Fashion retailers are integrating cutting-edge technology into their bricks and mortar locations to create a branded and effortless shopping experience to consumers. There are numerous legal issues that brands should consider before embracing such technology. These issues include consumer data privacy and the rights of publicity.
Several retailers have incorporated RFID chips into apparel items that trigger different devices throughout the store to provide an innovative customer experience. For example, when a consumer with an RFID-embedded item enters one retailer’s dressing room, the mirrors morph into video displays showing looks from the runway and images of matching accessories available for purchase.
Despite the ingenuity and clear marketing benefits, the integration of RFID chips in clothing raises several concerns. Specifically, RFID chips can track the consumers’ location in and around the store. But, if the RFID chip is not deactivated or removed upon purchase, the company risks unknowingly collecting and storing customer data. In the event of a data breach, private customer data could be released, exposing the company to potential liability.
High-tech retailers are also experimenting with "smart mirrors", which are actually cameras that shoppers control using a mobile application. When a shopper tries on an outfit, she can use the smart mirror to snap and save her image. She can download the image, share it across social networks or send it to friends.
The smart mirror interface also benefits retailers and sales associates by directly connecting them to customers. Smart mirrors allow retailers to collect a wealth of data and analyze in-store shopper behavior. But smart mirrors, like RFID chips, raise important privacy issues. For example, a retailer must be attuned to whether the shopper images are permanently stored and if so, retailers should employ proper security measures that control access to the images. Another privacy concern is whether retailers obtain consent from shoppers prior to taking their photograph. Before launching a “smart” shopping experience, retailers should consider the issues raised by these questions.
The retail experience is an ever-changing landscape, and the integration of new technology to track and capture consumer data poses novel questions in the context of the retail experience. While innovative brands are eager to provide consumers with an unforgettable high-tech retail experience, brands should seek legal counsel regarding the potential implications of a technologically enhanced retail store.