Term Paper on "Technology and Privacy Duties and Laws"

Quoted Instructions for "Technology and Privacy Duties and Laws" Assignment:

Question

• Evaluate the arguments for and against the use of these technologies. Which do you think are

most compelling and why?

• Do we have a right to privacy? Should we have the same rights in a retail store as anywhere

else?

• Rights are correlated with duties. What duties do you think a market researcher, or retail store

has in relation to information gained in this way? Is it enough to say they are doing their duty if

they do not break any laws?

Method

• Research using textbook, databases, academic journals, newspapers, books and e-books

• Ensure you use a variety of sources.

• Familiarise yourself with referencing formats:

http://www.library.uow.edu.au/helptraining/guides/citing.html

information to read:

Big Brother is watching you…

Dr. Kevin Morrell, ESRC Postdoctoral Fellow, Loughborough University

Summary

An increasingly sophisticated approach to marketing consumer goods has implications for

ethics in research and for our right to privacy. Modern retailing uses sophisticated technology

to observe the shopping process at a level of detail greater than ever before possible. Many

marketing innovations seem designed to influence people's choices on a preconscious level. Is

this something we should accept, as modern, enlightened consumers, or are we drifting

towards an Orwellian society where our every move is watched?

Keywords: market research, point of purchase marketing, ethics, information, privacy

Introduction

Supermarkets have rightly been described as the “…most successful form of retailing ever

devised” (Guardian, 1996, 2). Part of the reason for this success comes from their ability to

offer us a huge range of products at low prices. However, they operate in a highly competitive

sector, and the leading players are keen to get even the slightest form of advantage they can

over their competitors. One source of advantage comes from a very fundamental aspect of

marketing

merchandising. In everyday English, merchandising refers to the selling of a product. More

formally, merchandising refers to activities:

“…which aim to generate customer’s interest in the product or service... The purpose of

merchandising is to bring product and customer into the closest possible proximity in order

that the attributes of the merchandise may become fully apparent and, in so doing, sell

themselves” (Elvy, 1972: 175).

Within the context of retail stores and supermarkets, a particular form of merchandising –

‘point of purchase’ (POP) marketing – is increasingly influential in determining the success

(or otherwise) of particular products, or even stores. The reason for this is that there is a

growing trend for people’s decisions about what they buy to be unplanned, or to be made on

an impulse. Rather than making a list, many shoppers are more likely to choose what they buy

whilst they are actually in a store – in other words, at the point of purchase (Phillips and Cox,

1998). Although advertising plays a big part in marketing products, for supermarkets the

ability to influence choice once people are actually inside a store has become more and more

important. This is the challenge of marketing at the POP.

In its simplest form, POP marketing can involve redesigning displays within a store or adding

more prominent signs in an effort to boost the sales of a particular brand. Alternative

strategies are to introduce promotional pricing initiatives such as the ever popular BOGOF

(buy one get one free) deals. More recent innovations include allying pricing strategies to

‘loyalty’ card schemes. In one sense, initiatives such as these are as old as marketing itself,

but the use of new technology has meant that retail stores, and the market research industry

have more efficient and powerful ways of evaluating the effectiveness of their POP marketing

techniques. In this case, we will look at two ways in which supermarkets and market research

agencies gather information on consumer behaviour, and explore the ethical issues that these

forms of research raise. The first of these, camera based observational research, involves

monitoring consumers’ behaviour as they go through a store. The second, the use of ‘eye

mark’ technology again involves the use of cameras, but these are mounted in headsets which

test shoppers wear. This eye mark technology uses a laser to track the movement of the pupil,

and record the time that shoppers focus on visual stimuli.

Empirical research suggests that many of the decisions people make in a shopping

environment are impulsive, or unplanned (Phillips and Cox, 1998). With some types of

