Watching you shop

The future of retail is coming, and it knows where you shop. Thanks to the Wi-Fi signals invisibly broadcast by smartphones, some retail stores and cafés are tracking customers’ movements. They use the information to boost sales and better understand customer interests, but some shoppers are worried about privacy.

A San Francisco–based company that provides such tracking services, Euclid Analytics, in January began offering its services free of charge to stores and restaurants that already have the necessary Wi-Fi hardware. Euclid is the first company to offer Wi-Fi tracking for free—a move that seems sure to increase interest in the practice among businesses.

Using store-based Wi-Fi sensors as small as a deck of playing cards, Euclid tracks how often shoppers walk past a store, whether they come inside, how long they browse, how long they stand in line, and whether they are new customers. Companies can get more detailed analytics for a $100 subscription fee per store. They can learn whether shoppers spend more time in the shoe department or the jeans aisle, or whether they live in a wealthy zip code.

The data enables stores to make smart decisions about where to place products, what to sell, and when to advertise special sales in the window—perhaps on days with higher foot traffic outside.

For customers, the knowledge their every move is being logged and stored in a massive web server carries a certain creep factor. The clothing chain Nordstrom experimented with Euclid’s shopper tracking system last year but dropped it in May after customers complained. The Home Depot also has tested the service.

“We have no intention of capturing personal information,” Euclid claims. The company scrambles the unique “MAC” address that smartphones broadcast so no third party can directly identify the device owner. But it can infer things like gender and age based on which locations a particular smartphone visits. As more retail locations sign up for the service, the company will have an expanding pool of aggregate location data to draw from. As of December, Euclid was collecting 6 billion location measurements per day across thousands of locations. It keeps its client list confidential, although one California-based café chain openly uses the service.

And Euclid isn’t alone. Other analytics companies that track shoppers’ mobile devices include ShopperTrak in Chicago, RetailNext in San Jose, Calif., and Turnstyle Solutions in Toronto. Turnstyle tracks smartphones using a network of sensors in downtown Toronto, and notes whether they visit gyms, clubs, restaurants, coffee shops, yoga studios, or sports arenas. In some cases it matches devices to Facebook profiles, collecting ages and sexes, though it doesn’t reveal names to clients, according to The Wall Street Journal.

Both Turnstyle and Euclid allow you to opt out of their tracking schemes on their websites. Trying to opt out of every such service might be a waste of time. You probably have little to worry about as an individual shopper, but the new tracking practice raises questions about how the aggregate data is used and whether it is safe from hackers.

You can always turn off your phone’s Wi-Fi while you shop, though that won’t quite make you disappear either: Some stores track customers by camera.