Even Brick-and-Mortar Stores Are Tracking You While You Shop

Warby Parker glasses, via Wikimedia Commons

Even though the popularity of e-commerce sites like Amazon and eBay is skyrocketing, nearly 90 percent of people would still rather shop in good old fashioned brick-and-mortar stores. Enjoy it while you can, folks. The line between the physical and online retail experience is quickly blurring.

Brick-and-mortar retailers are desperate for more data on consumer shopping habits, something e-commerce sites have in droves. To even the playing field, companies are turning to the latest surveillance technology to monitor customers as they shop, including tracking the wi-fi signals of customers’ cell phones to see how they move around the store.

That means a growing number of stores are actually watching you while you shop. Businesses are tracking customers, compiling the information, and analyzing the data to provide a more personalized shopping experience, the New York Times reported today. These new technologies are being used by several retailers, from big chains like Nordstrom to specialty shops like Warby Parker.

This practice is getting more common—an ABI Research report predicts “alternative” location technologies will be an $8 billion by 2017. And as the technologies advance, companies are learning a lot about their customers.

Surveillance cameras have been used to deter theft in shop for years, but now, sophisticated cameras can analyze information like how many people are in the store, what gender, are they children or adults. Some cameras can collect data through facial recognition technology, even monitor customers’ mood. “Smart mannequins” have little cameras for eyes.

Some startups make software that tracks customer movement through the wi-fi signal on people’s smartphones. Not all of us are glued to a device that’s connected to the web, but even walking around a physical store with one in your pocket can still leave a trail of digital breadcrumbs.

That’s the creepiest part about this big brother browsing. It’s one thing for stores to use aggregate data to detect patterns, like how long people browse, what time of day, and use that to determine store layouts and products. It’s quite another thing if they know exactly who you are when you walk in the door.

It’s possible. Customers have been giving out their personal info at checkout counter for years. But now, that info can be linked with your name, and the company can connect it with your online identity. Credit card companies have even started selling anonymous aggregated customer transaction data to retailers. 

This information can be used to tailor marketing strategies. What else are retailers doing with your personal data? Selling it to other companies? To advertisers?

“The vision everyone has for this technology is that you walk in front of the soda. And then Coke and Pepsi in the background are going to bid up to see who can send you that coupon,” Bryan Wargo, co-founder of the startup Nearbuy Systems, told NPR.

For the most part, the customer reaction hasn’t been good. People find it creepy. It seems illogical that consumers are freaked out by being tracked in the real world, but willing to throw the privacy baby out with the bath water online—which is the argument retailers are making.

Part of the reason for the double standard is customers like the personalized experience they get in return for their data, an feel it’s a fair trade. Another part of the reason is the lack of transparency when it comes to physical shops’ tracking methods.

“People understand there are cameras in stores to prevent shoplifting, and they know that if they use credit or reward cards their information is collected. But that’s voluntary. This technology is not,” said Electronic Frontier Foundation spokesman Dave Maass to Infoworld.

Are stores alerting customers of their surveillance practices when they walk in the door? Are they gathering data without explicit permission? Do customers understand that the combination of a camera on the wall, and that one time you gave Sears your email address, can mean a store has a full customer profile on you? I’m guessing no.

Future brick-and-mortar shops could essentially simulate the Amazon experience, on the ground.  If a store knows who you are when you walk through the door, they can cater the shopping experience directly to you, through coupons based on your interest popping up on your phone, or sales associates armed with a profile of your habits.

It’s that personalized experience the e-commerce companies have mastered. Do we really want that out in the real world?