Observation is a primary method of collecting data by human, mechanical, electrical or electronic means. The researcher may or may not have direct contact or communication with the people whose behaviour is being recorded. Observation techniques can be part of qualitative research as well as quantitative research techniques. There are six different ways of classifying observation methods:

  1. participant and nonparticipant observation, depending on whether the researcher chooses to be part of the situation s/he is studying (e.g. studying social interaction of tour groups by being a tour participant would be participant observation)
  2. obtrusive and unobtrusive (or physical trace) observation, depending on whether the subjects being studied can detect the observation (e.g. hidden microphones or cameras observing behaviour and doing garbage audits to determine consumption are examples of unobtrusive observation)
  3. observation in natural or contrived settings, whereby the behaviour is observed (usually unobtrusively) when and where it is occurring, while in the contrived setting the situation is recreated to speed up the behaviour
  4. disguised and non-disguised observation, depending on whether the subjects being observed are aware that they are being studied or not. In disguised observation, the researcher may pretend to be someone else, e.g. "just" another tourist participating in the tour group, as opposed to the other tour group members being aware that s/he is a researcher.
  5. Structured and unstructured observation, which refers to guidelines or a checklist being used for the aspects of the behaviour that are to be recorded; for instance, noting who starts the introductory conversation between two tour group members and what specific words are used by way of introduction.
  6. Direct and indirect observation, depending on whether the behaviour is being observed as it occurs or after the fact, as in the case of TV viewing, for instance, where choice of program and channel flicking can all be recorded for later analysis.

The data being collected can concern an event or other occurrence rather than people. Although usually thought of as the observation of nonverbal behaviour, this is not necessarily true since comments and/or the exchange between people can also be recorded and would be considered part of this technique, as long as the investigator does not control or in some way manipulate what is being said. For instance, staging a typical sales encounter and recording the responses and reactions by the salesperson would qualify as observation technique.

One distinct advantage of the observation technique is that it records actual behaviour, not what people say they said/did or believe they will say/do. Indeed, sometimes their actual recorded behaviour can be compared to their statements, to check for the validity of their responses. Especially when dealing with behaviour that might be subject to certain social pressure (for example, people deem themselves to be tolerant when their actual behaviour may be much less so) or conditioned responses (for example, people say they value nutrition, but will pick foods they know to be fatty or sweet), the observation technique can provide greater insights than an actual survey technique.

On the other hand, the observation technique does not provide us with any insights into what the person may be thinking or what might motivate a given behaviour/comment. This type of information can only be obtained by asking people directly or indirectly.

When people are being observed, whether they are aware of it or not, ethical issues arise that must be considered by the researcher. Particularly with advances in technology, cameras and microphones have made it possible to gather a significant amount of information about verbal and non-verbal behaviour of customers as well as employees that might easily be considered to be an invasion of privacy or abusive, particularly if the subject is unaware of being observed, yet the information is used to make decisions that impact him/her.