Every smartphone these days comes equipped with a WiFi card. When the card is on and looking for networks to join, it’s detectable by local routers. In your home, the router connects to your device, and then voila — you have the Internet on your phone. But in a retail environment, other in-store equipment can pick up your WiFi card, learn your device’s unique ID number and use it to keep tabs on that device over time as you move through the store.
This gives offline companies the power to get incredibly specific data about how their customers behave. You could say it’s the physical version of what Web-based vendors have spent millions of dollars trying to perfect — the science of behavioral tracking.
Thousands of customer interactions a day are logged and uploaded to the databases of third-party companies that specialize in retail analytics. Estimates vary as to how big this industry is, but according to Polonetsky, nine major players account for the vast majority of tracking activity. Others estimate there could be as many as 40 major and minor firms.
To distinguish themselves from other nearby devices, all WiFi or Bluetooth-enabled gadgets come with something called a MAC address. It’s a unique, 12-digit code that helps routers send data to the right recipient. (MAC addresses have nothing to do with Apple, although Apple products that ship with wireless components come with them.) By logging the MAC address, companies can identify individual devices.
Combined with in-store cameras, those sensors can do an impressive job of following an individual around the store, examining what they’re looking at, and how they react to the products they consider. The video at above is from the New York Times’ article on the topic, and shows you how closely the system can monitor an individual’s movements. The video below, from Revision3’s TechFeed news program, also does a great job of walking you through the technology and how accurate it can actually be.
Cameras have become so sophisticated, with sharper lenses and data-processing, that companies can analyze what shoppers are looking at, and even what their mood is.
For example, Realeyes, based in London, which analyzes facial cues for responses to online ads, monitors shoppers’ so-called happiness levels in stores and their reactions at the register. Synqera, a start-up in St. Petersburg, Russia, is selling software for checkout devices or computers that tailors marketing messages to a customer’s gender, age and mood, measured by facial recognition.
“If you are an angry man of 30, and it is Friday evening, it may offer you a bottle of whiskey,” said Ekaterina Savchenko, the company’s head of marketing.
Nomi, of New York, uses Wi-Fi to track customers’ behavior in a store, but goes one step further by matching a phone with an individual.
When a shopper has volunteered some personal information, either by downloading a retailer’s app or providing an e-mail address when using in-store Wi-Fi, Nomi pulls up a profile of that customer — the number of recent visits, what products that customer was looking at on the Web site last night, purchase history. The store then has access to that profile.
“I walk into Macy’s, Macy’s knows that I just entered the store, and they’re able to give me a personalized recommendation through my phone the moment I enter the store,” said Corey Capasso, Nomi’s president. “It’s literally bringing the Amazon experience into the store.”
Thwarting this tracking yourself can be impractical. One option is simply to turn off your wireless cards whenever you enter a store. But that might still not prevent a retailer from snatching your MAC address while you’re walking by the promotion in the window outside. Some retail analytics companies — including New York-based Nomi, which this week raised $10 million in venture capital — offer an opt-out function on their Web sites where you can type in your MAC addresses and state your desire not to be tracked. Doing this for every device you own can be exhausting, however. And some retail analytics companies don’t provide the opt-out feature.
That’s where Bradish and The Wireless Registry’s other co-founder, Patrick Parodi, come in. Together with the Future of Privacy Forum, the two hope to build a kind of central Do Not Call list for MAC addresses. At least in theory, consumers will be able to visit a single Web site, register their MAC addresses for free, and the major tracking companies that have committed to the project will pledge not to follow those addresses around brick-and-mortar stores. It’s a form of potential self-regulation that should look familiar if you’ve been following the debate over online tracking, where Web browsers have begun letting users tell commercial Web sites they don’t wish to be followed.
“This database is going to allow these signals to be identified — it’s going to allow people to take control over their proximal identities,” said Parodi, referring to the way offline tracking depends on a person’s nearness to a store rather than their exact location as divulged by their mobile communications traffic.
The registry is set to launch within the next few weeks; Polonetsky says he’s still hammering out the agreement among the analytics companies, and that The Wireless Registry’s idea is one of a number of technologies that could ultimately power the list. But the real question isn’t when the registry will arrive; it’s whether it’ll work. There’s no law that compels companies to obey the list, so when you hand your MAC address to the retail analytics companies, you’re as likely to be doing their jobs for them as you are to be insulating yourself, says Chris Calabrese, a privacy lawyer with the American Civil Liberties Union.
“The danger is that it leads to more tracking rather than keeping you from being tracked,” he says, adding that even if the companies that agree to honor the list stand by their word, others may not be so scrupulous if the registry happens to leak.
2 thoughts on “How stores are using your phone’s WiFi to track you”
I refuse to buy or use anything that has SMART in it. I then immediately substitute that word for STUPID whenever I see it. Problem solved.
Just like the Communists twist the words by saying, “Ignorance is strength”, “War is peace”, “Freedom is slavery”, I decided to twist their words by saying, “SMART is STUPID”.
One solution: Digital Forensics Pouch for your phone, don’t buy the cheap ones. They don’t work.