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product, impulsive buying accounts for the majority of sales. This presents a challenge for

researchers because they are interested in behavioural outcomes (i.e. whether somebody will

actually buy something). However, because many of these purchases are impulsive and

unplanned, asking people to predict what they will do is not a reliable way to find out

information about the effectiveness of merchandising. Also, again because these purchases are

impulsive and unplanned, asking for an explanation after the event may often result in a

rationalisation for their choice, rather than the genuine ‘reason’. We know this because other

research has shown that people try to provide reasonable sounding explanations for their

actions if they are asked about them. This seems to be a common human trait. It may be

because we like to maintain an own image of ourselves as consistent and logical, but it is also

likely that asking someone to give an explanation (as market researchers frequently do),

means they will try to construct something that sounds reasonable. All these factors lend an

impetus to research that is based on watching what people actually do, rather than asking

them about it, in other words using observational techniques instead of questionnaires and

interviews. Dodd et al, writing about the field of market research state that, “… there is a clear

need to obtain closer insight through direct observation of individual and group customer

behaviour…” (Dodd, Clarke and Kirkup, 1998). Only by actually observing what people do

can market researchers gain more insight into these impulsive purchases. This quest for

greater insight is fuelled by commercial pressures and its parameters are defined by a highly

competitive sector. For supermarkets, the measure of success is their ability to persuade

people to spend money.

Camera based observational research

Video footage may be used to monitor the overall flow of customers through a store (and to

identify frequently visited parts of the store that are ‘hotspots’, where the sales might be

expected to be larger). Video footage can also be used to look more selectively at the effect of

changing the way a particular brand is displayed. Often, within stores that carry out

observational research (or commission market research agencies to carry it out), customers are

informed by a sign placed at the entrance of the store that filming is taking place. Where

observational research is combined with interviewing, those customers who agree to be

interviewed, may also be asked for their consent to have been filmed. However, in practice

people are often assumed to be consenting to participate if they do not actively object and in

many instances, to all intents and purposes, people are filmed and observed covertly. Many

people may simply not notice signs at the entrance. Sometimes camera observation may be

justified in terms of security. This may seem reasonable if we consider that CCTV

surveillance is used to monitor or reduce crime in many high streets. In the same way, within

stores, cameras may be said to bring enhanced security benefits, which can reduce theft and

improve staff / customer safety (Carrigan and Kirkup, 2001). Even so, it is certainly the case

that cameras have become more commonplace and there may be little indication that our

behaviour in a retail store is being recorded. Additionally, although the market research

society (MRS) does have codes of conduct that relate to all market research, and that are

widely followed within the industry, these do not have the same status as laws because they

are in principle voluntary and self regulated. As Mellahi and Wood indicate (2003: 134), “…a

code of conduct that is unilaterally drafted by the affected industry is likely to lack legitimacy,

and be ineffective.” This could be a cause for concern since camera based technologies are

not adequately covered by current legislation and at present, “…there is no regulatory

framework to monitor the collection, storage and use of information gathered from

surveillance cameras; no law of privacy to prevent the broadcast of video footage without the

subject’s consent” (Carrigan and Kirkup, 2001). This means for example, that there is no law

to stop data ostensibly recorded to enhance security and safety being an*****d for other

reasons. A further cause for concern is that innovation and developments in new technology

can expose shortcomings in legislation, or codes of conduct (consider for example, the current

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debate on cloning animals). All these issues have implications for our right to privacy.

Eye mark technology

As mentioned above, eye mark recorders are small headsets, with cameras mounted in them.

Their aim is to track in the movement of the pupil, which is done by reflecting a laser onto the

back of the eye via a see through ‘lens’. Subjects (who are volunteers, and who are normally

paid) look through the lens and the mounted camera records what they are looking at. When

this footage is played back and an*****d on video, a black dot represents the exact point

where the eye is focusing. By studying the positioning and length of time that the black dot is

stationary, researchers can identify visual stimuli that attract and hold interest – i.e. points of

fixation. For example, research has found that people spend up to four times longer looking at

a more famous brand than they do looking at a less famous brand (Phillips and Cox, 1998).

The number of fixations, and the average length of time spent looking at a particular display,

is a measure of how interesting it is, and in turn suggests the likelihood of it influencing an

impulse purchase, or at least of being noticed by consumers. In turn, this provides a measure

of the effectiveness of any changes to the point of purchase (POP) marketing strategy, or to

the effectiveness of changes to product design.

What is interesting about this form of technology, is that it collects data about stimulation and

attention at a preconscious level. Although researchers will be able to tell which parts of a

display the subject found most interesting, the person wearing the eye mark recorder will not

have the same level of insight, because much of this arousal is not fully conscious. In this

sense, although subjects voluntarily participate, this technology could actually be said to be

more invasive than the ‘traditional’ camera based observational research. Although one would

expect to know which products one actually bought, one may not realise just how long a

product range, or display held one’s attention and interest. However, because researchers can

measure the amount of time one spends looking at particular features, this suggests that they

have access to a level of information beyond that which the shopper themselves has.

