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TECHNOLOGY

What Does the Future of Shopping Look Like? Just Go to Your Local Target to Discover the “Privacy Paradox.”

You’d think people would bristle at the automation, cameras and other high-tech methods big box companies use to garner data about customers. But as long as there’s a benefit, consumers are getting more comfortable with retailers knowing more about them.

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BY Christina DesMarais - 09 Feb 2018

What Does the Future of Shopping Look Like? Just Go to Your Local Target to Discover the "Privacy Paradox."

PHOTO CREDIT: Getty Images

Just a few years ago, privacy was a big issue as regular people started to understand that big companies like Facebook, Target, Walmart and others were using sophisticated technologies to understand users on an individual level. Meaning, whatever big box store you frequent--or the social media network you check when you're bored--is able to see your digital footprints so as to know what you like and dislike. And that is like gold to them.

But consumers are letting down their guard.

Calling it the "privacy paradox," University of Michigan School of Information professor Cliff Lamp says in studying social computing he has found that people make a lot of noise when it comes to privacy, but push concerns aside in favor of convenience. Think of all the heat Facebook's News Feed used to get for infringing on user privacy. Now, many people appreciate Facebook's ability to target ads to themselves for things they actually want to buy.

Exhibit One: People love Amazon regardless of how it mines user data.

With "tens of millions" of Alexa-enabled devices sold over the holidays, more people than ever are plugging into the Amazon ecosystem. That's why Amazon Go is such a natural evolution for the e-commerce giant. This new kind of store--the first one now open in Seattle--makes use of an app on your phone, many cameras enabling computer vision and sensors which can tell when an item has been lifted from a shelf. The whole point, supposedly, is to allow customers to shop and leave the store without having to wait in line, since Amazon uses all its high-tech wizardry to know what you've grabbed. And the company can automatically pay itself, since it already has your payment information because of all the shopping you're already doing online and with its app.

You'd think people would bristle at all this automation and the many cameras which enable it. But consumers are getting more comfortable with Amazon--and other companies--knowing more about them.

Consumers are more open to being tracked.

Ten years ago the notion of Minority Report coming true made people shudder. But according to JJ Murphy, technical director and data science practice lead at software development company Globant, today consumers are much more open to a store's app knowing their location in a store, or cameras staring them in the face when they check out at Target. The propensity to share information about oneself--behaviors, shopping history, preferences--has increased because people appreciate what they get in return: discounts, promotions and recommendations that actually take some of the friction out of shopping.

It's true. Several years ago, I found the idea of retailers profiling me and keeping track of everything I buy disconcerting. Now, it's more of technological wonder that when I visit Walmart's website, the first thing it does is ask me if I'm ready to reorder a slew of products I put into a real cart in a physical store, even though I've never ordered these things via the website.

This happens via a combination of customer profiling and a massive amount of investment retailers have put into artificial intelligence. According to Jeff Cheal, director of personalization, campaign and analytics strategy for the global software company Episerver, companies are trying to glean as much data as possible to both give individual customers a more personalized experience, but also to better understand the customer base as a whole. And often they get that information via cameras which can discern gender, age and whether or not a person is a parent, as well as customer sentiment regarding which parts of a shopping experience are pleasing or displeasing for customers.

Retailers have to be careful, however. Several years ago Target found itself in an uncomfortable spotlight because of is remarkable ability to profile its customers. The company had inadvertently alerted a teenager's family regarding her undisclosed pregnancy by sending her coupons for baby products. Its algorithms could tell she was pregnant according to the things she had been buying.

Today, while big retailers know a great deal about their customers, they add rules to their backend software so people don't receive offers regarding things which might be sensitive, Globant's Murphy explains.

Transparency builds trust.

Scroll through the privacy policies of these big box retailers and you'll find mention of facial recognition, cameras, and the fact that they'll gather as much information from customer behaviors wherever they can get it. But just because a company has the technical ability to use facial recognition--as an example--it's not necessarily something that's in their best interest when it comes to building trust with consumers.

Look at how Amazon handles itself.

Barry Pellas, who oversees tech strategy and the development of strategic assets for digital transformation firm PointSource, points out that Amazon certainly could be using facial recognition to individually identify customers in its new high-tech store in Seattle, but does not. Why? Because the company isn't willing to take the chance that it might damage the trust consumers have invested in the brand.

And Andrew Park, senior director of customer experience strategy for InMoment, a customer experience management company, says that Amazon's launch of Amazon Key last year is a testament to the company's belief that it will continue to build consumer trust. It's unclear how many people have adopted the service which allows Prime members to give delivery people the ability to leave packages inside their doors, with the help of Amazon's Cloud Cam security camera, a smart door lock and an app. But in recent years consumers have shown an increasing tendency to push aside privacy concerns if they're outweighed by benefits, such as not having your deliveries stolen by thugs (as many were this past holiday season).

Will a Minority Report shopping experience come true?

Can signs scan your face, know who you are and instantly tailor a personalized ad as you walk by? Technically, yes, Cheal says, although it's still too creepy for companies to be using. He says in Asia--where the culture is less phobic when it comes to privacy--many retailers use beacons and Bluetooth to zap coupons and promotions to people's phones when they walk by a store front. And virtual reality (VR) and augmented reality (AR) are much more commonly used there, compared with the United States.

It's something you'll be seeing more of, though. InMoment's Park notes that Home Depot's app helps people find the aisle where they can find the product they're looking for, and Toys R Us uses AR to open up games on their phones when signs within the store are scanned.

PointSource's Pellas sees AR and VR being something small clothing retailers will increasingly adopt, especially considering Amazon Echo Look, a camera you control through Alexa which takes photos and videos of you wearing various outfits so as to build a lookbook. You can see yourself from every angle, select your favorites, share with others and get recommendations for new stuff to buy, according to what you typically like to wear. Unfortunately, at this point it's invitation only.

What about the voice-controlled personal assistants which are always listening?

Pellas points out that while Amazon, Google and Apple downplay privacy concerns related to these devices, the reality is that by nature of how they operate these devices have to be always listening. "You have to be sure you're OK with that," he says.

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