Euclid Analytics is one of several companies that recently began assisting brick and mortar retailers in tracking consumer behavior, via their smartphones, as they enter, exit, and move around stores. It may be easy to label this technology, mobile location analysis, as “creepy”, but it is by no means illegal (at least not yet). Some may even find having a coupon for jelly pop up on your iPhone just a moment after you’ve tossed peanut butter into your cart very convenient- MIT Technology Review proposed this hypothetical scenario.
Just a few weeks ago we wrote about how online retailers monitor consumer behavior in order to customize their offerings to better fit both the consumers’ and the business’ needs. Brick and mortar retailers argue that they’re simply catching up with online retailers’ use of cookies and target marketing.
The Practice
The New York Times recently reported that all sorts of stores are trying out mobile location analysis with the intent of tweaking operations such as changing the layout of a store to better serve their clientele.
Every mobile device has a unique identifier (a number) known as a MAC address that – at least until now – many of us had probably known little about. Once used to help mobile carriers locate stolen devices, today MAC addresses allow retailers to anonymously track an individual, as soon as his or her phone establishes a connection with a wireless network. The tracking begins once the store’s Wi-Fi connection recognizes that your device is within its range. You should note that this connection is established regardless of whether you actually use the network.
When combined with video surveillance, mobile location analysis can give retailers insight into a wide variety of activities ranging from how much time guests spend in a coffee shop to whether or not a new grill display in a Home Depot is attracting the target consumer. If analysis indicates that the average guest spends 4 hours in the coffee shop, and the manager considers that time to be too long, he or she may consider altering the shop’s refill policy. And if the store operators at this particular Home Depot find that mostly women are looking at the grill display, they might change its location if they wish to increase sales to men.
Is this legal?
Findlaw Free Enterprise Blog recently wrote that tracking practices are, in fact, legal. Furthermore practitioners are not (at least not yet) obligated to disclose these activities. And even if you’re given the choice to opt-out of mobile location analysis while carrying on as you normally would, doing so is not an easy task. First of all you have to know your MAC Address and, well… what’s that again? Exactly.
Forbes’ Tech Privacy Writer Kashmir Hill recently reported about Target’s discovering a teenage girl’s pregnancy before her father did. It’s an interesting read, but even more interesting was what Target had to say: ”But even if you’re following the law, you can do things where people get queasy.” Bradley Voytek, a neuroscientist who told the New York Times that “The creepy thing isn’t the privacy violation, it’s how much they can infer,” might agree.
According to Forbes, several tracking companies aim to be upfront with everyone- from consumers to legislators – about what they’re doing, how they’re doing it, and how you can opt-out. Nordstrom is one retailer that disclosed that tracking activities were taking place but did so after it had already began testing Euclid’s services in 17 of its stores.
This angered many Nordstrom customers, and at least one elected official, U.S. Senator Chuck Schumer, argued that disclosure alone is not enough. So today, 9 tracking companies including Euclid have teamed up with privacy leaders and Senator Schumer in pledging to follow a streamlined code which would make it easier for consumers to opt out in one place- kind of like a do-not-call registry. For now, we do know that there is at least one sure-fire way to opt out. Lisa Wirthman points out in Forbes that “If all else fails, consumers still have one option left: Turn off the Wi-Fi on their phones–or better yet, turn off their phones completely.”
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