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The New Pickpockets: Retail Sensors and Other Tracking Systems

Customer Experience, The New Pickpockets: Retail Sensors and Other Tracking SystemsShoppers by Noreen SeebacherThe days when a phone was simply used to place calls are long gone. (A study last year noted calling is one of the last things we do with smartphones, ranking far behind activities like web browsing and social networking.) But odds are most people don't think of their smartphones as tracking devices.

In this final installment of our three part series on the loss of privacy in a big data world, we'll explore the secret life of smartphones.

Smartphones as Tracking Devices

Smartphones with Wi-Fi enabled periodically transmit Wi-Fi messages, even when not associated to a network. That makes them excellent devices for tracking your shopping route, a fact that has not gone unnoticed by retailers and malls. 

Tracking systems can identify individual shoppers by monitoring one of two things: a phone’s International Mobile Subscriber Identity number (The number constantly transmitted from all cell phones to their service providers. However, to reduce eavesdroppers, the IMSI is sent as rarely as possible and a randomly-generated TMSI is sent instead.) or the Media Access Control (MAC) address (transmitted when the device’s Wi-Fi is enabled, which is the default setting on most devices).

But it goes deeper. In a paper published last month in the International Symposium on Research in Grey-Hat Hacking, researcher Mathieu Cunche noted that the MAC address of the devices could be collected and used to uniquely identify mobile devices. He continued:

A device with a Wi-Fi interface turned-on acts as an actual wireless beacon by periodically advertising in clear a unique identifier. This is also true for other technologies such as GSM and Bluetooth that periodically send in clear a unique identifier (MAC address for Bluetooth and TMSI for the GSM) … Thanks to those wireless beacons that we are carrying in our pockets, Radio Frequency (RF) tracking is now possible."

In London, a company called Renew programmed "smart" trash bins to record the unique addresses of smartphones carried by pedestrians. People were unnerved, Bryan Pearson, CEO of Loyalty One, wrote in a blog post:

No one was notified, and there was no way for people to know that their personal data was being collected. But in one day, a small number of those bins collected data from more than a million devices. Renew since discontinued the tracking, but that won’t stop the technology."

Retail Interest

More and more retailers, from Nordstrom and Benetton to Family Dollar and Cabela's, are experimenting with technology that lets them track customers' movements by their cellphones as they make their way through their stores.

In theory, the in-store tracking isn't much different than the data mining online retailers do with shoppers' search and spending habits. The only difference: Instead of analyzing keystrokes and search history, some brick and mortar retailers monitor shoppers' moves throughout the store by following their smartphones' Wi-Fi signals.

The data about in-store customers can be used to create “heat maps” that glow red to show the spots with the most foot traffic or prompt management to reassign staff to busy areas of the store. But as Consumer Reports noted in an article earlier this year — and recent research confirms — these systems can also identify individual shoppers by monitoring IMSI or MAC addresses. Those phone IDs lets stores know when you shop, not just today but also every day your ID signal comes back in range.

Turn Off Your Phone

Euclid Analytics is one of the companies helping brick-and-mortar stores analyze foot-traffic by sensing smartphones. Euclid claims this anonymous foot-traffic analysis helps retailers improve store layouts, time promotions and sales, measure marketing effectiveness, even determine staffing levels and store hours. It also provides aggregate data that can be used to gauge things like the health of the economy and consumer confidence.

Just today, for example, Euclid released its US Retail Benchmarks for October, based on data from 20 million domestic shopping sessions nationwide. Traffic in October, defined as the number of devices detected by Euclid sensors at retail locations, decreased 4.5 percent compared to the previous month. October traffic was also down 3.8 percent compared to the same month last year.


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