If Face Recognition Can Spot Celebrities, Why Not Loyalty Customers?

A handful of high-end retailers in the U.S., U.K. and the Far East are testing face-recognition software to spot when celebrities enter a store, according to NPR.

No specific stores have been identified that are piloting the system from NEC, which grabs video footage of a customer's face as he or she walks in the door, takes measurements and then checks a database for a match, which in turn alerts associates to the VIP's identity along with shopping history and preferences. NEC has previously sold a similar system to security agencies for spotting terrorists and criminals.

The system reportedly works even when customers are wearing sunglasses, hats or scarves and despite facial hair, aging or changes in weight or hair color.

Marketing consultant Manolo Almagro of TPN told NPR that the system isn't new and isn't cost-effective. "There are so many easier ways to use things like a mobile phone, which everyone already has, in a retail location and do the same thing and actually get more information," he said.

Most retail chains would probably disagree. To successfully spot celebrities, the system has to check everyone who walks through the door, which means it can just as easily be used for all loyalty customers that the retailer has photographs of. Mobile-based customer spotting depends on customers having their phones (and sometimes Wi-Fi) turned on. Most customers can't successfully turn off their faces.

Another mobile issue is privacy—and every retailer that has gone public with mobile-based tests, has had to deal with customer concerns to some degree. (Contrary to the current media myth, Nordstrom (NYSE:JWN) didn't suddenly shut its recent ID-by-mobile trial down because of massive customer outcry—the trial did get some complaints, but it was noticed by the media in February and eventually wrapped up in May.)

Aside from bad publicity, a patchwork of overlapping privacy laws limit which mobile phone signals a retailer can tap. But security cameras are already omnipresent in retail stores and malls, so using images from those cameras is less surprising to customers.

Some of the uneasiness of customers over ID-by-mobile may be less about the identification itself and more about the fear that retailers will listen in on phone calls or get access to other information on the phone. Simple face recognition avoids that fear. And given that identifying a customer by sight is something shopkeepers have been doing since before there were mobile phones or security cameras, visually based customer ID is probably the least likely approach to create a significant customer backlash.

For more:

- See this NPR story

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