Stores use your phone's wifi signal to track you as you shop

CREATED Nov 20, 2013

  • Print
  • Play

FORT MYERS, Fla. - Creative or invasive? A controversial new technology allows retailers to gather information about customers through their smartphones as they shop. The technology taps into shoppers' wifi signals, and can detect a shopper's location in the store, how long they spend in certain departments, and how often they visit the store.

It's a deal for marketers looking to collect information, but it's a deal-breaker for privacy advocates.

"It's just one layer of privacy after another being peeled off," said Mark Bonner, associate professor of law at Ave Maria School of Law. "The potential for abuse is gigantic."

Nordstrom and Home Depot have admitted to using or testing out the technology in the past, and a spokesperson for Family Dollar said the store is currently testing it out.  A spokesperson for Home Depot said the technology was used to track the number of customers entering the store.

Retailers install a tracking system that picks up your wifi signal as you move around the store. An outside company-- like Euclid Analytics-- collects data and analyzes it.

"It's a dedicated device that actually tracks smartphones as they move through the store," said technology expert David Seitz, CFO at Greenwire IT. "It's only tied to a hardware ID on your phone, so it's not like they're pooling your name... it's really just 'this piece of hardware moved through at this time and did these sorts of things.'"

The technology allows a retailer to find out how long you shop, how often you visit the store, what displays you look at, and whether or not you walked by the store without going in.

"This is old school behavioral tracking done in a new environment," said Chris Spiro, CEO of Spiro & Associates Marketing, Advertising and Public Relations. "That [consumer] profile is valuable... if I have to spend less money to convince you to buy my product, I can then have more money to convince more people to buy my product."

Some privacy experts argue customers deserve to know when they're being tracked, and deserve an option to decline participation.

"It treats people more like human beings rather than like commodities," Bonner said.

Legally, however, stores don't have to inform customers. Tracking or monitoring becomes an invasion of privacy only when it happens in a location where you expect privacy, according to attorney Andrew Epstein.

"Your home, in a hotel room, in a bathroom... those are the places where you can pretty much automatically expect your privacy to be protected," Epstein said.

Shopper Genesis Alvarado said she doesn't mind being tracked if it helps stores identify products she's interested in.

"I must be a pretty amazing customer for them to want to track me," she said.

Other shoppers said the technology feels invasive.

"It's weird... I just feel like, why do they need to know exactly where you're at?" said shopper Jordain Ray.

If you don't want to be tracked while you shop, you can turn off the wifi signal on your smart phone, or simply leave it at home.

Nordstrom, Family Dollar and Home Depot have admitted to using the controversial technology that's raising concerns among privacy experts.

Stores that don't use the technology include JCPenney, Macy's, Walgreens and Sears. A spokesperson for Saks Fifth Avenue wouldn't comment about whether or not the store is using this technology.