In-store cameras mean more data collection — and greater privacy concerns for customers

This is an excerpt from a story delivered exclusively to Business Insider Intelligence E-Commerce Briefing subscribers. To receive the full story plus other insights each morning, click here.Several retailers are working on using camera and sensor technology to increase the amount of data they can collect on shoppers in-store:Walmart is opening a store augmented with AI. Dubbed “Intelligent Retail Lab,” this experiment is taking place inside a 50,000-square-foot Neighborhood Market grocery store on Long Island, Phys.org reports. It uses thousands of cameras on the ceiling as well as other technology, like sensors on shelves, in conjunction with AI to monitor the store, detecting issues like spills and out-of-stocks. The cameras don't recognize faces, determine ethnicity, or track the movements of shoppers, Mike Hanrahan, CEO of Intelligent Retail Lab, said.Kroger is experimenting with cameras above shelves. The cameras, which are currently being tested in two stores in suburbs outside of Cincinnati and Seattle, are embedded in price signs above shelves, the Associated Press reports. They guess shoppers' age and gender to better target consumers, but the company says that this information is anonymous and not stored.Walgreens is testing cooler doors with cameras and sensors. These augmented cooler doors have been installed at six stores in Chicago, New York, San Francisco, and Bellevue, Washington. They feature a camera located above the door handle and have video screens in place of the usual see-through glass. The cameras are capable of guessing age and tracking irises, but Walgreens says these functions are off. Instead, the doors are reportedly only being used to count shoppers passing by and sense when someone has stopped in front of the cooler.Here's what it means: These technologies have the potential to grant physical stores the same capabilities that e-tailers enjoy by tracking shoppers' activity on their sites.The tech these retailers are testing can gather data on customers that can be used to personalize their experience and target them with ads. If customers can be identified, or even if their characteristics can be noted, then a retailer can tailor its store experience to specifically meet their needs and preferences.For example, the Kroger locations testing cameras have screens attached to shelves that can show ads and discounts, and these could be tailored to characteristics — like gender or age — determined by the cameras. The screens on the coolers Walgreens is testing could be used for the same purpose.The bigger picture: Retailers need to be careful how they implement this technology, lest they alienate customers or draw regulations.In-store data collection using cameras and AI raises serious questions about privacy that can cause concern for consumers and legislators. Many customers may be uncomfortable with having their characteristics assessed by technology, fearing discriminatory practices and intrusions of their privacy, and their worries may not be assuaged by being told that their data isn't actually being recorded.These customers may choose to shop with other retailers that don't use such technology. Furthermore, as this type of tech becomes more sophisticated, lawmakers may decide to rein it in if privacy concerns get out of hand; in fact, it's already grabbed the attention of some legislators.Interested in getting the full story？ Here are two ways to get access: 1. Sign up for the E-Commerce Briefing to get it delivered to your inbox 6x a week. >> Get Started2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the E-Commerce Briefing, plus more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now