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Wednesday, July 24, 2013

As invasive in-store tracking technology becomes more common, companies attempt to self-regulate

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Madison Ruppert

A little-known industry built around tracking customers in and around physical stores has grown considerably over recent years and now the industry is supposedly going to regulate itself amidst privacy concerns.

Companies and the technologies they use are quite diverse, ranging from facial recognition cameras in mannequins to systems that track signals from Wi-Fi enabled smartphones.

The latter technology is used by a company called Euclid which bills itself as “Google Analytics for the physical world.”

If Wi-Fi is turned on, Euclid can collect information including the presence of the phone, the MAC address, the phone’s manufacturer, the signal strength, and the name of the Wi-Fi network it is connected to (if applicable), according to the company’s privacy statement.

While the company says they don’t capture personal information or real-world identity, they are able to produce some quite amazing information for their customers.

Some of the products they offer include: capture rate, which tells customers how well window displays bring shoppers into the store; repeat visitor ratio; measures of how many customers walk by the front door; visit duration, including if they spend their time waiting in line or engaging with staff; visit frequency and time between visits and engagements and bounce rates along with engagement and bounce rates.

Your phone does not need to be connected to the store’s network to gather such information, they only need your Wi-Fi antenna to be turned on.

One company, RetailNext, is able to use a store’s Wi-Fi network to pinpoint where a shopper is in the store within a 10-foot radius, according to Tim Callan, the company’s chief marketing officer.

Megan Garber, writing for the Atlantic, points out that physical stores can gather the following information about you when you visit: age, gender, mood, time spent in each section of the store, the items you looked at, how long you looked at items before purchasing, the products you looked up on the store’s website, purchase history, number of recent visits and average time between visits.

It might seem hard to believe that a store could know your mood, but it is indeed quite possible.

“Through video of your movements through the store, and images of your facial expressions as you do that moving, and facial recognition software that analyzes those expressions, stores are attempting to recreate in the physical world the paths of digital breadcrumbs customers leave as they explore websites,” Garber writes.

NEC IT Solutions has also exploited facial recognition technology, although they use a database of celebrities and valued customers to identify incoming customers as VIPs.

The program sends an alert to staff via computer, iPad or smartphone, according to NPR, while also supplying details like the customer’s favorite buys, shopping history and dress size.

Obviously there has been a great deal of concern about the privacy implications of this type of technology on the part of customers.

Indeed, as an article in the Economist points out, “because most Wi-Fi devices broadcast a list of known networks, a monitoring system could, in theory, collect the list and match it against databases of known Wi-Fi networks, which are used as a rough and ready alternative to satellite positioning in built-up areas. Shoppers’ stored list of connections could thus reveal where they live or work, and possibly their identities.”

Indeed, Nordstrom stopped using Euclid after customers responded negatively when signs were placed in stores telling customers that they were being tracked.

The companies have come together to create industry “best practices” for privacy controls in what is clearly an attempt to defend the industry against public criticism.

Companies like Euclid, WirelessWerx, Mexia Interactive and ShopperTrak are working with the Future of Privacy Forum (FPF) to develop the best practices.

Unfortunately, the Future of Privacy Forum is, as Jathan Sadowski points out for Future Tense, “primarily underwritten by corporate money, much of which originates from the tech sector—Facebook and Google are listed.”

Furthermore, “Companies that use in-store tracking services, such as Nordstrom and other big box department stores, are also supporters,” Sadowski writes, noting that Euclid is a donor.

Jules Polonetsky, the director of FPF, told Sadowski that they “are often more optimistic about the positive values of smart data use than some [advocacy groups] who may be more skeptical of industry promises.”

Yet Polonetsky also claims that FPF promotes positions that some of their donors do not agree with, like Do Not Track. Personally, it seems that companies aren’t quite dumb enough to spend money on a group that is actively working against their interests.

The problem is that even if FPF can be considered credible, something which I think is far from certain, self-regulation doesn’t have a bright history.

Sadowski points out a 2005 report by the Electronic Privacy Information Center (EPIC) which drives the point home.

Even the title of the report, “Privacy Self Regulation: A Decade of Disappointment,” makes the reality of the situation clear.

2012 report produced by the Federal Trade Commission (FTC) reinforced this perspective bycalling for Congress to “consider enacting baseline privacy legislation” since “self-regulation has not gone far enough.”

“Self-regulation in its purest form is a recipe for disaster. There are simply too many incentives to violate privacy interests and too little transparency to know what’s going on,” said Woodrow Hartzog, privacy lawyer at Samford University, according to Sadowski.

Hartzog, who is also an affiliate scholar at Stanford’s Center for Internet and Society, contends that truly robust privacy protections require a “patchwork of regulation, [consumer] education, and organizational responsibility.”

Until that patchwork is put in place, you probably can’t expect any meaningful degree of privacy while shopping.

I’d love to hear your opinion, take a look at your story tips and even your original writing if you would like to get it published. I am also available for interviews on radio, television or any other format. Please email me at

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This article first appeared at End the Lie.

Madison Ruppert is the Editor and Owner-Operator of the alternative news and analysis database End The Lie and has no affiliation with any NGO, political party, economic school, or other organization/cause. He is available for podcast and radio interviews. Madison also now has his own radio show on UCYTV Monday nights 7 PM - 9 PM PT/10 PM - 12 AM ET. Show page link here:http://UCY.TV/EndtheLie. If you have questions, comments, or corrections feel free to contact him at

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