Forget Your Uber Rating, What’s Your Retail Score?

As consumers living in a digital world, we're well aware of the pervasive data collection practices of companies that monitor online behaviors. What many consumers are not aware of, however, is that in an effort to stay on par with digital retailers, brick-and-mortar stores are beginning to use technologies that can turn stores into “physical websites.” Using facial recognition software, thermal imaging maps, device-based tracking, floor sensors and more, traditional retailers are able to track physical data just as they would online.

Physical tracking, when combined with customer data accumulated through traditional digital means, gives an insight into the consumer psyche that was previously elusive to brick-and-mortar retailers — e.g., how shoppers sort potential purchases within a dressing room, the amount of time a potential patron looks at an object in the window, and even the expression on a customer’s face when they touch an item or interact with a salesperson.

Companies around the world are dedicated to assembling “scores” for every potential customer, which predict how a consumer will behave in the retail environment. The data harvested from a person’s digital persona can be used to “rank” consumers in a number of ways, including “future value” as a customer, discretionary spending capabilities, or even their likelihood of becoming pregnant. When a customer enters a brick-and-mortar store, these digital scores can be combined with physical data through a mobile device connecting to Wi-Fi or using the store’s mobile app.

There are dozens of “scoring” companies that keep tabs on how often a consumer returns merchandise to the store, whether the consumer submits complaints to the retailer, or even the amount of times a consumer opens finance and budgeting apps on their mobile phone. The surveillance score assigned to a consumer is a measurement of the person's “trustworthiness,” and often dictates how they're treated by businesses. A favorable score might unlock elite treatment in the retail setting — e.g., decreased hold times on calls, exclusive coupon codes, or even a higher likelihood of the store accepting a late return.

In the Wild West of digital and physical surveillance, it's hard for retailers to know how to proceed with data collection methods. One of the biggest concerns voiced by consumers is that they're unaware that they're being monitored in the first place. Thus, the easiest and most effective way for retailers to tackle this issue is to be upfront with consumers. For example, publish data practices, ask for consent to obtain data on retail websites, and place signs in prominent locations throughout brick-and-mortar stores that notify consumers of the surveillance. Furthermore, train salespeople in retail locations about the basics of the data collection to show consumers exactly how the data is being used — e.g., to monitor foot traffic throughout the store, to track engagement with certain products or displays, or to trace the path of a product from backroom to shopping bag.

When and where facial and emotional recognition software is used, make it clear. Getting a written consent from consumers to use biometric data is required by some local statutes, and could be a good practice for retailers. The battle against pervasive data collection has been lost — the practice is inescapable in the modern retail space of targeted advertisements and personalized shopping experiences. All consumers want is transparency: How is their data being collected and used? So long as consumers aren't receiving disparate treatment based on certain suspect classifications like race or gender, no current legal framework stands in the way of data collection and application.

Danielle Garno is a member of Cozen O’Connor, a full-service international law firm. Katie Albanese is an associate at Greenberg Traurig, a global law firm.