You are being watched. From the moment you enter the store to the moment you leave. Every step you take. Ever aisle you walk down and every item you look at. They are watching you.
The Federal Trade Commission recently unveiled the scary details of this practice. Nomi Technologies had been hired by multiple retailers to place tracking sensors around their stores. According to the FTC these sensors tracked the physical movement of more than nine million customers via their smartphones in just the first nine months of 2013.
The tracking worked like this. Nomi’s technology tracked the smartphones of customers as the device are searched for Wi-Fi signals within stores or almost anywhere the owner went. Nomi stored this information making their equipment capable of tracking the movement of people throughout its clients’ retail outlets. This tracking information could also possibly be used to track people’s shopping habits between stores. The same MAC address appearing in several different stores reveals valuable information about the person whose smartphone possesses that address. So basically you are being watched even if you are not in the store!
The FTC is not however accusing Nomi of providing any individual’s information. But the agency did accuse Nomi of tracking consumers both inside and outside of its clients’ stores. According to the FTC Nomi allegedly;
- Used the tracking information to inform its clients how many consumers passed by store entrances without entering.
- How long people remained in particular stores.
- How many people who entered a store had been in that store or other stores of the same chain within a certain period of time.
- And various other forms of tracking data.
Is this illegal? No. Retail tracking is not illegal. Many retailers use advanced methods and technologies to track customers including bionic mannequins. But the FTC took action because Nomi may not have informed, or even mislead consumers of the tracking. According to Nomi’s privacy policy consumers were supposed to be able to opt out of being tracked. The consumer could use Nomi’s website or “at any retailer using Nomi’s technology.” Nomi did provide an opt-out option on its website. But the FTC claims that at various stores using Nomi’s technology there were no disclosure notices that the technology was in use and no way for consumers to opt out.
Nomi’s settlement with the FTC was pretty favorable to the company. Nomi is prohibited from future misrepresentations. In other words they have to do a better job of informing the consumer they can opt out of this tracking. This means that much better notices must be posted at stores, and easier onsite opt-out options will be made available.
Nomi is not the only company in the consumer tracking business. And retail tracking is only going to grow more widespread over the next few years. But other stores have decided to stop tracking customers. In 2013 Nordstroms was testing a consumer tracking technology. As soon as the public discovered it Nordstrom shut the program down.
Consumers who do not wish to be tracked can change their phone setting, use airplane mode or turn off the WiFi. But politicians are becoming more aware of the tracking and have begun to take action. Although not a law, Sen. Schumer (D-NY) brokered a code of conduct aimed at companies that provide tracking technology and analytical services. The agreement was signed by eleven analytics companies such as Euclid and Path Intelligence. The agreement allows consumers to opt out of tracking at SmartStorePrivacy.org.
The Maryland State Legislature is currently mulling a bill that would require retailers to post signage about tracking at every door. However the bill stops short of requiring retailers to track only consumers who opt in. The focus of the bill is to force retailers to reveal the practice. Consumers could then choose to participate or not by turning off their smartphones or taking their business elsewhere.
Breaking It Down
Why is it your responsibility not to be followed like a common criminal? The thinking process of the consumer is completely turned upside down. Retailer’s hunger to sell you something has gotten to the point that they have to know exactly where you are in the store at all times. Oh, and they need to know where you are in other stores and when you even walk past their store. And its your responsibility to to keep this information from them? Ridiculous! Would you walk into a store that had a sign in the window saying, “We are watching you!” Probably not. That’s why Nomi did not post those signs and thus the FTC action against them however weak it was. But there needs to be a law that forces stores to post just such a sign in big obvious letters. The consumer needs to demand that the stores take more responsibility when it comes to their privacy. Tell these stores; stop watching me like a shoplifter. If you want me as a customer let me shop in peace. To the consumer I say; speak with your pocketbook.