a quantum technological and philosophical departure from how stores operated even at the end of the twentieth century. What we see now, though, is just the beginning. The institutional apparatus seems pretty well oiled, with determined executives and cutting edge technologies. This book follows this group as they create maps for a world that will redefine buyers’ relations with sellers. More than that, the new retail system will encourage shoppers to accept a new, tougher reality in which the old saw that every person’s dollar is worth the same increasingly no longer holds sway. And that means giving up on the historical ideal of egalitarian treatment in the American marketplace.
Today the shopper’s phone stands at the heart of the change taking place. “A consumer essentially carries around a whole store on the smartphone in his or her pocket,” notes a retailing consultant.21 And, as improbable as it may seem, in a few years a chip implant in the shopper may also be part of the in-store messaging system, if technologists can convince enough people that the chips will help them be winners in the aisles. But first it is important to understand what started this transformation and why it’s begun, as well as what is pushing it forward. As Berger and Luckman note, “Institutions always have a history of which they are products. It is impossible to understand an institution adequately without an understanding of the historical process in which it was produced.”22 That’s certainly true about retailing, but it’s a story not commonly told. The journey is outlined in the next chapter.