Academic journal article Journal of Law, Technology and the Internet

The New Retail Experience and Its Unaddressed Privacy Concerns: How Rfid and Mobile Location Analytics Are Collecting Customer Information

Academic journal article Journal of Law, Technology and the Internet

The New Retail Experience and Its Unaddressed Privacy Concerns: How Rfid and Mobile Location Analytics Are Collecting Customer Information

Article excerpt


Americans love to shop. Shoppers can shop in any platform, at any time, and anywhere to get just about anything they want. The fashion industry has been at the forefront of customizing the customer experience, (1) and the emergence of omnichannel has shown the significance of connecting brick and mortar stores with digital means of shopping through the Internet and mobile apps. (2) The result of increased technology to facilitate the shopping experience requires the collection of data. where there is collection of data, there are privacy concerns to be addressed. Pam Dixon, the executive director of the World Privacy Forum, has remarked that the media has focused on companies' tracking through Internet browsers, but the public is, for the most part, unaware of how brick and mortar stores are tracking them. (3) She comments, "This is an entire business model that has sprung up that i think maybe three people in the entire country know about outside the industry." (4) Some of the technology that fashion retailers are now using is so foreign to legal regulators that the privacy implications have not yet been clearly confronted. Throughout the shopping evolution we have gone from brick and mortar to online to eStore--the latest shift in the shopping experience merging technology and the brick and mortar space.

Part I of this paper will look at the newest development of the retail experience and suggest a method to understand the privacy concerns as well as suggest a regulatory scheme to protect customers without inhibiting their shopping experience. Part II will provide a background of the three stages of shopping experiences and the evolution of privacy concerns associated with them. Part III will address the current American stance on data collection and privacy law with a particular look at privacy concerns that the eStore is facing. Finally, Part IV will provide guidance on how to deal with these data collection issues in the future and attempt to answer two questions:

(i) Does the definition of data collection need to be adjusted? and (ii) Are customers ready to accept the new eStore?


A. American Consumers Have Always Associated Brick and Mortar Stores as Limited in their Data Collection, While they Have Remained Cautious in their Online Shopping.

Jerry Kang ("Kang") pinpoints the comparison between a customer's experience in a mall in both real space and in cyberspace. (5) Analyzing the customer in a mall in real space, the customer experiences relative anonymity- the only people who are tracking the customer as the customer walks through the mall, browses the store, and makes a final purchase are the other people in the same real space. (6) Other than overeager sales associates, it is unlikely anyone will remember what the customer chose, how long the customer was in the store, and how long the customer held that navy leather handbag. The greatest data concern the customer will have is at the point-of-sale if the customer chooses to pay with a debit or credit card, which is "detailed, computer-processable, indexed by name, and potentially permanent." (7)

Shift the perspective of the customer in the mall to cyberspace, where the amount of information collected about the shopper mirrors the amount that is not collected in the brick and mortar store. (8) Retailer websites collect information about every item looked at, what is ordered, and the time spent on the website. (9) All this detailed and permanent information also includes personal credit or debit card information, as there is no cash payment option here. (10) However, the analysis does not stop there. Since Kang's publication in 1998, customers seem to be more comfortable with the amount of data collection that happens when shopping online. if not more settled, customers are at least more aware of the manipulation of their shopping habits that manifests into banner ads for the next week. …

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