By Arsen Avakian, CEO and Co-founder, CoolerX
While online shopping continues to exceed pre-pandemic levels, the vast majority of retail sales still occur in-store. As such, enhancing in-store environments remains a priority for the industry, benefiting retailers, brands, and consumers.
AI plays a prominent role in these efforts, especially due to its fast-paced development and capacity to transform marketing, merchandising, and customer experiences. AI offers the ability for real-time delivery of highly relevant content and introduces new ways for performance and insight tracking within in-store settings.
However, discussions around retail media and AI often fail to sufficiently address privacy concerns arising from the technology’s dependence on data. For example, some retail tech vendors have showcased facial recognition and camera technologies designed to monitor customer behavior in stores. These technologies raise critical questions regarding shopper consent. The future of AI in brick-and-mortar marketing hinges on the ethical use of data. Overlooking privacy issues might result in diminished user trust and stricter regulations, which will weaken the industry’s ability to effectively use AI.
Embracing Identity-Blind Technology
Considering this, the industry should pivot to “identity-blind” AI technology for in-store marketing, which avoids using personal data and identifying individual consumers. This approach aligns with recent shifts by online marketing giants, including Google, who are moving away from traditional tracking technologies, like cookies, in favor of privacy-forward methods.
Identity-blind technology is the future of in-store AI-based marketing. By avoiding personally identifiable consumer data, we mitigate privacy risks and ensure a safer shopping experience. In support of this direction, here are three essential principles of identity-blind AI technology that our industry should universally adopt to support in-store marketing:
#1: Designing for Privacy
Identity-blind AI solutions for in-store marketing must prioritize privacy from the outset. This means designing technologies that operate without capturing or requiring personal consumer information. Vendors need to ensure that their solutions maintain full functionality while upholding privacy standards. When data collection is necessary, even for analytical purposes, it must be de-identified, hashed, or anonymized. This approach is critical, as it minimizes invasive data collection, thereby reducing the risk of data misuse or breaches. By adopting this principle, retailers, brands, and consumers benefit from a more secure and trusted shopping environment.
#2: Ensuring Security at Every Phase
Very rarely do I hear any marketing technology vendors – AI-based or otherwise — talk about the security measures in place to protect and safeguard their data. As reliance on AI for in-store marketing grows, so does the need for comprehensive data protection. These technologies must incorporate stringent security measures to prevent attacks, including regular external penetration testing, to safeguard data integrity. A well-defined breach response protocol is also essential to address potential incidents effectively. Strong security protocols not only protect data but also bolster consumer confidence in the technology, which is essential for its successful integration in retail.
#3: Visibility and transparency
Transparency is non-negotiable in AI retail technology partnerships, especially for in-store applications. Retailers should expect clear and detailed privacy policies from their technology providers, reflecting their commitment to responsible data practices. These vendors should also support retailers in making appropriate in-store privacy disclosures to customers. Regular independent audits are a key component of this transparency, ensuring continuous adherence to privacy standards. This level of openness is vital in building and maintaining trust across all stakeholders: retailers, brands, and consumers.
As the industry embraces AI to support a more effective in-store experience for retailers and consumers, adopting identity-blind technology will be critical. At the forefront of these technologies is a commitment to consumer privacy. It’s not just about compliance or respect; privacy is integral to the mission of enhancing the brick-and-mortar shopping experience. This commitment goes beyond basic respect—it’s central to all partners’ business strategy. Looking ahead, I hope the industry will prioritize more discussions about the importance of this approach.
