Why Even Your Local Grocery Store Wants Your Digital Data（Why Even Your Local Grocery Store Wants Your Digital Data）

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It's happened to all of us, you go to the store stocked up on
groceries, household goods, oh, a new candle, and it's on sale?
Sure, I'll throw that in my car. You go to check out the swipe
your card had home, settle up on the couch and wait a second.
Does that not for candles? In fact, that's the exact brand I
just bought? How did they do that? We are able to show
targeted advertising that's relevant to people,
we obviously have advertising. We're an ad supported model. But
again, we collect less data than our peers. We're just allowing
private companies to monitor us left, right and center
for most people very familiar with meta Facebook, and YouTube.
But the successful business model of those powerful
platforms has really triggered a kind of wild west, you know,
digital data, gold rush.
At this point, data collection is a fact of life, from browser
cookies and Amazon Prime to hyper specific Facebook ads. The
modern consumer is giving over more and more data every single
day. But what if we told you data collection goes beyond
social media? Beyond ecommerce, you're collecting that data what
people purchase online, actually, if they share it with
us, that it's more a part of your everyday life that most
people realize
it's a total monetization of every aspect of our lives that
we didn't ask for, and that we really have very few ways to
escape.
What if you're giving over your valuable data, the moment you
step in a store,
walking into a store, there's a camera tracking my face, there's
Wi Fi or beacons tracking my movement through the store.
When you go shop for groceries, the grocery store is shopping
for your data. Now,
the federal government might be stepping in on behalf of
consumers.
Imagine a futuristic city where the in person shopping
experience is completely transformed. Where every
billboard and bus ad is personalized just for you. Were
clipping coupons is a thing of the past. And instead they
materialize in your hand the moment you step in front of a
product. A world where store knows exactly what you want
before you even step through the door. They know your age,
gender, race, what size shoes you wear, your favorite baseball
team, your movie night snack preference, they can even figure
out if you're pregnant. It may sound like something out of a
sci fi movie. But it's actually happening right now. In the US
to millions of shoppers at some of the country's biggest
retailers,
retailers today are doing just about everything they can to get
as much information about you as possible, because that's a whole
new revenue stream for them. It
feels like data collection is something that we all know is
happening but can't escape. A study out of the University of
Pennsylvania, about 79% of Americans feel they have little
control over what marketers can find out about them. And over
half 52% felt that they didn't hand over their data, they
wouldn't get the discounts they want. And even worse, that same
survey found the majority of Americans don't know the extent
of what companies can do with their personal data.
The moment you step into the store, often even before you
enter the store. There's all sorts of devices and
technologies that are being deployed nowadays, to actually
track customers understand that behavior.
In the world of data monetization, there are three
major categories of data that are collected. The first is
personal data, things like birthdays, age, name and
address. The second kind of info is demographic data, things like
socioeconomic status, education, Age, Group, and income. And
third is behavioral data. These are traceable actions a retailer
can collect such as product preference, purchase history,
internet browsing, and how much you're willing to pay for
products. That data collected by companies directly from you is
called first party data, and retailers are sitting on troves
of it,
they can then turn around and sell it to a lot of different
companies who are maybe using your say, Disney plus email
login in order to tie you together using that email
address identifier.
Now, the world of data acquisition is huge. Some may
call it a kind of wild west. But for now, let's focus on
retailers. How does my local supermarket get my data, there
are several points where data is collected. These are called
touch points are moments when you are giving over information
to a company whether it's knowingly or unknowingly. One of
the biggest touch points for retailers is the most obvious
one. One
of the biggest culprits in retailer data collection is
those loyalty programs. To sign up for one of those you have to
give your name, your date of birth, your email address or
phone number. And then subsequently you are
incentivized every time you go and shop at this particular
retailer to enter in all the information to identify yourself
and there so one of the most prominent ways in particular
right now that companies are figuring out how to monetize
data. Every
time you swipe your loyalty card to collect those points. You're
being tracked your purchasing being connected to your profile,
and that data is being used to analyze your behavior. further.
Now many people opt to not use a loyalty program, saving
themselves from having to hand over that information directly.
But even something as simple as downloading, the store's app can
be a touch point. other touch points might be happening
without you even realizing things like geofencing
connecting to ensure Wi Fi, even location tracking.
And they definitely have cameras in stores that are watching
people's bodies and which aisle they're in. And if they're
getting confused with this item below to send a customer service
rep.
A lot of stores nowadays are using cameras with facial
recognition to identify or re identify customers. Sometimes
they might even use the store Wi Fi, that even if you don't
connect to just the fact that your phone is in the store, your
phone has an identifier, Macy's
target Walmart, even Home Depot implement location tracking in
one way or another sending location specific push
notifications, implementing guided maps into their apps. And
even using cameras and AI to analyze the shoppers path
through a store. One of
the things that I talked about was what how Walmart has
completely changed the game around how they're doing
delivery, given the geofencing features, their IoT, essentially
inside the store wakes up make sure that things get back fresh
and is ready for delivery.
