For the past couple of decades, firms such as Shoppertrak and Nomi have been tracking and analyzing shoppers as they move through retail outlets, using technology such as video cameras and break beams to understand how many people enter a store, where they go and what they do. Now these established firms and newer competitors, such as Euclid Analytics, are taking advantage of mobile phone technology to gather shopper data.
Consumer researchers use the signals that mobile phones use for ordinary functions, such as connecting to WiFi networks or Bluetooth devices, to detect and count shoppers. If you walk into stores carrying a mobile phone with WiFi or Bluetooth enabled, even if you’re not actually using those functions, the device can be detected and counted. (Shopping is not the only application; at John F. Kennedy Airport, security line wait times are estimated using mobile phone detection technology from Blip Systems.)
Bernard Marr’s recent article, “Big Data: Too Many Answers, Not Enough Questions”, describes how he used mobile tracking to help a client understand some basics about shopper behavior in retail stores. I asked Marr why he chose this approach. He explained, “It was cheap and easy to install, gave us continuous live data streams, and had the least security and data protection issues.” Marr uses video for other clients, but video was too expensive for that particular client’s budget. The privacy and data management requirements for video were also more demanding than the mobile signal detection service, which collected the number of individuals, but no other information about them.
From an analytics standpoint, this technology is appealing. It’s subtle: it doesn’t interfere with consumer behavior and isn’t noticeable. It’s powerful, since signals can be detected throughout and even outside a store. And it’s cost-effective, a less expensive alternative than video. So mobile tracking can provide a rich resource of consumer behavior data.
Still, all data gathering raises questions about proper data management, legal obligations and privacy protection. For starters, there’s the most basic question: is it legal to detect mobile phone signals? Jesse Woo, Principal at the Law Office of Jesse Woo, says, “In the US, there is very little comprehensive regulation of privacy and data collection by non-governmental entities. Most of the information you could collect … is unregulated.” Woo points out that the law does set some limits. “One limit is that you cannot collect the contents of phone communication because you risk violating wiretapping laws.”
How will consumers react when they are aware of mobile phone detection? Josh King, General Counsel & Vice President of Business Development at legal services marketplace Avvo says, “Mobile phone signal detection, for marketing measurements and the like, is one of those things that sounds Orwellian and privacy-impacting, but is in reality far more innocuous.” His take on privacy? “Unless such a monitoring system were hacked into a wireless carrier’s database (something that is both very illegal and highly technically difficult), it can’t identify the individual users, much less the actual content of communications.”
Still, don’t assume that because a mobile signal itself does not identify and individual, it can’t pose any privacy issues. One often neglected data protection concern is the risk that, by combining data sources, you may (intentionally or not) create personally identifying information, which in turn requires special handling and protection. Paul Lanois, an attorney admitted to the New York Bar and the Paris (France) Bar who publishes articles on technology law and privacy, explains “if enough data can be tied to an identifier over the course of time, then it would be possible of course to identify the user of the device.”
What’s more, even though the law does not require it, consumers may expect an opt-out. In fact, some vendors offer this already, although the burden is on the consumer to be aware and take action to opt-out. Jesse Woo explains, “An important concern for retailers is to actually follow through on any opt-out provisions that they offer to consumers. You do not have to offer an opt-out, but if you do then you had better abide by it. The Federal Trade Commission recently entered a consent decree with Nomi … on just this issue. There, it wasn't the tracking that was the problem but the fact that some retailers did not allow consumers to opt-out despite what Nomi had promised.”
In an era of heightened consumer awareness of data collection and privacy, retailers should not neglect to offer the option to opt-out, and to respect that obligation. But consumers with concerns can always use another approach to opt-out: WiFi and Bluetooth can be turned off.
