Stores are spying on customers and it's worse than you imagined
When Nordstrom started testing new technology that allowed it to track customers’ movements by following the Wi-Fi signals from their smartphones.It sparked outrage across the U. S.
"I feel like it's an invasion of my privacy," Jill White, a shopper at Cherry Creek Mall told CALL7 Investigator Keli Rabon.
"If it was without my consent I would be really bothered by it," said another shopper.
"I think it's outrageous," said John Soma, executive director of University of Denver's Privacy Foundation. "What are they going to do with that data? Are they going to keep it forever? Are they going to aggregate it? Are they going to sell it to 'affiliates?' We just don't know. That's what's so troubling to me."
Nordstrom ended the experiment in May, because of customers reactions.
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 , Home Depot 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.
The Famous Footwear chain draws on security footage to help managers place promotions in the optimal spot. And American Apparel employs surveillance analytics to arrange colorful clothing displays to capture the most shopper attention.
In less than three years, Pointer Media Network has become a behemoth in the world of consumer tracking. The company claims to monitor 76% of American households to learn what people buy, so it can sell this information to retailers hawking their products. Pointer Media has amassed such a wide reach through shopper IDs and customer loyalty cards in stores like A&P. KMart, Walgreens, Safeway, Kroger, Ralphs, Piggly Wiggly, Winn-Dixie, Fry’s and others. In any given week, the company claims to track 150 million shoppers and 250 million transactions at 250,000 checkout counters at 23,000 stores. (Target is spying on you...)
One example of how Pointer uses this information takes place at the checkout counter. When you turn over your shopper ID, a printer next to the register prints out a personalized coupon based on the history of your purchases. In its pitch to companies, Pointers says they “can pinpoint your volume buyers, identify the best targets for new products, or spot loyal customers who are about to leave your brand.”
But while consumers seem to have no problem with cookies, profiles and other online tools that let e-commerce sites know who they are and how they shop, some bristle at the physical version, at a time when government surveillance — of telephone calls, Internet activity and Postal Service deliveries — is front and center because of the leaks by Edward J. Snowden.
“Way over the line,” one consumer posted to Facebook in response to a local news story about Nordstrom’s efforts at some of its stores. Nordstrom says the counts were made anonymous.
Technology specialists, though, say the tracking is worrisome.
“The idea that you’re being stalked in a store is, I think, a bit creepy, as opposed to, it’s only a cookie — they don’t really know who I am,” said Robert Plant, a computer information systems professor at the University of Miami School of Business Administration, noting that consumers can rarely control or have access to this data.
Some consumers wonder how the information is used.
“The creepy thing isn’t the privacy violation, it’s how much they can infer,” said Bradley Voytek, a neuroscientist who had stopped in at Philz Coffee in Berkeley, Calif. Philz uses technology from Euclid Analytics, of Palo Alto, Calif., the company that worked on the Nordstrom experiment, to measure the signals between a smartphone and a Wi-Fi antenna to count how many people walk by a store and how many enter.
The security industry is the classic old boys’ network, meaning that the under-30 engineers from Prism Skylabs can’t help but stand out. (for more info. about Prism check out their blog and their webinar)
Plans are in the works for customized cameras with facial-recognition software that matches a shopper’s face to your Facebook profile through a mobile app. Using the data, brands could instantly pinpoint a shopper’s identity, then send customized promotions to your smartphone.
Redpepper, a marketing agency based in Nashville, Tenn., is among the companies trying to develop such a platform. Co-founder Tim McMullen says the company plans to conduct tests with consumer brands sometime next year. But unlike surveillance tracking, customers will have to opt in by signing up for the app. Stores won’t be able to use existing security cameras for Redpepper’s technology but must buy new equipment.
RetailNext, uses video footage to study how shoppers navigate, determining, say, that men spend only one minute in the coat department, which may help a store streamline its men’s outerwear layout. It also differentiates men from women, and children from adults.
RetailNext, adds data from shoppers’ smartphones to deduce even more specific patterns. If a shopper’s phone is set to look for Wi-Fi networks, a store that offers Wi-Fi can pinpoint where the shopper is in the store, within a 10-foot radius, even if the shopper does not connect to the network, said Tim Callan, RetailNext’s chief marketing officer.
RetailNext uses security footage to analyze some 400 million shoppers worldwide. Unlike other surveillance platforms, the company’s software integrates video tracking with outside data including weather reports and holiday promotions, to go beyond simply in-store activity.
The store can also recognize returning shoppers, because mobile devices send unique identification codes when they search for networks. That means stores can now tell how repeat customers behave and the average time between visits.
