December 20, 2013, 2:59 PM — You thought you were shopping for family and friends this holiday season, but in doing so you may have also given a nice present to retailers: your data.
Over the past several months, a growing number of retailers -- including major chains Bloomingdale's, American Apparel and Brookstone -- have hired technology companies to help them learn more about what shoppers are doing in their stores. Spend 30 minutes trying on high-heel shoes, only to make a beeline for the coat rack? Foot traffic patterns like that might be looked at later. Or maybe you just wandered aimlessly around. That also could be interesting to the retailer.
You may not always be in the dark on this. There are also some businesses, such as the Apple Store, which have installed sensors so they can alert you to special deals or products as you walk past them, if you have downloaded a certain app on your iPhone and agreed to let it recognize your location. You walk past the sensor, which could be a Wi-Fi or Bluetooth hotspot, and it wakes up the app, displaying content or a push notification related to some nearby product. Apple says it's not doing any "tracking," that the content is only sent from the store to the shopper, not vice versa.
It makes sense that Apple would want to clarify its intentions. Because for some people, the thought that stores might be analyzing their movements, looking back at where they were, even if only as a group, might creep them out. Nordstrom learned this last year, when it started following Wi-Fi signals from shoppers' smartphones and later ended the project following some negative reactions.
But for other retailers, the opportunity to learn more about shoppers' habits is still too good to pass up. There are usually several motivations driving them: the dream of beating digital data hoarders like Amazon and eBay at their own game; the desire to better compete against their brick-and-mortar peers; and just a general interest in making improvements to their own business based on new forms of data.
It's all part of a movement referred to by some as "location-based marketing," or "indoor mapping," or, by others, "in-store tracking." But it's difficult to say how widespread the practice is right now, given that the industry is still in its early days, and also because many retailers aren't ready to talk about what they're doing.
The Future of Privacy Forum, a Washington, D.C.-based think tank focused on advancing responsible data practices, estimates that roughly 1,000 businesses in the U.S. and Canada are using mobile location-analytics technologies in some way right now.