The Cloudy Future of Facial Recognition In Stores

Department store surveillance cameras are not just watching for thieves. Some are also tracking customer activity. Knowing the ebb and flow of the number of shoppers, the path they take through the store and the products they touch can provide valuable information for boosting sales. While customers may find this level of scrutiny creepy, retailers see it as survival in a low-margin, fiercely competitive business.

Customer Data For Marketing

Retailers and vendors say technology is not being used today to personally identify shoppers. Software companies such as Prism Skylabs and RetailNext blur faces or use heat maps in providing visualizations of customer goings-on. In 2010, The Global Association For Marketing At Retail warned marketers against recording or storing facial data without consent. "While technology imposes few restrictions on data collections in retail settings, marketers should safeguard consumer privacy," the group said in publishing a voluntary code of conduct for collecting in-store customer data.

The Federal Trade Commission has said it does not have a problem with gathering aggregate information on shoppers. "We would be very concerned about the use of cameras to identify previously anonymous people," Mark Eichorn of the FTC Division of Privacy and Identity Protection told Time magazine.

Not surprisingly, privacy advocates are taking a more hardline stance. For them, the use of cameras for anything but catching pilferers is wrong, because most people do not know they are being watched for reasons other than security. But do people really expect privacy when standing in an aisle and checking out a jacket? They certainly don't expect others to know who they are, but it's a reasonable assumption that others will see them handling the potential purchase.

Other Personal Data

Retailers are gathering lots of personally identifiable information today. Every time you have your loyalty or rewards card swiped, the store is recording your purchase in order to offer you future deals on the same product or something similar. Usually, the offers come via email or on the receipt, but they could also arrive by snail mail.

Loyalty cards help level the playing field between brick-and-mortar stores and online retailers, such as Amazon.com, one of the most advanced users of customer data. Amazon records every purchase for each customer, and is quick to email recommendations for products based on the customer's buying history.

In physical stores, tracking customers is another way of fine-tuning the business. Analyzing activity as a whole can lead to better decisions on staffing and on placement of product displays and ads. If online retailers track how people navigate their Web sites, why shouldn't retailers do the same in stores?

The use of video cameras to gather data for marketing and store performance is still new. A survey of 47 national and regional retailers found less than a third used surveillance to analyze shopping and buying behavior, according to the Loss Prevention Research Council. Only one in five used it to measure shelf and product placement effectiveness.

Tech Vendors And Privacy

Those numbers are expected to grow and tech vendors are starting to push the envelope in order to stand out from the pack. For example, Italian mannequin maker Almax SpA has started selling a dummy called EyeSee that has a camera embedded in one eye, Bloomberg reported. The mannequin comes with facial recognition software that can record the age, gender and race of passers-by.

EyeSee does not store any of the images. But you can see how Almax is trying to gather additional data through facial recognition, while still maintaining customer anonymity.

Tying facial recognition to a database of loyalty cardholders sounds like nirvana for retailers. Imagine identifying customers entering the store and then texting coupons or special deals on products they may be willing to try. This might even be OK, legally speaking, if people signed up for the service.

But retailers seem to be staying clear of facial recognition technology for marketing, according to Matthew Kovinsky, vice president of sales and marketing for San Francisco-based startup Prism SkyLabs. "We built in privacy to our product and we haven't actually heard a ton of perspective customers pushing us to do more one to one identification and tracking."

While that appears to hold true today, it's hard to imagine that will remain the status quo forever.

Image courtesy of Shutterstock.