I sit with a young entrepreneur in the workspace of several startup businesses, my eyes fixated on a laptop screen. A large bar graph occupies most of the monitor. On the right, a headline reads “reports” highlighting the busiest day and the busiest hour. Just above the reports is an ever-fluctuating number. First 70, then it bounces to 76 and suddenly a quick jump to 82. I’m watching a live report in the office of Physicalytics in Ryerson’s Digital Media Zone at Yonge-Dundas Square. The numbers on the screen represent each person who walks in or out of the building at 10 Dundas St. E. That is, as long as the person is carrying a smartphone.
Physicalytics is a small analytics company that collects data for businesses by scanning a person’s smartphone to map their whereabouts. Three of the five team members started out at Ryerson; some have yet to graduate. At this office just on the edge of Ryerson’s campus, these young minds have created sensors that can fit in the palm of your hand. With a smartphone’s Media Access Control (MAC) address the sensors are able to pick up not only how many enter and leave the building, but also how long they stay. They can tell how many people are repeat customers and how many are new to the building.
This is a service for businesses interested in collecting this type of data. The company has collected about 20 clients within Toronto’s core. So far, Physicalytics has also extended to international markets by selling its services in South Africa and Brazil.
“What we do is we sort of look for this unique signature that comes out of the phone,” says co-founder Nathaniel Bagnell, a current business management student at Ryerson. If your smartphone is on and your data card is enabled, you’re contributing to this tracking system.
This information is essential for small brick-and-mortar businesses wanting to target their specific customer base.
By tracing how a person interacts with the store, the retailer can change or modify the layout, window displays, or even merchandise. For instance, by learning if a customer made it to the change room but never purchased the item, the retailer realizes that the problem wasn’t getting the customer in the store, but rather getting her to actually make the transaction itself.
Physicalytics says it provides “ethical analytics.” While it collects data from smartphones, it can only go so far. “We don’t know your name,” says Bagnell.
“We encrypt and scramble your MAC address. The data and location is isolated, so I would never be able to give that cookie-crumb analysis of where you go throughout the city.”
The company claims it values the customers’ privacy, and protects information from every smartphone signal.
That said, it understands why people may be concerned. It’s not the first to virtually follow customers, and others who have done so have got backlash from the angered public.
Last May, Nordstrom publicly announced that it was using a similar smartphone tracking service called Euclid, based out of California. This announcement was answered with public outrage and one week later, all 17 stores removed their tracking devices.
Turnstyle Solutions is another company in Toronto that tracks the location of smartphone users and places sensors in businesses, mostly restaurants and bars. It has the ability to track phone users throughout the city in businesses where its sensors are placed. It can learn, for instance, if you’ve gone to the gym and then gone to a restaurant afterwards, if both the gym and restaurant have Turnstyle’s sensors. The company sells weekly, nameless, aggregate reports to its clients. Retailers can find out where their customers hang out. Knowing this, they can then react accordingly, say by honing in on these routines to create targeted advertisements or sell products that they foresee their customers purchasing.
Some say there’s no harm in this.
“As long as it’s information having to do with the fact that I’m in the store, I don’t have an issue with it,” says Rob Enderle, a California tech analyst. “If they are collecting information about my income level or anything that I would deem inherently private, then I would have an issue with that. But this type of technology typically doesn’t do that. What I’m more concerned with is if the store is collecting all of this stuff and they don’t secure it, and an attacker gains access to it and does something harmful with it.”
Chances are, if you live in Toronto’s downtowncore, own a smartphone or have ever used public Wi-Fi, your aggregated data has been collected and observed.
It’s 7 p.m. in Dark Horse, a trendy Queen West café and, with just an hour before closing, the coffee house is bustling. After ordering an Americano and a croissant at the Queen Street and Euclid Avenue hangout, I sit at a large table.
Directly across from me sits a man and a woman, likely both in their mid-thirties. She’s working on her laptop. He’s on his iPad. I overhear their conversation. They sit discussing the best cafés in the area to do work — a familiar habit of Ryerson students who cram in study time across the city.
“I don’t like going to a coffee shop where no one else is on their computer,” the man says.
The woman responds, “Yeah that’s why I like it here, everyone is usually at work on their computer, and it makes me focus,” she says. “It motivates me to work when I see others working.”
Little do they know, this Dark Horse location uses Turnstyle sensors to track its Wi-Fi users. When logging on to the public Wi-Fi, to my surprise there is no obligatory log-on agreement page — no warning that my IP address is being observed.
According to Brian Lesser, Ryerson’s director of computing and communications services, cafés like Dark Horse may not have to notify users. Turnstyle, like Physicalytics, also prides itself on security privacy, claiming identities attached to MAC or IP addresses remain unknown. But according to Lesser, there’s always a threat. He explains that public concern comes both from uncertainty of which company policies are in place regarding the usage of the data as well as the actual security of the information collected. “I think there’s a great opportunity for abuse,” Lesser says. “There’s evidence that there has been abuse, especially by law enforcement agencies like the NSA in the states.”
But will carefree users favour being tracked over disconnecting? The next time you find yourself logging on to free Wi-Fi, will you ignore the fact that you may be tracked?
First-year Ryerson student Haley Moore doesn’t think so. “I think it’s going a little too far, it’s invading privacy a little too much,” she says. “They can already tell too much from surveillance video, it’s crossing the line.”
But others argue this sort of thing is reflective of the age we live in. “Our world is becoming more digital every day,” says Megan Lewis, also in her first year at Ryerson. “If they’re going to take my information and use it in a positive way and as long as it’s not too intrusive, then I’m OK with it,” she says.
According to Enderle, those who think they’re anonymous are “living in a false reality.” But he thinks that young people aren’t bothered. “As long as there’s no evidence for using the information against them, the more willing they are to provide information,” he says.
You leave the privacy of your home and walk to the café down the street. With a hot beverage in hand, you grab a seat, for an hour of alone time. Your phone vibrates in your pocket.
This story was first published in The Ryersonian, a weekly newspaper produced by the Ryerson School of Journalism, on April 2, 2014.