Privacy & Cybersecurity Newsletter: International Edition July 2015

Retail Tracking Update: Privacy Guidance Following Nomi Technologies

- There is currently a widespread effort to quantify everything, from steps, to sleep, to batted ball exit velocity. Fifteen years ago, TV host Jeremy Clarkson tested an innovative new supercar that could quantify your driving habits. At the time, Clarkson glibly quipped that the car’s technology allowed you to “compare your drive home from work with the drive home last night.” Today, that type of data is regarded as so useful that some companies will give you the technology for free. Of course, if we can quantify driving habits, we can quantify shopping habits. Indeed, by using mobile location analytics, retailers gain valuable insight by comparing a customer’s “checkout dwell time” with the checkout dwell time last night. The problem is that customers are even less eager to be quantified than Clarkson was.

Mobile location analytics (MLA) works by placing sensors inside stores and using them to interact with the Wi-Fi and Bluetooth functions of smartphones. The resulting data is de-personalized and aggregated into analytics that tell retailers about customers’ walking paths, high-traffic areas, the duration and frequency of customer visits, the impact of advertising, and more. Retailers can use this data to help optimize their store layouts, place products, and adjust staffing levels. However, a recent FTC action highlighted the privacy concerns that temper widespread MLA use.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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