Trust, Transparency Best In-Store Deal for Shoppers with Mobile Phones

By Jules Polonetsky, executive director, Future of Privacy Forum

In mid- May, over 30,000 professionals from the shopping center industry gathered in Las Vegas for the ICSC’s annual RECon event.

In addition to discussing leasing and the state of the retail market, for the first the first time a new topic was on the agenda – consumer privacy.

Why? Because the use of new technologies to improve the shopping experience and improve retail performance has become a major focus for every major shopping center and for thousands of retailers.

Apps that help consumers navigate malls and find the products they want, technology that helps drivers find parking spots, and even high-tech sensors that help report on how pedestrians move through stores have become essential.

These new technologies provide benefits for both retailers and their consumers. But many of these technologies rely on tracking consumer data and raise privacy concerns – if deployed in ways that surprise consumers.

One new technology has been of particular interest to malls and retailers, but has also been the subject of debate.  

Mobile location analytics leverages the fact that it is feasible to track the Wi-Fi or Bluetooth signals of customers’ smartphones, allowing tech vendors to create reports about aggregated patterns of customer traffic.  Reports can indicate whether retail spaces are being laid out in an efficient way, for instance, and estimate wait times and checkout. Mall operators can understand the impact of anchor tenants on other shops and the effectiveness of special events and promotions at bringing shoppers into stores.

It’s not a surprise that the deployment of these technologies has led to critical media stories about surprised shoppers who express annoyance when told that they are secretly having their phones tracked.

To respond to these concerns, the Future of Privacy Forum partnered with Senator Charles Schumer to create a “Mobile Location Code of Conduct” for venues using location analytics.  

Our goal was to support consumer trust and to enable the use of an important and beneficial technology. We did so by working with the leading mobile location companies who agreed to provide consumers with notice and choice about how the technology is used by putting enforceable guidelines in place to create best data practices that will provide transparency and choice for consumers.

Specifically, the code calls for the display of conspicuous signage by retailers, and for a central opt-out site for consumers. Companies that commit to the Code must limit how the MLA data they collect is used and shared, and how long it may be retained.  

The Code also mandates that companies de-identify the data and explain in their privacy policy how they do so. Companies are required to get opt-in consent when personal information is collected, or when a consumer will be contacted. Where the information collected is not personal, a consumer may opt out by entering their phone's MAC address at smart-places.org.

In addition, data cannot be collected or used in an adverse manner for employment, health care or insurance purposes.

To date, 11 companies have committed to the Code:  of Conduct: Aislelabs, Brickstream, Euclid, eyeQ Insights, iInside Measurance, Mexia Interactive, Radium Networks, Solomo Technology, Turnstyle Solutions, and Path Intelligence.

We believe the creation of aggregated reports benefits consumers, but the creation of a central, do not track option at www.smart-places.org to ensure consumers who wanted to decline could do so is a critical and necessary step in parlaying trust and transparency into a more loyal, and more lasting consumer-retailer engagement.

Mall operators and retailers can ensure that they use consumer data in a trustworthy manner by making sure they do business with companies who have committed to baseline rules for responsible data use.

That’s the right long-term bet that will pay out dividends and wins for everyone in the retail ecosystem.

Jules Polonetsky is executive director and co-chair of the Future of Privacy Forum, a Washington, D.C.-based think tank that seeks to advance responsible data practices. Founded five years ago, FPF is supported by more than 80 leading companies, as well as an advisory board of comprised of the country’s leading academics and advocates. FPF’s current projects focus on online data use, smart grid, mobile data, big data, apps and social media. More info at Futureofprivacy.org. Contact Polonetsky at julespol@futureofprivacy.org.


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