RetailNext also uses data to map customers’ paths; perhaps the shopper is 70 percent likely to go right immediately, or 14 percent likely to linger at a display, Mr. Callan said.
Brickstream uses video information to watch shoppers. The company, based near Atlanta, sells a $1,500 stereoscopic camera that separates adults from children, and counts people in different parts of a store to determine which aisles are popular and how many cash registers to open.
“Watching where people go in a store is like watching how they looked at a second or third Web page” on an online retailer, said Ralph Crabtree, Brickstream’s chief technical officer.
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.
Retailers- from small boutiques to Walmart are scrutinizing footage from security cameras to improve their marketing. Such analytics are part of a booming industry called video surveillance as a service (or VSaaS), which is expected to grow from $474 million as of 2011 to some $2.4 billion by 2017, according to MarketsandMarkets, a global market research company.
As security cameras and software have become more sophisticated, more retailers are using them to study shoppers’ movements. Thanks to technology like the Prism Skylabs software Bradley uses at The Creamery, managers don’t have to watch hours of footage. Instead, they receive written and video reports.
“Security cameras are now able to expose a wealth of sales and marketing data,” says Daniel Burrus, CEO of Burrus Research Associates, a consultancy that monitors technological advancements. Now, data can reveal slowdowns in traffic, where lines form, where and how people linger, which products are hottest, and which aisles are browsed the most and for how long.
At Walmart, an internal team is testing new ways to deploy security footage to enhance in-store marketing, according to research and surveillance specialists.
Walmart’s reluctance to get into the topic isn’t surprising. For the most part, retailers want to keep their crossover camera practices quiet. Analysts point out that surveillance footage only collects aggregate data and is not used to identify specific shoppers. And since retailers also use the footage for security, they don’t have to disclose that they’re watching shoppers via video camera or ask customers for permission to record them. “Most chains that use security cameras for marketing will downplay it so as not to offend anyone due to privacy issues,” says Cohen.
At the same time, new analytics firms attracted to the lure of “big data” are popping up like mushrooms, each with the goal of translating security footage into useful marketing metrics. While many platforms are automated, the software-outsourcing company Tategy last year founded Storegistics of Silver Springs, Md., to focus purely on human analysis, says Tategy co-founder Richard Schulte. Each night, staffers evaluate the security footage of their retail and restaurant clients. The company regularly communicates to its clients performance indicators including customer interaction with marketing displays. http://www.nytimes.com/2013/07/15/business/attention-shopper-stores-are-tracking-your-cell.html?pagewanted=all&_r=3&
http://singularityhub.com/2011/04/03/ad-network-monitors-76-of-us-knows-what-you-buy-what-you-want-2/
http://www.adweek.com/news/advertising-branding/i-spy-better-buy-144564
Target, Toys R Us spied on consumers’ computers, class action lawsuits say:
Target Corp. and Toys R Us Inc. surreptitiously installed tracking software on consumers’ computers that allowed them and other advertisers to monitor the consumers’ Internet browsing history and collect personal information, according to proposed class actions removed to Missouri federal court last week.
The companies allegedly installed so-called Flash cookies instead of normal tracking cookies on consumers’ computers any time they visited the Target or Toys R Us websites, which allowed them to access the browsing histories of any consumer every time they revisited the websites
http://www.law360.com/articles/428857/target-toys-r-us-spied-on-web-buyers-class-suits-say
Lowe's, Toys R Us fight to keep tracking suits in Federal court:
Lowe’s Home Centers Inc. and Toys R Us Inc. on Friday asked a federal judge not to remand proposed class actions accusing them of surreptitiously installing tracking software on consumers’ computers that allowed them to monitor the consumers’ Internet browsing history and collect personal information.
The two companies and others including Target Corp., Kohl’s Department Stores Inc., Old Navy LLC, RadioShack Corp. and Home Depot U.S.A. Inc., were hit recently with similar suits, all of which were removed to federal court.
http://www.law360.com/articles/438629/lowe-s-toys-r-us-fight-to-keep-tracking-suits-in-fed-court
Online marketing firm Epic spied on web users to probe their health issues:
http://www.nydailynews.com/news/national/online-firm-settles-ftc-spying-users-article-1.1215513
DesignerWare settlement: Companies agree to stop snooping on people's home computers:
Just what sort of sensitive data did these rent-to-own companies gather?
