Silicon Valley Coffee Shop Stops Tracking Customers After Backlash

Kate Patrick Contributor
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After a May 2014 San Francisco Appeal article criticized a San Francisco coffee shop for tracking its customers via smartphone, Philz Coffee decided to opt out of the spying business.

The shop used Euclid Analytics, a technology that “captures and records [smartphone] Wi-Fi signals for analysis.” This “analysis” tells business owners how often a customer visits and how often he returns. Euclid also sends email reports to the business with detailed data about customers’ activity.

Jacob Jaber, owner of the local coffee chain in Silicon Valley, told Forbes Magazine he didn’t consider Philz to be “spying,” but when the San Francisco Appeal condemned the shop for its use of Euclid, he felt he had no choice but to opt out.

“Data can be a great tool. You just need to let your customers know why you’re collecting it, what you’re going to do with it, and how to opt out,” Jaber said. “I don’t regret using Euclid at all. We’re always trying to improve the customer experience, it just turned out this wasn’t helping with that. We’re in Silicon Valley. We get pitched on new technologies every day.” (RELATED: House Passes Bill To Cut NSA Funding, Close ‘Backdoor’ Surveillance)

In a statement, Euclid CEO Will Smith insisted that the data aggregation is anonymous and only used to benefit customers and businesses: “We’re shoppers too, so we wanted to create a powerful product that helps retailers optimize the shopping experience, while at the same time could be proud of as consumers. We’ve built our technology from the ground up with privacy in the fore-front, and none of the information we collect can ever be traced back to an individual.”

However, even politicians are criticizing Euclid. In a letter to Smith, Democratic Minnesota Sen. Al Franken said, “I think that Americans have a fundamental right to not be tracked without their consent — especially in the real, ‘offline’ world where they are less likely to expect it.”

Other businesses — like Nordstrom — experimented with Euclid, then dropped the technology after facing similar backlash. To protect help protect its customers’ privacy, Apple is changing the way iPhones search for Wi-Fi networks. Instead of using a single address to detect Wi-Fi signals, iPhones updated to iOS 8 will use a series of random MAC addresses to find networks. This way, iPhones will become much harder to track.

But many business are still using Euclid, including Home Depot. Smartphone users can look for a “Euclid Analytics” sticker in store windows to know whether or not they will be tracked, but unfortunately Euclid also tracks passers-by outside the store. It will take a lot more than public outrage to stop businesses from tracking customer activity.

According to the New York Times, after a presentation Smith “was mobbed with bankers willing to lend him money and entrepreneurs wanting to work with his monitoring business.”

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