So you've made your way through the store, got your groceries,
and now it's time to checkout. This is where most people assume
they start to hand over their information. But they may not
realize how much because retailers don't stop at name,
email and phone number.
They know what you bought, what you look for, you know, they
they're able to use, you know, big computers to analyze what
you're willing to pay what you're not willing to pay when
you buy. But let's
say you choose not to sign up for a loyalty program, you don't
give an email or a phone number, you don't have the app, you've
done everything possible to protect your data. Well, that is
until you pull out your credit card, the
credit card you're using or the debit card you're using is being
tracked. So they know that this card has been used for purchase
in the store, even in the past, for example, and they can tie it
to previous purchases. Your actual purchase data is all tied
into that. So the exact items you purchase, at what price
whether you use a coupon or not whether you got a discount on or
all of that is feeding into the sort of customer profile.
But what if I pay with cash? Well, people plan for that too.
A lot
of stores will even at checkout, ask you for an email or ask you
to you know scan a QR code to get a digital receipt. I'm at
the checkout of paid maybe I even paid with cash but I scan a
QR code, get a digital receipt in my browser. And now my device
is connected to my customer profile. So in just
one shopping trip, you may have given a company or companies a
lot more information about you and your habits and you realize,
but what are they doing with it? Well, short answer is it
depends.
Most Out of was and still is initially used for consumer
insights. Much like social media algorithms, retailers want to
bring shoppers in by tailoring the experience to consumers
wants and needs.
The better I know my customers the more I can sell to them, the
better I know my customers the better experience I can give to
them. The better I know my customers, the more services I
can sell to them in addition in addition to what I do, and
lastly, the better I know my customers the more revenue I can
generate.
In the past data acquisition commonly meant a company
collects your information via third party methods like browser
cookies or buying your information from a data broker,
a data brokers a company that specializes in collecting a
person's information, then turning around and selling it to
third parties. Axiom Experian and CoreLogic are examples of
notable US data brokers. Well, data brokers still play a large
role in the information collecting ecosystem retailers
have started cutting out the middleman. Every
company today is a Data Broker. Your local grocery store is a
Data Broker. You know, you know your drugstore is a Data Broker.
Your retailer is a Data Broker, certainly everywhere you go
online, their data brokers.
In 2021, the Data Broker market was valued at an estimated $319
billion dollars. That number is expected to surpass 545 billion
by 2028. According to PwC, retailers can expect to see a
three to 5% margin increase by investing in data monetization.
You've
seen Macy's and BestBuy, Sam's Club, a bunch of companies are
turning around and taking the data that they happen to know
about you and making a new revenue stream out of it by
selling it to other companies.
By cutting out the middleman retailers get more say on how
and where their customers data is used, opening up an entirely
new revenue stream. But then that poses the question, what
are retailers doing with your data? Well, the first and most
obvious answer is one most of us run into every single day.
A lot of data ends up being used for the targeted ads that we see
every time you load a webpage or scroll on our social media feed.
You know if you pay attention to the next time you load a web
page, it's usually a bit of a lag between the cons meant
loading and then the ads loading. Because in that moment,
there's a huge auction happening way behind the scenes that you
don't know about where people are slinging your information
around. So
this leads into another way retailers are monetizing data,
retail media networks, or retail media network is a network of
advertising infrastructure that retailers offer to third
parties. This could be in store through apps, websites, even
smart TVs. Today,
every you know, major supermarket and retail and
dollar store chain is in fact engaged in digital marketing
through these retail media networks.
Retail media networks set up a tit for tat relationship between
advertisers and retailers, advertisers get direct access to
not just shoppers but their data as well. This valuable first
party data allows advertisers to avoid using third party
identifiers like browser cookies. And in turn, retailers
offer more discounts click ad revenue, and narrow the gap
between ad spend and sales. In 2022, the global market value of
retail media networks was valued at $18.8 billion. So
if I said your T shirt, I maybe have a 30% profit margin on it.
But if I show you an ad for Hershey's that really wants to
target you, because you fit a certain customer profile that
they wanted to target. I basically have 90% margin on
that, because I'm basically being paid to show you an
advertisement. And
it's not just advertisers that are getting a slice of the data
pie. Many retailers like WalMart provide data to suppliers. This
leads into a larger conversation about company partnerships.
Every
company works with every other company. So your local grocery
chain, for example, has partnerships, you know, a myriad
an avalanche of partnerships with platforms and data brokers
and media companies and advertisers, you name it.
Retailers are also partnering with brands utilizing things
like slotting fees where brands might pay a store to be placed
eye level making shopper more likely to pick a big brand
product over competitors. This practice has evolved in the era
of online shopping, the kinds
of brands that you might see, when you get when you look at
your app to get your loyalty discounts, for example, those
brands have paid to be there to reveal in the forefront paying
to get access to you, but also sharing data about you in
various ways.
