When you walk into a brick and mortar retail store like a Nordstrom, Cabela, or even Family Dollar, you're being tracked around the store. Not by an over-suspicious security guard, but by the store's wireless network, using your phone's Wi-Fi. The store then uses your phone to track you around the store, determine if you're a repeat visitor, see what departments you visit, and more. Here's how they do it, and how to stop them.
The New York Times broke the story earlier this week that a number of retail stores are either experimenting with or actively using technology that uses your phone's Wi-Fi to track your movements around the store. We're not talking about location within a few meters either—we're talking about exact location.
Nordstrom, the store that the New York Times focuses on in its piece (although it's not the only one doing this) installed sensors around some of its stores that would scan for smartphones with Wi-Fi turned on and scanning for networks. The sensors would then make note of the device'sMAC address (an address that's unique to your phone) and use it to identify and follow the device as it moves about the store. Information about how frequently that MAC address visits the store, which departments it visits when it's in the store, how long it stays in each department, and how long it stays in the store. Granted, you are not your phone's MAC address, but if you carry your phone with you all the time, you may as well be. As the NYT explains:
Nordstrom’s experiment is part of a movement by retailers to gather data about in-store shoppers’ behavior and moods, using video surveillance and signals from their cellphones and apps to learn information as varied as their sex, how many minutes they spend in the candy aisle and how long they look at merchandise before buying it.
All sorts of retailers — including national chains, like Family Dollar, Cabela’s and Mothercare, a British company, and specialty stores like Benetton and Warby Parker — are testing these technologies and using them to decide on matters like changing store layouts and offering customized coupons.
Combined with in-store cameras, those sensors can do an impressive job of following an individual around the store, examining what they're looking at, and how they react to the products they consider. The video at above is from the New York Times' article on the topic, and shows you how closely the system can monitor an individual's movements. The video below, from Revision3's TechFeed news program, also does a great job of walking you through the technology and how accurate it can actually be.
The Data Stores Collect, and What They Use the Data For
Since the surveillance system varies from store to store, the amount of information each retailer collects can vary. However, most stores use your phone's MAC address to identify you, and records when you enter and leave a store, where you go inside the store, and how long you pause to inspect specific products, aisles, and counters. Combined with video surveillance, those stores also collect your gender and demographics (ethnicity/general age/anything that can be determined visually), differentiate children from adults, note specific products you looked at and how long you looked at them, and so on.
Privacy advocates point out that this is an incredible amount of data, much of it personal, that stores are collecting on their shoppers without telling those shoppers they're being monitored. For their part, retailers say it's nothing more than customers give up when they shop online, and when you're out shopping, you're in public—which means you should have no expectation of privacy. The companies involved also say the information is anonymous and aggregate, but it's difficult to call a video of a person walking around a store truly "anonymous." They don't shy away from the potential personal benefits they can offer thanks to the data collection, though:
Cameras have become so sophisticated, with sharper lenses and data-processing, that companies can analyze what shoppers are looking at, and even what their mood is.
For example, Realeyes, based in London, which analyzes facial cues for responses to online ads, monitors shoppers’ so-called happiness levels in stores and their reactions at the register. Synqera, a start-up in St. Petersburg, Russia, is selling software for checkout devices or computers that tailors marketing messages to a customer’s gender, age and mood, measured by facial recognition.
“If you are an angry man of 30, and it is Friday evening, it may offer you a bottle of whiskey,” said Ekaterina Savchenko, the company’s head of marketing.
Other retailers promise that eventually you'll be able to get Minority Report-style product recommendations as soon as you walk into a store, because the store will recognize you by name, purchase history, and regular visiting habits:
Nomi, of New York, uses Wi-Fi to track customers’ behavior in a store, but goes one step further by matching a phone with an individual.
When a shopper has volunteered some personal information, either by downloading a retailer’s app or providing an e-mail address when using in-store Wi-Fi, Nomi pulls up a profile of that customer — the number of recent visits, what products that customer was looking at on the Web site last night, purchase history. The store then has access to that profile.
“I walk into Macy’s, Macy’s knows that I just entered the store, and they’re able to give me a personalized recommendation through my phone the moment I enter the store,” said Corey Capasso, Nomi’s president. “It’s literally bringing the Amazon experience into the store.”
So there are benefits and drawbacks. As with any technology, it could be used to help you score a bargain or get the best price on something, or to reward your loyalty for shopping at your favorite stores. It could even be used to help brick and mortar retailers combat "showrooming," where people visit retail stores to check prices and look at items they want before going home to buy them online, usually for less.
The most interesting part of the controversy is that when Nordstrom started the program, they didn't alert customers that they were doing it. When they did respond to critics and posted a sign advising customers to turn off Wi-Fi on their smartphones or tablets when they entered the store if they didn't want to be part of the program, consumers bristled. Part of it was surprise over the sheer amount of data the stores are collecting, and part of it was that it seemed to beopt-out instead of opt-in, forcing them to do something if they don't want to be tracked—not like signing up for a loyalty card or service, where you agree to trade information for specific benefits.
Want to Opt-Out? Turn Off Wi-Fi When You Leave the House
This controversy isn't likely to die down anytime soon, but if all of this cell phone tracking makes you uncomfortable, there's a simple answer: Turn off Wi-Fi on your phone when you go shopping, or turn your phone off entirely.
If your phone is using mobile data, these systems can't connect to your device to track it, so turning off Wi-Fi is a good option if you still want to be able to use your phone while you shop. The only surefire way to make sure no one's tracking you though is to turn off your phone entirely. That doesn't get you out of video surveillance (which most stores make it clear you're opting into when you walk in anyway), but it does get you out of these programs if you want out.
On the other hand, if the kinds of improvements and loyalty rewards that retailers like Nordstrom are promising they'll offer with this data, you can simply do nothing and stay opted in. Between everyone tracking you online and the government collecting tons of data on you, it may not be surprising—or worrying to some—that companies want to extend their data collection to meatspace as well as the digital world.
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