Statistics on the hottest goods or services sold by an online store can be useful for making other business decisions, however. Karen Askey, senior vice president of consumer marketing at Preview Travel, says traditional travel agencies could employ the same promotional tactics, but adds that she doubts they could spot top destinations as quickly. But other tools for Web sites are more controversial. Once a Web surfer starts clicking around the virtual aisles of an online store, merchants can monitor their every move. But cookies also are a powerful device for monitoring a user's behavior within a site, one that can tell a merchant whether you linger in the lingerie department or gawk at golf clubs.
Cookies give Web merchants a leg up on their competitors in traditional retailing.
They can follow the meandering of window shoppers, then use the information to target promotions at them on return visits. And, unlike their physical counterparts, an online merchant can rearrange the entire layout of a store in real time, sticking an advertisement for, say, parkas on the front door when a ski bum comes calling. Meanwhile, Internet cookies have unnerved privacy advocates and others who believe customer surveillance could eventually backfire on merchants, particularly since most users don't know they can be monitored so closely. But those fears may be a bit premature. A recent study of online merchants by Jupiter found that while sites were using customers' explicitly stated preferences to deliver personalized services to them, no sites were using data they had gathered by watching customer actions.