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Blog Posts: Retail Law Advisor

Facial Recognition in Retail: "Attention all Shoppers: We Already Know Everything about You"

Are you worried that “Alexa” is listening to your conversations? Do you cover your laptop camera with tape and refuse to store your passwords on your devices? Well, it looks like even stepping into the mall may require full-body armor if you wish to keep your basic data truly private. Retailers are increasingly utilizing advanced technologies such as facial recognition, biometric sensors, and smart-phone tracking in an attempt to compete with online retailers and beat the slouching trends of declining brick and mortar stores. Though these technologies have been around for years, their growing presence in the retail environment, and their increasing sophistication, has triggered a debate between those who value a tailored, efficient, and sometimes discounted shopping experience, and those who think their physical attributes and shopping habits are just that: theirs. And while struggling retailers may be tempted to utilize any technology that helps increase the bottom line, they should be mindful of not only privacy and data protection concerns, but a distaste from shoppers for what is sometimes perceived as an intrusion.

Retail stores are increasingly using these technologies to aggregate data related not only to your basic demographic information, such as age, gender, and race, but also whether your facial expressions indicate a particular mood, in which sections of the store you spend your time, or how long it takes you to decide between those two types of shampoo (and of course, which you choose). Undeniably, there are the more mild and agreeable uses of this technology, such as retailers using facial recognition to prevent theft by alerting staff to known repeat offenders on site. However, much of this technology is being developed and deployed for aid in optimizing the shopping experience for the user, and in turn, increasing retail sales. For instance, some retail stores scan patrons’ faces upon entering the store and matches them within a database of valued customers and celebrities to identify their individual profile: their purchase history, clothing size, or favorite items, and sends an alert to store staff with the relevant information. Are you a tired, 30-something at the grocery store on a Saturday? Your checkout register may just suggest a new coffee brand or some luxurious bubble bath to go with all of those groceries. These advances, convenient to some, creepy to others, beget the eternal question of privacy within this technology saturated-era: where do we draw the line?

While online retailers have the advantage of tracking cookies and piecing the “crumbs” together to deliver targeted, omni-channel marketing with almost unsettling accuracy, traditional brick and mortar stores argue the use of these technological innovations are no different. As a result, retailers are investing significant amounts of capital to ensure data security and prevent hacks of information they collect. Though the Freedom of Information Act is in place to prevent government overreach, no such structure currently exists to ensure private data and technology companies are kept in line. And while last month millions of Americans downloaded Google’s popular app “Arts & Culture”  to see whether they looked more like da Vinci’s Mona Lisa or Picasso’s Self-Portrait, users in Texas and Illinois were left stumped and unable to download the selfie-tool. That is because Texas and Illinois are currently the only states to ban the collection of biometric data, including a record of “face geometry” without a user’s consent, with other states like Washington and New York following in their efforts.

The takeaway for retailers? With so many advances in facial recognition technology, simultaneous to increasing state movement for protection of their citizens’ privacy, retailers should use great caution in investing heavily in any such technology. Moreover, retailers should already know their customers: potentially offending them with what they may consider invasive technology may just scare away customers and actually hurt their bottom line.