Answer & Explanation:Companies
Use Tracking Devices to Help Make Decisions
Fan Zhang, the owner of Happy Child, a trendy Asian restaurant in
downtown Toronto, knows that 170 of his customers went clubbing in November
[2013]. He knows that 250 went to the gym that month, and that 216 came in from
Yorkville, an upscale neighborhood. And he gleans this informa-tion without his
customers knowledge, or ever ask-ing them a single question.Mr. Zhang is a
client of Turnstyle Solutions Inc., a year-old local company that has placed
sensors in about 200 businesses within a 0.7 mile radius in downtown Toronto to
track shoppers as they move in the city.
The sensors, each about the size of
a deck of cards, follow signals emitted from Wi-Fi-enabled smartphones. That
allows them to create portraits of roughly 2 million peoples habits as they
have gone about their daily lives, traveling from yoga studios to restaurants,
to coffee shops, sports stadiums, hotels, and nightclubs.Instead of offering a
general promotion that may or may not hit a nerve, we can promote specifically
to the customers taste, says Mr. Zhang. He recently emblazoned workout
tank-tops with his restaurants logo, based on the data about his customers
gym visits. Turnstyle is at the forefront of a movement to track consumers who
are continuously broadcasting their location from phones. Other start-ups, such
as San Franciscobased Euclid Analytics Inc., use sensors to analyze
foot-traffic patterns, largely within an individ-ual retailers properties, to
glean insight about cus-tomer behavior.But Turnstyle is among the few that have
begun us-ing the technology more broadly to follow people where they live, work
and shop. The companys dense network of sensors can track any phone that has
Wi-Fi turned on, enabling the company to build profiles of consumers
lifestyles. Turnstyles weekly reports to clients use aggregate numbers and
dont include peoples names. But the company does collect the names, ages,
genders, and social media profiles of some people who log in with Facebook to a
free Wi-Fi service that Turnstyle runs at local restaurants and coffee shops,
including Happy Child. It uses that information, along with the wider foot
traffic data, to come up with dozens of lifestyle categories, including
yoga-goers, people who like the-ater, and hipsters.A business that knows which
sports team is most favored by its clients could offer special promotions on
game days, says Turnstyles 27-year-old founder Chris Gilpin. Czehoski, a local
restaurant, hired an 80s-music DJ for Friday nights after learning from
Turnstyle that more than 60% of the restaurants Wi-Fi-enabled customers were
over 30. But as the industry grows in prominence, location trackers are bound
to ignite privacy concerns. A com-pany could, for example, track peoples
visits to spe-cialist doctors or hospitals and sell that data to marketers.Locations
have meanings, says Eloise Gratton, a privacy lawyer. Marketers can infer that
a person has a certain disease from their Internet searches. A geoloca-tion
company can actually see the person visiting the doctor, making the inference
that the individual has this disease probably even more accurate, she says. In
the U.S., companies dont have to get a consent before collecting and sharing
most personal information, including peoples locations. A bill proposed by
Minnesota Senator Al Franken would require consent before collecting location
data. The U.S. Federal Trade Commission settled its first location privacy case
in December, against an app developer that misled consumers into believing
their location data wouldnt be sold to marketers.Even as they covet the data,
stores and businesses recognize it is a touchy subject. It would probably be
better not to use this tracking system at all if we had to let people know
about it, says Glenna Weddle, the owner of Rac Boutique, a womens clothing store
that is a Turnstyle client. Its not invasive. It might raise alarms for no
reason.Right now, the only way to opt-out of geolocation is to either switch
off the Wi-Fi on a cellphone or make a request through a website of one the
data companies (like Turnstyle) that has an opt-out option.As these companies
operate mostly behind the scenes, the nascent industry is keeping a close watch
on Google Inc. and Apple. With their Android and iOS mobile operating systems,
re-spectively, Google and Apple know the location of every customers
Wi-Fi-enabled phonefar more location data than any start-up could access. The
Silicon Valley giants arent allowing access to such data by outsiders. Both
Google and Apple declined to comment.Places where people didnt think they were
being watched are now repositories for collecting informa-tion, says Ryan Calo,
assistant professor at the Univer-sity of Washington School of Law. Companies
are increasingly able to connect between our online and offline lives, he
says.
