If you shop til you drop, will they track when you come back?

Just because retailers can track your smartphones doesn't mean they're violating your privacy, says Euclid Analytics. Part II of my series on retail tracking.

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Philz Coffee, a popular Bay Area café chain, uses Euclid’s software to analyze which of its 11 shops cater to frantic commuters who need their nonfat mocha soy lattes in a hurry because they’ve got a train to catch, and which locations are havens for unemployed hipsters who like to hang out all day with their iPads. Using that data, Philz can optimize staffing and customer flow in its commuter centric locations to get people on their way quickly, while offering more comfy places to sit and expanded menus to get the slackers to make a second purchase.

Or, says Fu, a large chain can analyze why Store A only converts 15 percent of its foot traffic into transactions, while Store B converts 30 percent. In these cases, the store merely takes the raw numbers of people who entered the store and divides by the number of transactions. There’s no way for Euclid to track actual purchases, Fu explains.

Still, one of the problems that remain with this form of tracking is most shoppers have no clue it’s happening. And people who pass by the store --but whose MAC addresses are captured anyway -- are completely in the dark.

Fu says Euclid requires retailers to place a sign or sticker in the windows of its stores (see above), alerting customers to the tracking and directing them towards a site where they can opt out. Once they do opt out, any previous data associated with their MAC address is erased, he adds.

But Euclid is only one of a half dozen companies using different techniques to help retailers track shoppers, most of which don’t bother to tell you.

“To be honest, the industry standard is no disclosure whatsoever,” says Fu. “Whether they’re using cameras, infrared, Bluetooth, or WiFi, no one is doing really good notification. While we require our customers to put stickers on the windows of their stores, we can’t say we have a perfect the best solution.”

The other thing to keep in mind is that, while it’s not possible to take a one-way hash and recreate your MAC address, it is still possible to do the opposite – take your MAC data and recreate the hash. If legal authorities have your name and MAC address, they could approach Euclid with a court order and demand your location data.

Fu says that while this is theoretically possible, it has yet to happen. He adds that the authorities would get much better location tracking by obtaining cell tower data from your wireless carrier. That would include nearly everywhere you've been, not just the stores that use Euclid's technology.

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