The Shelf is Watching You

Imagine this scenario: A customer walks into the Gap to buy a new pair of jeans. After taking her selection to the dressing room, the pants don't quite fit. She taps on an interactive screen in the room, which tells her the sizes and styles in stock. She uses the screen to alert a sales associate to grab a different size and bring it to her, and the store makes an easy sale.Now imagine the same scenario, but with a twist: After the shopper orders a different size on the dressing room screen, loyalty database records reveal to the store that the woman has gone up a size since her last visit. As she waits for the sales associate, the interactive screen relays her purchase history to her and recommends shirts, skirts and sweaters all in similar styles and new sizes, while giving the store associate the same information.Taking it further, what if our customer eyes said jeans on the store shelf and a shelf-edge technology reads her face, alerting store personnel of her purchase history?Are these examples of invading shopper privacy or of being a helpful retailer? As new technologies such as facial recognition, RFID and heat-mapping are deployed in stores, the privacy debate heats up, and the area between improved customer experience and an invasion of privacy gets increasingly murky.Helpful or Hurtful?"My fear is that we're going to use [these technologies] irresponsibly before we get the chance to use them responsibly," says Laura Davis-Taylor, founder and principal of Retail Media Consulting in Atlanta. "We learned the hard way with a lot of media in the past."On one hand, these new technologies are intended to address consumer complaints about their retail experiences. Bill Hardgrave, executive director of the Information Technology Research Institute/RFID Research Center at the University of Arkansas in Fayetteville, AR, notes that the three biggest consumer complaints about the retail experience are items being out-of-stock, hard-to-find items and lengthy checkout lines. By using RFID as an inventory tracker, a retailer can manage at least two of those three complaints easily. "If we're doing things with RFID that address those concerns, it's more likely [the consumer is] going to be happy with it," Hardgrave says. "Retailers are trying to use this to help the customer experience, not spy on the consumer."Not so, says Katherine Albrecht, founder and director of Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN) and author of the anti-RFID book, Spychips. Calling the programs "sinister" and akin to "espionage," Albrecht says the programs -- including, but not limited to, RFID -- are collecting too much information about consumers and using it without their knowledge. "We consumers have no way of knowing if [these programs] are being deployed; they're meant to be secret," she says. "If you can't tell people you're doing it, you shouldn't be doing it at all." Of course, there's some debate about what is and what isn't out there. "There's a lot of information -- on both the good side and the bad side -- going on out there," says Davis-Taylor. On one side of the issue, creators of these technologies tout them as being more capable than they are, which, in turn, is making people more concerned about what they really do, she says. Take RFID. Even Hardgrave admits the hype is greater than the reality. That commercial where an IBM worker tells a truck it's going the wrong way in the middle of the desert? Nowhere close to reality. Most RFID tags are passive tags, which require a reader in close proximity to register them. While "active" tags that send a signal to a reader do exist, they're far too expensive to put on general store inventory, Hardgrave says. "There's just not enough information on a passive RFID tag" to invade a consumer's privacy, he says.But it's easy to understand why privacy advocates are concerned. Mention the phrase "facial recognition software" and many people imagine being cross-matched against all kinds of databases just for buying a pack of gum. But according to George Murphy, CEO of TruMedia in Tampa, FL, which makes identification software that breaks down people by age range and gender to run targeted checkout ads, granular identification of an individual isn't worth the cost, particularly from a media standpoint. "What agencies want and what advertisers want is the demographic," he says. "They don't want the individual; that's not the way they purchase media."Then there are loyalty cards. While such cards have been around for years, privacy advocates fear newer technologies raise the possibility of marrying the data to further identify a specific person in a store. "I think most people don't like being lab rats in people's grand experiments," says CASPIAN's Albrecht. "In the course of going about our daily lives, we're subject to surveillance and manipulation that we don't even know is going on."Albrecht is even more concerned about this when -- according to her research -- 70% of people who have loyalty cards are unaware that the retailer is