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Consumers pay high-tech price in privacy for perks

Saturday, March 1, 2014, 10:30 p.m.
 

Giant Eagle won't say much about the information it collects on people who enroll in its rewards program to earn savings on food and fuel, but it knows who has a weakness for Goldfish crackers.

GNC can see when your New Year's resolution ended. And Dick's Sporting Goods has a pretty good idea who will return to its stores this spring to gear up for baseball or softball season.

Consumers willingly — if unwittingly — provide trillions of “data points” to companies about their purchases, intimate habits and even where a computer mouse hovers on a computer screen without clicking. Americans worried about government spying often have themselves to blame when it comes to private-sector monitoring, experts said.

Yes, the government has a lot of information about us, IBM Senior Vice President Jon Iwata said during a Yale University symposium this year, but so do Target, the phone company and a lot of other businesses.

“What bothers people is that you are no longer anonymous, potentially, because you can be easily identified based on all the information that's out there,” Ravi Dhar, director of Yale's Center for Customer Insights, told the Tribune-Review. “I think maybe it goes to something more fundamental: People feel they aren't in control anymore.”

Companies don't like to talk about surveillance of shoppers because they fear consumer backlash. GNC, Dick's and other companies declined to comment for this story.

Giant Eagle was among the first retailers to introduce a loyalty program, and the company said it has “become the focal point in communicating important information to customers and in helping them track many of the ways they save with us.” The company uses the information for recalls and offers discounts on fuel and shoppers' preferences.

The Retail Industry Leaders Association, a Virginia-based trade group whose members include Target, Wal-Mart, Sears and other major retailers, said companies try to give shoppers what they want: discounts, relevant promotions and convenience through such things as paperless receipts.

All of that comes with a high-tech cost, said spokesman Brian Dodge.

“We struggle, to some degree, in some of the public debate with this conflict where there is a demand for these concierge-type services but a degree of skepticism of the data means required to provide them,” Dodge said.

Tracking their markets

Innovations develop faster than controls on what companies can do. Technology exists to scan a consumer's face when she enters a store, identify her with facial recognition software, and market items based on her likes.

“Minority Report,” the futuristic movie starring Tom Cruise, showed people walking by advertising signs that recognized them and pitched products directly to them.

Even that vastly underestimated the potential marketing, said Alessandro Acquisti, a Carnegie Mellon University professor.

Stores soon might be able to meld images of a shopper's best friends to develop an avatar that looks pleasantly familiar — even if they don't know why, he said.

Companies that record sales data about consumers often store and analyze the information for marketing. Some sell the results to third parties that aggregate detailed consumer profiles, which they then sell or rent to other companies for ads.

NextMark of Hanover, N.H., publishes an online directory of 65,000 lists that contain information on thousands, if not millions, of shoppers. It does not make the lists but connects retailers with companies that do.

The “American Fast Food Lovers Mailing List” offers names of people who “regularly eat out and enjoy casual dining,” with details about their ages, incomes, marital status and whether they have children. Others include people who said in surveys they prefer specific products such as Klondike ice cream bars, Heinz ketchup or Weight Watchers frozen entrees.

I-Behavior, a Louisville, Colo., company, collects data from more than 2,600 retail and catalog merchants, tracking 12 billion transactions and developing detailed profiles. It declined to comment.

Marketers look for people who are most likely interested in their products, rather than individual behaviors, said Joe Pych, NextMark's president.

“The perception is you're watching me wherever I go … but as far as marketers go, they've got a marketing budget, and they want to spend it in the right way,” he said.

Shoppers cannot do much to keep companies from tracking their purchases online, said Lorrie Cranor, a Carnegie Mellon University professor who studies privacy issues. The government sets strict limits for health and financial data but not other types of information.

“They have to protect your credit card number, obviously, but the fact that you bought this particular item is for the most part not a protected piece of information,” she said.

At a store, shoppers can reduce their footprint by using cash and opting out of loyalty programs, but that means giving up discounts and coupons they might want.

“You're signing up for them to collect data about you,” said Martin Lindner, a principal engineer in the CERT division of the Software Engineering Institute at Carnegie Mellon. “At the end of the day, the amount of money I'm saving isn't worth the risk of giving away things about me.”

‘Watched constantly'

At the other end of the spectrum are people who share almost everything.

Sharon Bauer, 48, of Kittanning uses a Fitbit wearable biometric device to record her activities and sleep habits — information she uploads to the company. She uses an app to send additional information about the food she eats.

She lets friends and co-workers at United Steelworkers of America offices such as Erin Price, 23, of Downtown see almost everything but her weight, even though Bauer is celebrating the loss of 75 pounds in the past year.

Bauer said she's not bothered that the company knows her intimate details or that someone else might find them out.

“The way I look at it, everybody is doing it now. One way or the other, you're being watched constantly,” she said.

Even though most users hide the details of their lives from all but friends or maybe themselves, Fitbit collects and keeps every piece of information. The company did not respond to Trib questions.

Wearable biometric devices are popular among people who want to track the minutia of their daily lives — steps taken, calories burned, meals eaten.

Four friends at Carnegie Mellon started working on the idea more than 20 years ago and formed BodyMedia, a company based in Gateway Center, Downtown, that makes an armband device to record and transmit 5,000 data points per minute. Users can record more information in an online diary.

BodyMedia has a straightforward privacy policy : All data belong to the company and it pledges not to make anyone's individual identity readily discernible to third parties. Users opt in by wearing the device and opt out by taking it off.

Jawbone, which markets a biometrics bracelet called UP, purchased BodyMedia last year for $110 million.

“At Jawbone, we respect the privacy of our users — and we are stewards of that data. As such, Jawbone adheres to industry standards when it comes to protecting data and personal information,” a spokesman wrote in an emailed statement.

Jawbone develops aggregate reports from its users' data: Mondays are most popular for workouts; women in Paris bike, while those in Miami dance; and UP users in Washington lost 29 minutes of sleep on the day of President Obama's second inauguration.

Governments and businesses can use aggregate data to make important decisions, such as how to intervene to prevent Type 2 diabetes, said Chris Kasabach, one of BodyMedia's founders. He heads the Watson Foundation in New York, named for IBM's founder, and said he cannot speak on behalf of BodyMedia.

“We're essentially beacons endlessly giving off information,” he said. “All of these signals can be collected, providing rich contextual information about what's really going on in the lives of individuals or populations.”

Andrew Conte is a Trib Total Media staff writer. Reach him at 412-320-7835 or andrewconte@tribweb.com.

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