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Brick-and-mortar stores have been testing a number of in-store tracking and data collection methods, like beacons and facial recognition, but these efforts are raising concerns about privacy, according to The Wall Street Journal.
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They’ve been using these technologies in an attempt to boost their performances amid the rise of e-commerce, but government regulation or backlash from consumers could dampen these efforts.
Here’s what it means: The technologies stores are using to improve their capabilities are starting to worry US government officials and the American Civil Liberties Union (ACLU).
- E-tailers offer personalized experiences and collect consumer data better than stores because they can track everything a shopper does on their sites, hurting some stores’ performances in recent years. Some retailers have added technologies like beacons, which send offers and messages to consumers’ personal devices, or smart mirrors, which make tailored recommendations, to combat this. But to offer relevant content, retailers need to be able to identify consumers when they enter a store and then track them throughout their journey, leading many to use facial recognition technology, voluntary Wi-Fi logins, and more (see below).
- Multiple US Senators and other privacy advocates are looking to bring consistent privacy laws to both online and offline retail, which would hinder the new in-store technologies’ effectiveness. Senator Roger Wicker (R-MS), the Senate Commerce Chairman, has noted that there should be data protections that cover both online and in-store business practices, while Senators Brian Schatz (D-HI) and Roy Blunt (R-MO) have created a bill that would ban commercial use of facial recognition that tracks consumers without their consent. Additionally, ACLU senior policy analyst Jay Stanley said that as in-store data sensors improve and start to collect more types of data, like mood and heart rate, there will need to be more privacy protections for consumers. All of these concerns make it more likely that legislation focused on in-store data collection may pop up in the next few years.
The bigger picture: Any future regulations dealing with in-store data privacy will likely hamper physical retailers’ ability to provide a personalized and convenient shopping experience.
If retailers’ ability to identify and track consumers in-store is restricted, they may struggle to personalize in-store shopping. Retailers need to be able to link a consumer to an account and pull data on them, like e-tailers do, to seamlessly personalize in-store shopping.
But if stores can’t automatically identify consumers when they enter, they’ll have to rely on opt-ins that shoppers may choose to skip, making it difficult to provide individualized experiences and recommendations in-store.
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