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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.

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Louise Giannakis's picture

Louise Giannakis is an Associate in the firm’s Real Estate Group.  She focuses her practice on land use and commercial real estate matters including acquisitions, development, permitting, financing and leasing. Louise represents clients in the development of mixed-use, office, and retail projects, as well as the implementation of private and public cultural projects.

While in law school, Louise served as President of the Boston College Real Estate Law Society, and as Business Manager and Staff Writer of the Uniform Commercial Code Reporter-Digest. She interned with the Massachusetts Attorney General’s Office, Insurance and Financial Services Division, where she helped to administer the Commonwealth’s consumer protection laws. Louise also acted as Boston College Law School Liaison to the Boston Bar Association’s Real Estate Steering Committee. Prior to law school, Louise worked at a boutique law firm in New Orleans, focusing primarily on transactional real estate matters.

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Retail development is the center of Nancy Davids' real estate practice. Nancy represents retail landlords and tenants in enclosed mall, lifestyle and mixed use projects. She also represents developers of office and retail projects in connection with zoning and land use issues. Nancy is a Director and the Co-Chair of the Goulston & Storrs Retail, Restaurant & Consumer industry group.