During the Thanksgiving break, there were several stories about how businesses are tracking customers in order to advertise to them and the reactions to this surveillance. This first story shows how sometimes opt-out choices are almost useless — shoppers can opt out of being location-tracked by turning off their mobile phones, rendering themselves out of touch in case someone needs to contact them for everyday or emergency reasons. In order not to be tracked, a person has to turn off a device that she paid for and that is not supposed to be affiliated with a shopping mall’s tracking technology.
Starting on Black Friday and running through New Year’s Day, two U.S. malls — Promenade Temecula in southern California and Short Pump Town Center in Richmond, Va. — will track guests’ movements by monitoring the signals from their cell phones.
While the data that’s collected is anonymous, it can follow shoppers’ paths from store to store.
The goal is for stores to answer questions like: How many Nordstrom shoppers also stop at Starbucks? How long do most customers linger in Victoria’s Secret? Are there unpopular spots in the mall that aren’t being visited?
While U.S. malls have long tracked how crowds move throughout their stores, this is the first time they’ve used cell phones.
But obtaining that information comes with privacy concerns. […]
Still, the company is preemptively notifying customers by hanging small signs around the shopping centers. Consumers can opt out by turning off their phones.
The tracking system, called FootPath Technology, works through a series of antennas positioned throughout the shopping center that capture the unique identification number assigned to each phone (similar to a computer’s IP address), and tracks its movement throughout the stores.
The system can’t take photos or collect data on what shoppers have purchased. And it doesn’t collect any personal details associated with the ID, like the user’s name or phone number. That information is fiercely protected by mobile carriers, and often can be legally obtained only through a court order.
Ars Technica and Forbes both wrote critically the tracking — how it is possibly illegal and how violating customers’ privacy by tracking them is bad for business.
The technology, from Portsmouth, England based Path Intelligence, is called Footpath. […] While Footpath uses only the signal fingerprint of the phone, it does give a fairly accurate record of where the phone has travelled through a mall. According to the editor of trade site Storefront Backtalk, Evan Schuman, the data can be paired with other sources of data, including surveillance video and point-of-sale transaction information. If they went this route, retailers would get a very detailed profile of who’s carrying each phone.
“Some malls are even using facial recognition software,” Schuman told Ars Technica in a phone interview, with the primary purpose of “loss prevention”—identifying shoplifters. But that data, he said, could be tied to location data to be turned into customer relationship management data. […]
There’s just one problem with this type of detailed tracking: it’s technically illegal, according to Mark Rasch, the director of cybersecurity at CSC. Thanks to court interpretations of provisions in the USA PATRIOT Act, he said in a recent blog, devices that measure cell phones’ signal strength could be considered to be “pen registers”—monitoring devices that require a warrant.
“Although this mall technology might not identify specific individuals, it raises a bunch of privacy red flags,” he wrote. “First, the instant the consumer identifies himself or herself anywhere in the mall (say, by using a credit or debit card to buy something), it is a trivial task to cross reference the cell phone data with the payment data and realize that the person hanging around outside the Victoria’s Secret dressing room was your 70-year-old neighbor.” […]
So far, however, there’s been no sign that the legality of the service will be tested in court. And retailers could conceivably use the same justification for the technology that they use for facial recognition software: “loss prevention.” In many jurisdictions, real estate owners are given wide latitudes about what they monitor on their own premises.
But to track how many visits one makes to Macy’s or Victoria’s Secret or the food court or worse, the bathroom, in a shopping jaunt is downright creepy to many.
Thing is, retailers probably are doing this to improve the shopping experience. Also, there is precedence for such tracking in the industry already.
The New York Times ran an eye-opening piece last year on how many stores use video cameras, motion detectors and other sensors – some hidden, some overt – to study consumers for behavior, shopping and product preferences and other insights. The data might be used to determine, for instance, whether a particular aisle is too dark or cumbersome or whether products are placed too or too low. […]
Still, [the tracking of customers] is not a good idea for a couple of reasons.
1. It really is creepy.
2. And smacks of being illegal. Not that I am suggesting it is, but I can’t help but think of the U.S. Supreme Court case, United States v. Jones, for which attorneys just made oral arguments. The case involves Antoine Jones, a former Washington, DC nightclub owner who is serving a life sentence for cocaine trafficking, who was convicted in part on evidence gathered when police put a GPS device on his Jeep and tracked his movements for a month. Justice Sonia Sotomayor brought up cell phones in her questioning. “Your theory is that as long as you’re monitoring someone in public, it’s reasonable for you to use their possessions to track them,” is what she said. Again, the situations are different and I am sure, given that stores are private property and considered public places, that tracking people in them is legal. But something’s just wrong when a sales tactic brings to mind a Fourth Amendment case pending before the Supreme Court. […]
4. There will be a backlash. There was when it was discovered that Google and Apple devices had tracking capabilities, and let’s face it, there are few companies out there that are big enough to risk customer defections as Google and Apple did. Or for that matter, few retailers that invoke feelings of loyalty, like Apple does.