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INDUSTRY OPINION: In-store customer experience and data privacy issues

As retailers adopt new technologies to enhance in-store customer experience, Ben Hughes, senior associate at international law firm Bird & Bird, discusses these new technologies and associated legal issues.

Retailers now generally accept that disruptive technologies do not need to spell doom for ‘bricks and mortar’ stores. Consumers still enjoy going to the shops and, in particular, want to see, touch, smell, taste and try products before they buy.

So what disruptive technologies are helping retailers reinvent the in-store experience? What are the legal issues that the retail and consumer companies should be aware of?

Here is a snapshot of some of the innovations available to retailers:

Augmented reality (AR)

AR technologies allow retailers to create highly immersive customer experiences and also help bridge the gap between online and in-store shopping experiences. For example, the founders of Yihaodian, a Chinese online grocery store, have set up ‘virtual shops’ in urban public areas that, with the help of AR and Yihaodian’s mobile app, enable customers to browse, shop and then have groceries delivered directly to their homes.

iBeacon

Apple’s iBeacon technology uses Bluetooth low energy to connect consumers’ smartphones with hardware transmitters installed in-store and carries out functions that include offering consumers special deals and enabling mobile payments.

Radio-frequency identification (RFID)

RFID technologies use electromagnetic fields to identify and track objects. Smart shelves, equipped with an RFID reader, can now continuously scan RFID-tagged items and notify back-end systems about the location of items, identifying any that are misplaced and update inventory systems accordingly.

Just walk out

This Amazon initiative proposes to use computer vision, sensor fusion and deep learning algorithms in order to automatically detect when products are taken from or returned to the shelves, meaning that Amazon can run convenience stores where consumers bypass the check-out process entirely and are charged automatically via an app.

Although these and other similar technologies enhance customers’ in-store experiences, they also raise data privacy concerns because they rely on the processing of consumers’ personal data. Retailers who collect personal data in the EU must comply with the extensive obligations that EU data protection law imposes, as well as respecting consumers’ broad rights.

Retailers and those involved in deploying innovations of this kind also need to be aware that, in the EU, there is a general absence of legislation that regulates the ownership of data. There are laws that can provide protection in relation to some types of data and datasets – such as copyright, database rights and rights in confidential information – but ‘monetising’ the use of data under such innovations is not legally straightforward.

  • Ben Hughes is a senior associate at international law firm Bird & Bird

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