But how is this all legal? Aren't there privacy laws that
protect consumers? Well, some data is protected, meaning it
can't be sold. But it can be shared.
They've developed the kind of technique which they think gets
them around privacy laws, and it's sharing. Everybody
collaborates with everyone else, everyone partners with everyone
else. So your grocery store is not selling the data data
brokers might sell some data to grocery stores. But grocery
stores are partnering with a whole bunch of companies in
order to kind of pull the data. So
let's say you shop at grocery store a in grocery store a is
set to merge with grocery store B. Now you've never actually
been to grocery store B but a merger would mean grocery store
B would also have access to all your data. Every purchase every
card swipe every coupon every time you grab discount chips
over namebrand. Now let's add a third party. Say you sometimes
order groceries through mobile shopper, and mobile shopper has
a data partnership with grocery store B, meaning grocery store B
could be getting your data from two sources without you ever
having stepped foot in the store. It's not a hypothetical,
it's actually happening right now between Kroger, Albertsons,
and Instacart. While this may seem like at worst, an inbox
full of junk mail and a slight annoyance, data partnering can
have huge implications. When does private companies data
protections fail? What we've
done over the last 25 years basically, is allow all these
big data companies and big media data companies to get bigger.
And so consequently, when there is a breach, right? They have so
much data, it's very hard for them to protect all that data.
And it goes beyond that. Because you don't need your data to end
up on the dark web for it to be used against you. Once it's out
there can be bought by insurance providers, law enforcement,
banks, even the government. When
you're applying for a job or applying for a loan, some of the
checks that companies may do on your record can include data
that you had no idea that could have access to that's a really
big concern when it comes to people's financial health and
employment opportunities is what data is being used to make
decisions about me. Is it data that's correct. Is it data that
I have any opportunity to see and practice it is wrong?
In big box stores aren't just grocery and retail. They're also
becoming pharmacist, health care specialist optometrists. They
know if you're on food stamps, if you're a veteran, if you're
pregnant, if you have kids.
So there are public health and privacy, you know and consumer
protection issues that are implicated by the explosion of
data tactics that the grocery stores are using today.
So what can consumers do to protect themselves? Well, first,
you can simply choose to opt out of many of those data sharing
touchpoints. Taking
opportunities when you can to find ways to opt out of staff is
a really powerful tool that you can have been very wary of
loyalty programs, looking at privacy policies of different
services can tell you a lot about what they intend to do
with your data. If that privacy policy is really vague, then you
should try your best to stay away
ultimate way to not be tracked as to go analog, which in
practical terms means when you walk into a store, you might
want to turn off your Wi Fi, put your phone into fight mode so
that you don't being tracked by beacons, or by the store Wi Fi.
But
even then, understanding what you're agreeing to or how you
can protect yourself can be overwhelming.
There's a reason that the way that you figure out what rights
you have on your data are buried on page 17 of privacy policies.
Right now, this idea that you are able to opt out of data
sales is kind of absurd, because it would take a huge amount of
your time and energy to actually locate how you're supposed to
submit these requests, and then actually take the time to do it.
And
what about my data that's already out there? Well, that's
a bit more complicated.
Right now. We as consumers have incredibly few legal protections
around data collection right now, companies can pretty much
collect whatever they want about us and do whatever they want.
Remember that UPenn survey we mentioned earlier, well, of the
Americans surveyed, nearly 80% said Congress should act
urgently to regulate how companies can utilize personal
information. Despite this consumer data privacy laws
really only exist on the state level. Right now, only 13 states
have passed comprehensive data privacy laws. And of those 13
Only California, Colorado, Connecticut and Virginia have
laws that are currently in effect.
We really need data minimization. And we need
purpose specification, that means that companies can do
whatever they want. And right now, it's very unfortunate that
industry groups tech groups, the advertising industry has a lot
of say over how those bills have looked.
On the federal side, there are several data privacy laws, but
they are a hodgepodge of different laws that only focus
on one consumer group or one set of data. There currently isn't a
singular law that focuses on consumer data protection as a
whole.
We can, as citizens in particular asked for real
regulations, we can let our lawmakers know that this system
is horrific, and it's just not something that we really want to
even just be a part of.
That's not to say there's been no movement on the federal
front. In June of 2023, the FTC refiled a previously dismissed
lawsuit against Data Broker co Chava. alleging the broker sold
geolocation data that tracks sensitive info on millions of
mobile devices without users knowledge or consent. Could
Trump have filed a motion to dismiss the complaint calling
the allegations hypothetical and says the FTC is claim is unfair.
Then in September of this year, an FTC official put out another
warning shot at the Data Broker industry, saying that data
maximization model is a serious threat to Americans
constitutional liberties, meaning we could see more action
taken by the federal government against data brokers in the near
future.
There are many groups at risk here, you know, as these grocery
stores have your health information and you know, your
ethnic racial information, so the use of all this data can
have very potentially harmful and discriminatory impacts.
Another reason why we need regulators on the case