A number of Nordstrom stores have been quietly tracking customers' smartphones to determine how long they spend in stores, where they go and whether they are repeat customers, a new investigation has revealed.
And as a result of this investigation by our Scripps sister station KMGH-TV and several other media reports in recent days, Nordstrom has just announced it is ending this policy.
How it Worked
Nordstrom says it installed a trial program in a handful of stores in recent months, to use the Wi-Fi signal on customer smartphones to find out where they were in the store, what they were looking out, and how long they shopped.
Nordstrom tells WCPO.com this program was not in the Cincinnati Nordstrom, or any other Nordstrom or Nordstrom Rack store in Ohio.
Customers interviewed in stores where it was set up said they knew nothing about the tracking because signs were often hard to find.
"I feel like it's an invasion of my privacy," Jill White, a shopper said.
"If it was without my consent I would be really bothered by it," said another shopper.
"I think it's outrageous," said John Soma, a privacy advocate. "What are they going to do with that data? Are they going to keep it forever? Are they going to aggregate it? Are they going to sell it to affiliates? We just don't know. That's what's so troubling to me."
Company Defends System
The tracking system is set up by a company called Euclid Analytics.
The system tracks the Wi-Fi signals from smart phones to determine how long and where in the store customers shop. Nordstrom and Euclid representatives say they were just trying to determine busy areas, so the stores can have proper staffing and determine what areas interest shoppers. The equipment, which tracks an individual mobile device’s MAC address, can also show if the shopper is a repeat customer.
Euclid said customer privacy is important to the company and the tracking system does not attempt to identify individual shoppers. It provides aggregate data to stores and shoppers can opt out by turning off the phone's Wi-Fi, Euclid spokesman John Fu said.
"Well, we don't actually identify consumers," Fu said. "We never know the name or identity of a particular consumer, so you know, we don't identify the names of our clients either."
But shoppers were not even aware the tracking was happening, and the signs at Nordstrom were difficult to see.
A Nordstrom spokeswoman now says the store is discontinuing the program in stores where it was installed, due to the media coverage and shopper outrage, and will not add it to any additional stores.
But it would seem that in this high-tech world it is just a matter of time before other retailers experiment with similar tracking programs.
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