Nordstrom Shoppers Tracked By Euclid Using Smart Phone Data, Customers Concerned About Privacy Issues

The department-store chain Nordstrom is reportedly facing outrage from customers after installing a technology in select stores that collects information transmitted from shoppers’ smartphones to track their movements while they shop.

According to a CBS affiliate in Dallas, Nordstrom has begun using a technology invited by the tech startup Euclid Analytics to cull data from customers’ smartphones in 17 of its stores nationwide, including stores in Dallas, Denver and Portland, Ore. The retail giant, which began as a shoe store in Seattle and has expanded to include 120 department stores across the country, is among 100 companies employing Euclid Analytics’ service. Home Depot is another.

According to the New York Times, Euclid outfits its client’s stores with Wi-Fi antennae capable of tracking the habits of Wi-Fi-enabled phones that enter the store or simply come within range of the store’s Wi-Fi signal, although Nordstrom has said it does not collect data from smartphones outside of its stores. Euclid has already reportedly tracked more than 50 million devices in more than 4,000 different locations.

The process -- which has already raised privacy concerns from shoppers -- enables Nordstrom and other Euclid clients to glean information about when foot traffic is the heaviest, whether customers leave without making a purchase, and if they return to the store. If a store has more than one antenna, it can even monitor which departments and aisles customers are moving through.

Although Nordstrom placed printed signs in some of its stores notifying customers that “Nordstrom is using Euclid to gather public-broadcasted information your Smartphone or Wi-Fi-enabled device sends out when it’s attempting to connect to a Wi-Fi network,” many shoppers told CBS that they were unaware of the tracking and considered it invasive. Jen Modarelli, a senior executive at the digital marketing agency White Horse, wrote in a blog post that customers were also likely turned off by the letter’s “geek-speak” and that the note was not transparent enough to allow most customers to “make an informed decision about the implications of Euclid.”

"I feel like it's an invasion of my privacy," said Jill White, a patron at Cherry Creek Mall in Denver. "Now that I know they're tracking me, I'm a little less likely to shop in their store.”

"If it was without my consent, I would be really bothered by it," another unidentified shopper told the news outlet.

Tara Darrow, a Nordstrom spokeswoman, said that the tracking did not allow the store to see any personal information connected to the phone. “This is literally measuring a signal. You are not connected to the signal,” Darrow said, adding that the company hoped that the information would lead to a better customer experience.

Will Smith, Euclid’s chief executive, said that the company filters all of the information it aggregates and is careful to withhold anything personal so that its clients are not able to target individual customers. In a February interview with Tech Crunch, he added that he hoped it would be able to answer some basic questions about shopping that, up until now, have gone unanswered, including “Why do lines exist?”

“It’s just been in the last three or four months that we’ve gotten down to some of the most fundamental questions about retail -- questions that have been around since the dawn of retail but haven’t been answered,” Smith said. “With enough information about demand, they don’t need to exist. It’s making the shopping experience a lot more human. It’s real service through data.”