The retail sector is undergoing a rapid transformation as technology enables new ways of enhancing customer experience, optimizing operations, and preventing crime. However, the use of technology also raises concerns about data protection and privacy rights. How do retailers balance security and privacy with technology?
One of the most controversial technologies used by retailers is facial recognition, which scans and matches faces against a database of known offenders or persons of interest. The technology is intended to deter and detect shoplifting, fraud, and violence, as well as to provide personalized offers and services to customers.
However, facial recognition also poses serious risks to privacy and civil liberties, as it can enable mass surveillance, discrimination, and identity theft. In New Zealand, Foodstuffs North Island, a supermarket chain, is trialing facial recognition in 25 of its stores, sparking criticism from the Privacy Commissioner and civil society groups. The Commissioner has questioned the effectiveness and necessity of the technology, as well as the transparency and consent of the customers.
Retail NZ, the industry association, has supported the trial, saying that retail crime costs its members over $2.6 billion annually and puts employees and customers at risk. The association hopes that the trial will pave the way for wider adoption of facial recognition by other retailers.
Big Data: A Powerful Tool for Business Intelligence
Another technology that is widely used by retailers is big data, which refers to the collection, analysis, and use of large and complex datasets. Big data can help retailers gain insights into customer behavior, preferences, and trends, as well as improve inventory management, supply chain efficiency, and marketing strategies.
However, big data also poses challenges to data protection and privacy, as it can involve the collection and processing of sensitive and personal information, such as names, addresses, credit card details, and health records. Retailers need to comply with data protection regulations, such as the General Data Protection Regulation (GDPR) in the European Union, which require them to obtain consent, respect data minimization, and ensure data security.
In Australia, Coles, a supermarket chain, has signed a three-year deal with Palantir, a US data analysis company, to use its software platform for business intelligence. Palantir is known for its controversial work with government agencies, such as the CIA and the NSA, and has been accused of facilitating human rights violations and mass surveillance. Coles has said that the deal will not involve any customer data, and that it will use Palantir’s software to improve its operational efficiency and competitiveness.
Biometrics: A Convenient Tool for Customer Experience
A third technology that is increasingly used by retailers is biometrics, which refers to the measurement and verification of human characteristics, such as fingerprints, iris, voice, and face. Biometrics can offer convenience and security to customers, as they can enable fast and frictionless transactions, such as payments, check-ins, and loyalty programs.
However, biometrics also pose risks to privacy and security, as they can reveal sensitive and personal information, such as health, ethnicity, and mood. Biometrics are also vulnerable to hacking, spoofing, and theft, as they can be copied, manipulated, or stolen. Retailers need to ensure that biometric data is collected, stored, and used in a lawful, ethical, and secure manner, and that customers are informed and consented.
In the Philippines, SM Supermalls, a mall operator, has launched a biometric loyalty program, called SMile, which allows customers to earn and redeem points using their face. The program uses facial recognition technology to identify and verify customers, and to provide them with personalized offers and rewards. SM Supermalls has said that the program is voluntary, and that it follows data protection laws and standards.
Technology can offer many benefits to retailers and customers, such as enhancing customer experience, optimizing operations, and preventing crime. However, technology can also pose many challenges to data protection and privacy rights, such as enabling mass surveillance, discrimination, and identity theft. Retailers need to balance security and privacy with technology, and to comply with data protection regulations, respect customer consent, and ensure data security.
