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James Tenser

Principal
VSN Strategies

Is Retail Ready for Facial-Recognition Technologies?

November 28, 2012

FROM RETAILWIRE:
Albeit too fast for privacy advocates, face recognition technologies appear to be advancing far enough to finally offer a real solution for retailers. Will the trepidation facing the rollout of facial recognition technologies for retailers outweigh the promised benefits?      [more...]

MY COMMENTARY:

So many fascinating nuances surround the use of facial recognition technology at retail.

One is the potential legal work-around of privacy laws afforded by using "security" cameras to capture images as opposed to systems dedicated for shopper research purposes. The difference may seem like splitting hairs, but in practice they may be more significant—the quality, quantity and location of the cameras, as well as the type of software analytics applied.

Another is very aptly stated by Prof. Fader and worth underscoring here: Retailers barely make use of the data captured today. What do we expect they will do with inputs from this new, more sophisticated, and much vaster data source?

There is also the matter of sunk costs. Cabling up thousands of stores with multiple cameras, backroom servers, and head-end connectivity is a significant capital investment. Retailers don't pay for s*** like this, so the vendors will need to do some careful calculus regarding the payback potential. My prediction is that most systems will be obsolete long before they are fully amortized (just like digital signage).

Finally there is the matter of business practices surrounding facial rec technology. Simply put, there are none. Vendors may propose some tantalizing ways to analyze the data for market research, but putting the data flows to daily beneficial use is another matter. To the extent that retailers work out ways to use this innovation to improve shoppers' success, it will gain their acceptance. Otherwise, it will just be a creepy and expensive waste of effort.

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