'Big brother' technology comes to Australia's shops
A powerful new technology is giving bricks-and-mortar retailers access to more information about Australian shoppers as they move around the physical world, and shoppers might not even know about it.
For years, online retailers have been learning about their consumers by analysing their internet traffic but it's been impossible for bricks-and-mortar retailers to track shopping patterns in the same way.
Until now that is. New technology is giving retailers a clearer picture of what consumers are doing in the physical world by turning mobile phones into virtual tracking devices.
Retailers and other businesses with high foot traffic - such as pubs, cafes and restaurants - are increasingly offering free access to wi-fi networks and asking consumers to grant access to their digital data in return.
Retailers are then collecting, collating and analysing data about shoppers' gender, age and browsing habits.
It's an exciting development for retailers but one that some experts say consumers should think twice about.
Many shoppers might not be aware that logging on to free wi-fi is giving the corporate world access to their data, says Australian retail and consumer behaviour expert Brian Walker.
There is a "Big Brother" element to the technology, he admits.
"There could be some ramifications once shoppers understand this. I wouldn't be surprised if there was some sort of revolt as the realisation hits."
Consumer advocacy group Choice warns that digital data could be the new battlefield between shoppers and retailers.
"Most people don't realise that such services that are advertised for free can cost you a lot in terms of being targeted with advertising," says Choice's Tom Godfrey.
The largest and oldest retail property in Australia, the Queen Victoria Building in the heart of Sydney, has carried free wi-fi networks since September 2012 to attract more customers.
Research shows free wi-fi keeps shoppers in the centre longer and helps management build a rich customer database for marketing purposes.
The latest retailer to follow the trend is Australian shopping centre juggernaut Westfield, which also owns retail malls in the US and UK. Westfield has just rolled out free wi-fi networks across 21 shopping malls in Australia. As shoppers log in, Westfield will collect data.
Beginning later this year, it will use that data to deliver personalised offers to shoppers' mobile phones as they walk in and out of stores, says John Batistich, director of marketing for Scentre Group (Westfield Shopping Centres).
"We want to use the data to send out compelling news, offers, fashion content and information on events from later this year via a partnership with Optus," Mr Batistich told the BBC.
Mr Batistich says Westfield completed two shopping mall trials recently, which tracked between 2,500 and 3,500 wi-fi sessions a day.
For now, the technology doesn't let Westfield track where or how much money shoppers spend but as people increasingly use their mobile phones to make purchases, that level of detail will also be available, he says.
The technology was developed by Australian company SkyFii. Chief Executive Officer Wayne Arthur says the free wi-fi-data swap is a fair exchange and shoppers can unsubscribe from the network at any time.
"We'll be adding value to the consumer when they give up their information, which will provide them with a far more personalised shopping experience," he says.
Mr Walker says businesses are rushing to gather data and learn how to interpret it.
"From a branding perspective, this move provides enormous value to Westfield and others, giving them the ability to create far more tailored marketing than ever before."
Data collection and analysis also opens up the potential for new revenue streams, he points out.
"Whether Westfield on-sells the data is another matter entirely. This could well be a very concerted effort to make more money."
So how can consumers protect their data? Technology expert Rob Livingstone says everybody should check the default privacy and location settings on their mobile devices and apps and change them if necessary.
"The bottom line is, if it's free, you are the product and your privacy is the currency."