In-Store Tracking Gets More Media Notice, So Retailers Need To Boost Their Transparency

Retailers are getting increased attention for their efforts to track customers in-store in the wake of revelations about widespread Internet snooping by the National Security Agency.

A front-page New York Times story on Monday (July 15) cited a now-discontinued trial by Nordstrom (NYSE:JWN) to count customers entering and leaving some stores by means of their WiFi signals, along with similar technology used by national chains Family Dollar (NYSE:FDO) and Cabela's (NYSE:CAB) and even a small coffee shop in Berkeley, Calif. Some of the efforts use smartphone signals, while others use images from security cameras or a combination of the two. A few even add facial recognition to identify a customer's mood.

None of this is new. Security cameras have been used to track and identify customers for decades, and automation has been available for years to isolate and track individual customers inside a store from digitized camera footage. Store associates and loss-prevention guards have been doing the same thing without cameras or computers for far longer.

But with the NSA as the scandal du jour, big chains are an easy target, while smartphones and cameras seem like familiar technology to newspaper readers. It's much harder to translate from technobabble to explain that any Amazon (NASDAQ:AMZN) customer who installs the e-commerce giant's "1 Button" web browser extension will end up sending Amazon every web address they visit, whether it's on Amazon's site or not, as one security researcher reported last week. Now that's tracking.

In practice, the renewed attention largely means retailers need to make sure they communicate their most potentially invasive customer-watching efforts. Nordstrom, for example, caught flak for tasteful but hard-to-spot signs telling customers about its WiFi-based tracking trial in the 17 stores where it ran for eight months. Clearly visible signs should help reduce shoppers' fears that they're being spied on. A specific how-to-opt-out message ("You can turn off your phone's WiFi to avoid being tracked within the store") is even better.

That won't stop associates from recognizing and personally tracking customers, or security from watching anyone who looks problematic. But at least it helps customers feel like they have a choice.

For more:

- See this New York Times story
- See this security blog

Related stories:

Nordstrom Illustrates Why Mobile May Change The Rules On Third-Parties
Nordstrom Ends Controversial Mobile Customer-Tracking Trial
Nordstrom Phone-Tracking Trial Raises Customer-Theft Threat