Most of us know that when we surf or shop online, the pages we visit can be recorded and tracked. That's how websites like Google and Facebook are able to sell us ads ostensibly targeted to our interests.
But while tracking online movements and how that translate into sales is relatively easy online, this level of monitoring is much harder to do offline. Britain's brick-and-mortar shops are having a rough time - as well-known national chains like Woolworths have gone bust, thousands of other stores have closed, and total sales have stagnated in recent years.
Online it's a different story: this Christmas the number of people shopping online was nearly thirty percent higher than last year, with overall Internet sales tripling in three years.
Enter Path Intelligence, a British company based in Portsmouth in southern England, and its new shopping monitoring product. Footpath is in operation in at least ten malls in the UK, and has been sold to seven countries, mainly in Europe.
But, its success has recently raised privacy concerns as well. In the past few months, campaign groups, online discussion boards, and even an American senator have criticized the way Footpath has been deployed.
"Typically a retailer would have 20 to 30 percent of its shoppers buying something, so 70 to 80 percent of shoppers in store don't actually purchase," explained Sharon Biggar, Path Intelligence's CEO. "And that's the opportunity, that's what offline retailers are trying to identify, where those people went, what they looked at but what they didn't buy."
Temporary anonymous identification
Biggar's firm provides that information by tracking customers – or rather their mobile phones – as they go shopping. The system uses a unique signal given out by each phone – rather like a computer's IP address.
"It's called a temporary mobile subscriber identifier," Biggar told Deutsche Welle. "It's just a random number that Vodafone, Orange or O2 ascribes to your phone. And then we're simply passively observing that number as it moves around a particular space."
Using around ten receivers spread across the floor of the average shopping mall, Footpath can triangulate a person's location to within a couple of meters – revealing which shops somone has visited, and even which department.
Path Intelligence charges retailers 39,000 ($49,000) to 77,000 euros ($97,000) depending on the length of time monitored and how much space is being watched.
The major UK developer Land Securities - which has installed Footpath in some of its malls – said the data helps identify which shops are performing well and which aren't, and helps improve the layout by identifying crowd bottlenecks.
However, many privacy advocates are starting to wonder about how secure this new monitoring system is, and if this privacy-for-analytics trade-off is worth it.
"If consumers can't be confident that the regulation protects their anonymous phone location being tracked, then how can they be confident that something far more intrusive won't come along?" said Nick Pickles, of the London-based campaign group, Big Brother Watch.
"And before we know it – technology moves much, much faster than the law - and consumers are the ones who suffer, and everyone's sat going: why wasn't the protection in place first?" he told Deutsche Welle.
Similarly, Sen. Charles Schumer, a Democrat from New York state sent a letter to Biggar in November asking detailed questions about the service.
"A shopper's personal cell phone should not be used by a third party as a tracking device by retailers who are seeking to determine holiday shopping patterns," he wrote.
In the US, two malls halted using Footpath after Schumer raised concerns, while two American retail giants, JCPenney and Home Depot, are still considering its use.
Fewer privacy protections in the offline world
However, since last May, in the European Union, websites are required to give clear consent for all cookies - the bits of computer code that track, store and transmit this type of information online. Oddly, no similar legislation currently exists for the physical world in the United Kingdom or across the 27-member bloc.
"I would say it's innocuous compared to a cookie," Biggar said. "A cookie is actually downloading something onto your device, it's actually physically changing your device. We are in no way interacting with your device whatsoever. We make the very definite statement wherever our system is located that we put up signs and we inform shoppers that this is going on."
One shopping mall where the Footpath system is in operation is Cardinal Place, in central London. However, while there is a metal sign 25 centimeters (9.8 inches) across, it only faces shoppers as they leave the center.
An informal survey of shoppers suggested that few had ever actually noticed the sign. While most people didn't seem to mind it, others did have some privacy concerns.
"If it's being used simply to get information on footfall numbers, that kind of thing, then I don't think it's a particular issue at all," said one man, who declined to give his name. "I think if it was tracking individuals, so they could actually work out where you were going then I might be a bit concerned, but if it's clearly anonymous, then I don't think it's an issue at all."
There is still concern that mobile network operators could link the temporary mobile subscriber identifier with an actual telephone number and then, an individual.
Future use for crowd control
Meanwhile, Path Intelligence is looking into applications beyond the shopping mall – to improve the flow of crowds at rock concerts, and even tracking people in refugee camps.
However, the company says it takes privacy seriously. Biggar added that her company was asked to help find suspects after the riots last summer – which affected shopping centers across the country.
"The mall owners in particular were keen that those criminals be brought to justice," she said. "But however, we weren't able to help them at all, because we change all of the numbers, there's no way we could link a number back to an individual, so in that case we were both protecting the privacy of shoppers, but also unfortunately also of criminals."
Author: Robin Powell, London
Editor: Cyrus Farivar