Ethical implications

For both these forms of research, the rationale is to find out more about the shopping process,

in order to boost sales. There is nothing new in this underlying goal, but new technology does

raise a number of ethical concerns, particularly when we consider the capability of large retail

stores to subtly influence, and even manipulate our choices. Allied to these innovations in

research is a range of increasingly sophisticated measures which retail stores undertake in

pursuit of profit. For example, stores also collect and an***** other information on their

customers, making use of sophisticated databases which track purchasing habits. These can

then be used as the basis of direct marketing, or to target particular groups of consumers, for

example Tesco segments customers into ‘lifestages’: young adults, older families, young

families, older adults, over 60s and students (IGD, 2002). Many large supermarkets use

artificial smells to heighten sensitivity and arousal, for example piping the smell of freshly

baked bread through parts of the store. Stores use music and lighting to similar effect, and

there is a whole area of research devoted to the effects of such initiatives

‘store atmospherics’. The Guardian (1996, 2) describes the overall effect of this approach as

one where,

“The superstore reduces you to a state of mild sedation, then manipulates your every move. It

even decides what your impulse buys are going to be.”

Advocates of these technologies could point to a number of reasons why their use was

justified:

• If these technologies do help to boost sales, then surely they are just another part of

trying to do good business (and earn money for shareholders)? This enables

supermarkets to keep prices low and at the same time offer us such a range of

products.

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• If these technologies give us greater insight into human nature, then they advance

knowledge, which is the goal of all academic research. They may even shed light on

ways in which unethical practices can be avoided.

• The retailers could argue that the use of these technologies is not illegal and that if

their competitors are going to benefit from them, it would be commercial suicide not

to do the same.

• A related point is that they could claim to be simply refining and constantly improving

the way they sell things by looking at how people actually shop. This could help to

make the task of shopping more fun, and more straightforward.

• People are ultimately responsible to themselves for what they choose to put in their

trolleys and for what they eat. It is unreasonable to blame retailers for offering choice

and selling what people actually want.

• Finally, they could argue that these technologies do not represent a complete break

with the past, but they simply offer a more effective way of finding out the kind of

information the store keepers have always been interested in.

On the other hand, they raise a number of ethical concerns:

• Perhaps the most obvious concern is the issue of privacy, and whether we as

individuals have the right to privacy in a democracy. Why should we be filmed and

studied unless we actively give consent?

• As with any form of information, there are issues as to how the information is

regulated and used. Surely it is a problem if some cameras record our behaviour for

‘security’, but this information is later used for other purposes?

• Since these technologies explore impulsive and preconscious behaviour, they raise

serious concerns not just about invasion of privacy, but also manipulation of

individuals for commercial gain.

• If stores are able to influence our impulsive choices, how do we know that this will

actually be to our benefit – for example, doesn’t this mean retailers will be able to

market products that are actually bad for us, if it results in commercial gain for their

shareholders?

References

• Carrigan M. and Kirkup M. (2001) The ethical responsibilities of marketers in retail

observational research: protecting stakeholders through the ethical ‘research

covenant’, International Journal of Retail and Distribution Management, 11(4): 415

• 435

• Dodd C. A., Clarke I. and Kirkup M. (1998) ‘Camera Observation of Customer

Behaviour in Fashion Retailing: Methodological propositions’, International Journal

of Retail and Distribution Management, 26(8): 311

• 317

• Elvy B. H. (1972) Marketing Made Simple, Allen & Co., London

• The Guardian, ‘Counter Culture’, D. Runciman, (1996), 2

• IGD (2002) Category Management – Which way now?, IGD

• Mellahi K. and Wood G. (2003) The Ethical Business, Challenges and Controversies,

Palgrave Macmillan, Hampshire

• Phillips H. and Cox J. (1998) ‘Point of purchase marketing’, Journal of Brand

Management, 5(3): 186

• 93

Further Reading

• Chryssides G. D. and Kaler J. H. (1993) An Introduction to Business Ethics,

Thomson, London pp. 249