DENVER - Stores nationwide are tracking customers' smart phones to determine how long they spend in stores, where they go and whether they are repeat customers, an investigation by our Scripps partner station KMGH found.
The tracking is also possible outside of stores, if the WiFi signal extends to other areas.
Customers interviewed by KMGH said they knew nothing about the tracking because signs are often hard to find.
"I feel like it's an invasion of my privacy," Jill White, a shopper at Cherry Creek Mall near Denver, told KMGH investigators.
"I think it's outrageous," John Soma, executive director of University of Denver's Privacy Foundation, said. "What are they going to do with that data? Are they going to keep it forever? Are they going to aggregate it? Are they going to sell it to 'affiliates?' We just don't know. That's what's so troubling to me."
Nordstrom in Cherry Creek Mall and Nordstrom Rack in Boulder, Colo. both have the tracking system by Euclid Analytics. The system tracks the WiFi signals from smart phones to determine how long and where in the store customers shop.
Nordstrom and Euclid representatives say they are just trying to determine busy areas, so the stores can have proper staffing and determine what areas interest shoppers. The equipment, which tracks an individual mobile device’s MAC address, can also show if the shopper is a repeat customer.
The technology can also track people who walk past the store to let stores know if window displays are effective, but Nordstrom is not obtaining that information, Euclid spokesman John Fu told KMGH in a phone interview.
Euclid, based in Palo Alto, Calif., said customer privacy is important to the company and the tracking system does not attempt to identify individual shoppers. It provides aggregate data to stores and shoppers can opt out by turning off the phone's WiFi, he said.
Euclid would not provide the names of stores that use the system so shoppers know where they might be tracked. Euclid only provided zip codes of where stores using the system are located.
Fu said his company does take consumer information, but does not disclose identities.
"Well, we don't actually identify consumers either," Fu said. "We never know the name or identity of a particular consumer, so you know, we don't identify the names of our clients either."
But shoppers we talked to were not even aware the tracking was happening, and KMGH found the signs at Nordstrom were difficult to see.
"That is not effective notice, and clearly it is not effective consent with some fine print saying, 'by agreeing to walk into this store you're giving up your privacy rights on tracking information,'" Soma said.
A Nordstrom's spokeswoman said the store would improve training for store managers and make signs more visible.
Soma said if stores want the information, they should use a system where shoppers can voluntarily opt-in instead of forcing them to opt-out. Shoppers who want to avoid Euclid's tracking have to turn the WiFi antenna on their phones off when coming near stores using the technology.
Euclid also says that consumers can opt-out of the tracking by visiting their website and entering their phone’s MAC address. The company says this will block future tracking on its sensors and erase the individual’s information from its database.
But Fu said Euclid rejects the idea of an opt-in system.
"If it were designed as an opt-in system only, then we wouldn't be able to help the retailer really understand what was going on inside the store, because it would be a very, very small percentage of the people actually visiting the store," Fu said.
And while Fu said Euclid's policy is to make sure the data they collect cannot identify specific people, he conceded there are no legal limits to the use of data Euclid gathers.
"I can only speak to what we do right now, and that is, we have no intent to ever sell this information, for instance to a data broker, link it to any kind of personal information and that's just not something that's in our plans for now or in the future," Fu said.
But shoppers who KMGH talked to did not like the tracking system.
"Now that I know that they're tracking me, I'm a little less likely to shop in their store," White said.
A Nordstrom spokeswoman said that if shoppers have questions or concerns about Euclid, they should speak to their local store managers, email their corporate Privacy Department at firstname.lastname@example.org , or call 206-233-5678.
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