Natasha Wallace, Sarah Whyte
September 15, 2013
The Age
Retailers are targeting individual customers for extra services or products by tracking their shopping habits, such as whether they drink alcohol or when they get petrol, raising serious privacy concerns.
Experts warn that the emergence of so-called “big data” is leading to people being individually identified even though the information was originally anonymous.
Retailers – including Woolworths, Coles and Target – track shoppers’ habits through loyalty cards. Woolworths recently said in an industry publication that it had managed to “overlay” its insurance company’s car crash data base and its Everyday Rewards statistics to reveal which consumers were best to target for insurance.
“Because, you see, customers who drink lots of milk and eat lots of red meat are very, very good car insurance risks versus those who eat lots of pasta and rice, fill up their petrol at night, and drink spirits. What that means is we’re able to tailor an insurance offer that targets those really good insurance risk customers,” Woolworths Ltd director of group retail services, Penny Winn, told AdNews.
Ms Winn sits on the board of Quantium, a data analytics company, in which Woolworths took a 50 per cent stake in May. Woolworths “shares” its anonymous data with Quantium, which sells it to its clients for direct marketing.
Last week, the managing director of Pulse Marketing, Lauren Fried, said on ABC’s Gruen Planet: “Our clients are buying data from supermarkets; we are using that data to target our marketing campaigns. If we are buying Coles and Woolworths data, I can tell you they are doing a lot more with their data than we are.”
Big data is the buzzword used to explain combining massive data sets, which tech bloggers claim will change our world.
Privacy lawyer Alec Christie, a partner at DLA Piper, said privacy laws were inadequate when dealing with “re-identification” from big data.
“Coles have over 700,000 of us that have signed up to Flybuys, that collects an incredible amount of information. Woollies is the same. Even if it’s anonymous, the issue with big data is you can now pretty much identify people once large data sets are analysed together. You can combine the data in such a way that you can work out who the person is. You can often re-identify the data and you can track individuals,” Mr Christie said.
Cameron Boog, director of a specialist intelligence firm, Infoready, said companies such as Myer were sending out targeted promotions to their loyal customers through “sectors”. If a female customer only buys high-end fashion, the advertising sent via email, phone messaging or regular post will target her taste.
Last year, news broke of how data analytics by Target in the US enabled it to identify which customers were pregnant – and even what trimester they were in. It famously sent coupons for baby products to a teenage girl whose father, unaware she was expecting, angrily confronted a Minneapolis store manager.
David Vaile, the vice-chairman of the Australian Privacy Foundation, a collective of academics and legal experts, said consent sought by companies with loyalty cards was a “sham”. “Does the customer actually know what is going on? Probably not,” Mr Vaile said.
“The whole point of big data for this purpose is not statistics, it’s not aggregated, it’s [for] tagging to an individual. The name [of the individual] is sort of irrelevant. If they can get other means of identifying you, knowing it is you, they want to get inside your head to know what you are susceptible to, who you would trust.”
A spokesman for Choice said: “If you are worried about being personally identified, don’t sign up to the supposed ‘rewards’ program[s].”
Woolworths and Coles maintain there is no way individual customers are identified through loyalty programs. “All data provided to Quantium is de-identified. De-identified data means it cannot be traced back to an individual,” a Woolworths spokeswoman said. “In addition to these data security measures, Woolworths and Quantium agreements on data usage specifically prevent any attempt at re-identification.”
A Coles spokeswoman said the company did not sell its data at all but “shared” it with suppliers.
“Any anonymous and aggregated data we share outside the Flybuys program is delivered in a way that cannot be matched to individuals.”
The director of Quantium, Tony Davis, said: “We follow best practice with the highest regard for privacy. All data shared with us is de-identified. There is no way to re-identify customers from the data we receive.
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