Mobile location analytics companies like Placed, Euclid Analytics and Nomi are using the technology in cell phones to count and track data on consumers as they shop in stores.
When cell phones search for Wi-Fi networks, they send out packets of information to connect to that network. During this connection, that data is pulled and delivered to the mobile analytic company. Once they have the information, it is analyzed and quantified for details about customer behavior. A report of the conclusions is then sent back to the retailer for marketing purposes.
With Euclid, for example, retailers have two options to start tracking customer data. First, they could use a proprietary sensor that can be attached to a Wi-Fi network. Second, the retailer uses Wi-Fi hardware from a vendor that is in partnership with Euclid.
Some of the approved vendors include: Cisco, Aruba Networks, Ruckus Wireless, and Xirrus Wi-Fi Networks.
With Placed, the shoppers actively participate in the data tracking by volunteering to install “a mobile app that measures location persistently in the background.”
Each of these companies emphasizes its individual privacy policies.
Euclid states on its website that only non-personally identifiable information is gathered. Specifically, they collect “the presence of the device, its signal strength, its manufacturer (Apple, Samsung, etc.), and a unique identifier known as its Media Access Control (MAC) address.” The MAC address does not contain personal information about the phone’s owner.
In addition, Euclid claims it also scrambles the MAC addresses collected from the cell phone data packet.
Placed requires multiple approvals from the shopper before tracking is initiated. From within the app, the shopper must “accept the app’s request for location, provide approval to share location and device data with Placed and review the terms of service and privacy policy.”
Josh King, General Counsel & Vice President of Business Development at Avvo, told Forbes: “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…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.”
Depending on the particular mobile analytic company the retail outlet has partnered with, data could be collected automatically without the cell phone owner’s knowledge.
However, privacy-centric consumers do have the ability to remove themselves from the pool of shoppers used for research. They could simply turn off the Wi-Fi on their cell phones or they could sign up for a general opt-out notification.
The retail stores that utilize these analytic companies are attempting to attain a competitive advantage. The retail reports may include information on consumer foot-traffic, popular products, and length of time shoppers are willing to wait in line.
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