User names and passwords for email accounts, social media websites, and financial institutions
Social Security numbers
Medical records; private emails to doctors
Bank and credit card statements
Webcam pictures of children, partially undressed individuals, and intimate activities at home
http://www.theverge.com/2012/9/26/3411962/ftc-settlement-rent-to-own-pc-businesses-spying
http://www.huffingtonpost.com/2012/09/26/designerware-settlement_n_1917255.html
World Wide Web Consortium rejected a Do Not Track standard proposed by the online advertising industry:
The World Wide Web Consortium has rejected a Do Not Track standard proposed by the online advertising industry. The industry proposal would have allowed advertising companies to continue to collect data about the browsing activities of consumers, but would have limited the way companies could characterize users based on that data. The group stated that industry's proposal was "less protective of privacy and user choice than their earlier initiatives."
Carroll ISD in Southlake, TX is outfitting teachers with GPS tracking devices:
Under a pilot program, CISD has purchased 100 devices from Dallas-based eTrak. Small enough to wear on a lanyard, or even keychain, they use GPS and Wi-Fi signals to constantly track the users location, down to the very classroom they are in. When the one button on the box is pressed, it sends a panic signal to school officials and 9-1-1 operators, instantly showing them a map on phones and computers with the location of the emergency.
CISD is the first district in North Texas to use the device. The company said it is in discussions with as many as 30 more districts across the country. (warning bells should be going off across the country)
Here's how the company describes the product:
Slow response time can prolong the emergency. At the press of the eTrak Alert Button, emergency messages are instantly sent to pre-programmed recipients. Teachers can notify the administration office. The school office can notify local law enforcement, all within seconds. The eTrak Panic Alert technology sends emergency messages containing the sender's name and photo, along with their location.
It constantly tracks the user's location using GPS and Wi-Fi signals, whether they're in the classroom or sitting on a toilet. That Carroll ISD is testing the program on adult teachers, not students, makes the endeavor a bit less unsettling, but it's still raises difficult questions about privacy and the relationship between employer and employee. A position paper signed by the ACLU, the Electronic Frontiers Foundation, and more than a dozen other civil liberties groups, worries that using tracking devices in schools violates civil liberties and dehumanizes wearers, pointing out that the same technology is used to track livestock.http://dfw.cbslocal.com/2013/07/10/safer-schools-with-the-push-of-a-button/
Northside Independent school district have announced their decision to stop using a student tracking program:
“This decision by Texas school officials to end the student locator program is proof that change is possible if Americans care enough to take a stand and make their discontent heard,” said constitutional attorney John W. Whitehead, president of The Rutherford Institute and author of A Government of Wolves: The Emerging American Police State. “As Andrea Hernandez and her family showed, the best way to ensure that your government officials hear you is by never giving up, never backing down, and never remaining silent—even when things seem hopeless.”
In 2012, the Northside Independent School District in San Antonio, Texas, launched a program, the “Student Locator Project,” aimed ostensibly at increasing public funding for the district by increasing student attendance rates. As part of the pilot program, roughly 4,200 students at Jay High School and Jones Middle School were required to wear “SmartID” card badges embedded with an RFID tracking chip which made it possible for school officials to track students’ whereabouts on campus at all times. School officials hoped to expand the program to the district’s 112 schools. For 15-year-old Andrea Hernandez, a Christian, the badges pose a significant religious freedom concern in addition to the obvious privacy issues. In response to her requests to opt out of the program and use chipless badges, Hernandez was informed that “there will be consequences for refusal to wear an ID card.” For example, students who refused to take part in the ID program were not able to access essential services like the cafeteria and library, nor would they be able to purchase tickets to extracurricular activities. According to Hernandez, teachers were even requiring students to wear the IDs to use the bathroom.
The Rutherford Institute attorneys alleged that the school’s attempts to penalize, discriminate and retaliate against Andrea violated her rights under the First and Fourteenth Amendments to the U.S. Constitution. Although a district court judge for Bexar County, Texas, granted The Rutherford Institute’s request for a temporary restraining order to prevent NISD from expelling Hernandez based on her objections to the tracking badge, both the Fifth Circuit Court of Appeals and the Western District of Texas denied her accommodation, with the Western District judge ruling against the sophomore on the grounds that her objections were “not grounded in her religious beliefs” and were a “secular choice rather than a religious concern.” Whitehead pointed out, the ruling not only was “a sad statement on our nation’s growing intolerance for dissent and for those whose religious beliefs may differ from the mainstream” but it sent a clear message that it’s more important for the schools to make money than for individual freedoms to be respected.
https://www.rutherford.org/publications_resources/on_the_front_lines/victory_san_antonio_public_school_officials_end_rfid_tracking_program_citin