Mining WiFi Data: Retail Privacy Pitfalls - InformationWeek

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09:06 AM
Doug Henschen
Doug Henschen
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Mining WiFi Data: Retail Privacy Pitfalls

WiFi data mining starts with anonymous tracking, but it can lead to personal details in social profiles. Interop New York session explores opportunities and limits for retailers.

Retailers are changing their tune when it comes to installing and exploiting WiFi infrastructure for customer insight. But are some retailers going too far?

This is the question Ryan Adzima, senior wireless engineer at systems reseller General Datatech, will pose at Interop New York next month in an October 2nd presentation entitled, "The Social Wi-Fi Goldmine: Should You Be Digging?" Not so long ago, retailers were reticent to invest in WiFi infrastructure, but Adzima says they now see the advantages of promoting online access and making shopping apps available to customers.

"Two years ago, nobody wanted to put Wi-Fi in their stores to give consumers a way to window shop," Adzima says. "Now they have a massive incentive because they'll see you going to Amazon or other competitors, they'll see your buying history, and they can target you more specifically and draw you away from competitors."

[Are there any standards in this domain? Read NIST Drafts Mobile App Security Guidelines.]

The baseline opportunity in exploiting WiFi is anonymous information gathering. With presence-analytics applications, for example, retailers have no idea who you are, but they can track the unique mobile access control (MAC) addresses of smartphones as they pass through a store. From this they can gather statistics on footpaths and dwell times at various locations throughout the store and gain insight into which departments, displays and specific products are drawing traffic.

Purple WiFi touts heat mapping, geofencing, and automated promotions among the capabilities of its Wi-Fi analytics suite.
Purple WiFi touts heat mapping, geofencing, and automated promotions among the capabilities of its Wi-Fi analytics suite.

This intelligence, provided by vendors like Euclid Analytics and Purple WiFi, helps you understand the traits of customers coming directly into your store from parking-lot entrances versus mall entrances, which might hint at primary versus secondary stops. It also help with department and product evaluation and planning, so you can come up with strategies to place traffic-driving products near profit-driving products or departments that aren't getting enough attention.

Privacy hawks would point out that these surveillance systems can track smartphones whether users log onto the store's public WiFi service or not (so long as the phones have WiFi on). What's more, MAC addresses are unique to each device and therefore are traceable to unique owners.

But tracking to individuals just doesn't happen, according to Adzima, and even if retailers practice this kind of surveillance without logins, "There's nothing wrong with this approach," he says. "It has nothing to do with individuals; it's about understanding shoppers as a group."

The next step up in mobile-data mining is welcoming customers to login into your WiFi network and, simultaneously, your customer loyalty account. That could happen using Facebook or another network account ID and password, but we'll get to this social-profile angle in a moment. For now, let's just assume

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio
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User Rank: Apprentice
9/15/2014 | 10:37:56 AM
The sky is falling!
I have discussed this topc with a number of industry bloggers and nerds to great extent, and what it comes down to is what you are willing to trade for an experience. While the evil big brother mentality could in fact be real, the majority of the time this type of analysis and collection is used to provide a better customer experience. By keeping everything opt-in, supplying methods for opt-out, and not penalizing those who do not wish to take part in the social interaction , you or your company can still offer a great servive without customers feeling taken advantage of. has a few write-ups about this ;-)
D. Henschen
D. Henschen,
User Rank: Author
9/15/2014 | 10:09:56 AM
Re: WiFi and Euclid app...
Here are links to two in-depth articles we've published about Eudlid and other apps:

Your Smartphone As Big Data Analytics Tool

Privacy Fears Hit Retailers' Big Data Analytics Plans


David F. Carr
David F. Carr,
User Rank: Author
9/15/2014 | 10:06:04 AM
shopping cart demolition derby
The danger of getting rammed with a shopping cart is going to rise rapidly if stores succeed in convincing customers to spend more time staring at their phones and tablets.
User Rank: Author
9/15/2014 | 9:21:20 AM
I can't give the URL here with our comment restrictions. I wrote about Euclid in 2013. a The company claimed does violate privacy because it doesn't tap into calling or browsing data. Also each MAC address is scrambled, "using a one-way hashing algorithm," the company said. In case people are still concerned, Euclid publishes its privacy commitment and offers a way to remove one's data from its site or through instructions posted at the stores that use its service. 

Even if Euclid does know your location, "it won't know much more than your cellular provider, or any of the app vendors to whom you have given location permission on your phone." And the fact is that stores already do their best to track customer activity either through loyalty cards, store credit cards, or by asking for phone numbers at checkout.

This kind of data collection is less personal, focusing on general patterns of visits and purchases rather than personal ones. It's not the kind of marketing that Target made notorious with offers for baby products to pregnant women, but an understanding of what brings customers in and how long it takes them to buy.
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