keeping a record of purchases tied to that card. "You can't argue that people are knowingly trading their privacy for discounts," she says. But in the case of loyalty cards, consumers generally sign a form or waiver that includes fine print about how that data will be used. While Albrecht calls this "inadvertent consent" (rather than informed consent), it is still consent nonetheless, and nearly everyone -- from privacy advocates to technology developers -- says the industry needs to address the issue of consent sooner rather than later. "It behooves many of the people in this industry that they have [an industrywide] privacy policy," says Jeff Collard, president of Concord, Ontario-based Omnivex, which creates digital signage and targeting software.Tell ConsumersNearly everyone admits privacy is an issue the industry needs to address as technology improves. However, the industry is still grappling with measurement and accountability, both of which are taking precedence over privacy. "It's obviously something that's talked about a lot," says Suzanne Alecia, president of the Out-of-Home Video Advertising Bureau, New York. "But it's more of a down-the-road focus for us."Alexandria, Va.-based POPAI has begun its own review of how privacy should be protected as new technologies are being developed. "We're taking a look at creating self-regulatory guidelines that would be monitored on a regular basis," says CEO Dick Blatt.Exactly what form those privacy policies should take, however, is still up for debate. Some, like Hardgrave, feel that posting a sign informing consumers their purchases may be tracked and used for inventory management purposes could be sufficient, though others said that might not be enough. "People don't read the service agreement when they install software," says Bill Gerba, CEO of Wirespring Technology, Fort Lauderdale, FL, which makes digital signage hardware and software. He is an outspoken proponent of the need for privacy guidelines. "They're not going to read through 20 pages of legalese before walking into a Kroger."Others say it's not enough to give consumers the option to opt in -- they have to be able to actively opt out as well. MediaCart, which puts screens on shopping carts and helps direct people around stores, gives shoppers the clear option to turn the machine off if they don't want to use it, says David Brice, CEO of the Plano, TX, company. "If you don't want to use it, you don't," Brice says of the device. "You have to address the everyday fears, even if they're not going to be realized."It's possible that technology itself could iron out some of these privacy issues, for instance, disabling an RFID tag as it leaves a store. Or, a database could be established where consumers can set their own privacy settings, as Davis-Taylor says is happening. But there's still the possibility that something could happen -- the hacking of personal information via a loyalty card program, for instance -- before those solutions are developed, pushing the issue to the forefront of the public's consciousness. "My concern is we're going to wake up one day and some catastrophe will have happened and the lawmakers will get involved," says Gerba.So far, there hasn't been anything to push it to the forefront. There have been no catastrophic leaks of information. And legally, most retailers are still on solid ground when it comes to marketing surveillance, says Daniel Kotchen, a partner with Kotchen & Low in Washington, D.C. While Kotchen says retailers have a duty to inform consumers about how they intend to use the data, he adds that it would be difficult for a consumer to mount a successful legal challenge at this point in time. "It's akin to [security] videotaping in stores," Kotchen says. "Retailers do it all the time, and consumers generally know it's going on.""There's a huge difference between a security camera to have in case of a shoplifting incident," says CASPIAN's Albrecht, "then there is following the woman with the red dress around the store to find out how she shopped."Either way, what's legally defensible is not necessarily morally acceptable. As Hardgrave points out, no retailer wants to willingly alienate its customer base. Instead, the retailer needs to ensure consumers are not offended by the technologies the retailer may be using. "There's a trust implied here, and you have to respect it," says Omnivex's Collard. "Part of it is a 'buyer-beware' issue, but part of it is a trust issue."One of the ways to keep that trust is to be open and honest. "If you put something in there and didn't tell consumers, that's when it would breed suspicion," Hardgrave says. "The more transparent you are with it, the less problems consumers have with it."And eventually, they'll understand the programs' advantages and disadvantages and, hopefully, become more accepting of both. "The whole [retail] experience is a consumer experience," says MediaCart's Brice. "The actual market will establish acceptance."

The Shelf is Watching You

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