Wal-Mart has data on most U.S. adults, and could sell it, charges report

Groups warn of a future in which WiFi and cameras track your movements and facial expressions to customize sales

Published December 3, 2013 8:25PM (EST)

                                  (Reuters/Shannon Stapleton)
(Reuters/Shannon Stapleton)

Wal-Mart may have consumer data on over 60 percent of U.S. adults, shares such data with over fifty third parties, and maintains a privacy policy with “extraordinarily broad latitude in how it gathers, stores, and utilizes information on consumers,” according to a new report from three progressive groups.

“We estimate that Walmart currently has data on more than 145 million Americans,” write the authors, “and, thanks in part to sustained lobbying by Walmart and other online marketers, they are able to continue to gather more data, in new ways, every day with minimal oversight.”

The report, “Consumers, Big Data, and Online Tracking in the Retail Industry: A Case Study of Walmart,” was released last week by the Center for Media Justice (a group committed to “sustain a powerful local-to-local movement for media rights and access”), ColorOfChange (which “exists to strengthen Black America’s political voice”) and SumOfUs.org (“a new world-wide movement for a better global economy”).

As the report notes, competing with Amazon in the exploding world of e-commerce is among the top challenges industry analysts have identified for Wal-Mart, the top private employer in the world. The company has touted its plans to “deliver the next generation predictive analytics platform;” bragged that its targeting team “ingests just about every clickable action on Walmart.com” to “intelligently tease out meaningful patterns so our millions of Walmart.com customers have a shopping experience that is individually personalized”; and told Goldman Sachs that through Sam’s Club membership, “traceable tender” in stores, “identified data” from Walmart.com and “trend data” from other parts of the business and suppliers, “our ability to pull together data is unmatched.”

The report cites a Wall Street Journal story arguing that “the idea of an unbiased, impersonal internet is fast giving way to an online world that, in reality, is increasingly tailored and targeted.” CMJ notes stories showing potential downsides ranging from Staples allegedly offering better discounts online to wealthier areas than poorer ones, to Target tipping off a teenager’s father that she was pregnant by profiling her and then sending her targeted promotions. It also raises the prospect that, like AT&T, retailers could sell customer data to the government as well.

Noting that, prior to backtracking in response to backlash, Nordstrom pursued “using Wi-Fi signals from customers’ smartphones to track their movements throughout the store,” and that other companies are offering or developing software to use in-store video to analyze “facial cues for responses to online ads” or to “deliver custom advertisements” in store based on apparent “age and sex”, the report criticizes Wal-Mart’s privacy policy for failing to protect customers against such practices. The authors charge that Wal-Mart also “appears committed to keeping this arena largely unregulated” by the government, through deployment of its hundred-strong force of lobbyists.

Wal-Mart did not immediately respond to a Tuesday morning inquiry. The Huffington Post, which first reported the paper’s findings, wrote that company spokesperson Dan Toporek “disputed some of the report’s findings, noting that most of Walmart’s stores aren’t Wi-Fi-enabled and that the company doesn’t track shoppers in stores.” Reporter Jillian Berman wrote that Toporek also “said the company takes pains to protect customer privacy and mostly uses customer data and passes it along to third-party sites in aggregate rather than individually.”

ColorOfChange and SumOfUs have both helped organize support for strikes by Wal-Mart employees, who’ve alleged the retail giant pays poverty wages, inflicts erratic and insufficient schedules, and illegally retaliates against activists; Wal-Mart has also faced recent scrutiny over its claimed environmental impact, evidence of bribery in Mexico and elsewhere, and deaths in factories which supplied to the company in Bangladesh.

By Josh Eidelson

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