BUSINESS

200 Toronto Businesses Tracking Customers Through Smartphones: Report

01/15/2014 01:54 EST | Updated 01/25/2014 04:01 EST
Cultura/Liam Norris via Getty Images

Some 200 retailers in downtown Toronto are using a tech upstart’s technology to track the moves of their customers, according to a report in the Wall Street Journal.

The news comes amid an ongoing debate over how much information businesses should be allowed to collect about their customers without the customers’ knowledge.

The businesses are using a new service from Toronto startup Turnstyle Solutions, which places tracking technology on wi-fi hotspots at participating businesses. That technology identifies and tracks smartphones’ unique addresses, and does so without phone users’ knowledge.

The Journal article focuses on Happy Child, a recently-opened restaurant on the city’s trendy Queen Street West.

Restaurant owner Fan Zhang “knows that 170 of his customers went clubbing in November. He knows that 250 went to the gym that month, and that 216 came in from Yorkville, an upscale neighborhood,” the Journal reports.

Story continues below

7 Household Items That Pose Privacy Problems

Zhang recently launched a line of workout tank-tops with his restaurant’s logo, after discovering many of his patrons visit the gym. Another downtown Toronto restaurant, Czehoski, recently hired a retro 80s DJ, after the tracking technology uncovered that a majority of their customers are over 30, the Journal reported.

Turnstyle Solutions describes itself as providing “consumer analytics for the real world.”

Turnstyle founder Devon Wright told the Globe and Mail last year his company's technology levels the playing field between online businesses, which are able to track their customers, and physical businesses which can’t.

If you are a brick-and-mortar retailer you are getting smoked by e-commerce, and it is based completely on analytics,” he said.

The company stresses that the data it collects is anonymized — retailers don’t see the names or phone numbers of the people whose shopping habits are tracked. Customers who don't want to be tracked can turn off location services on their smartphone, though that will cause some apps that depend on location services to stop working.

All the same, the technology adds another dimension to the controversy over businesses’ tracking of customers’ habits.

Canada’s interim privacy commissioner, Chantal Bernier, said this week that Google has violated Canadian privacy law by displaying web ads linked to a person’s health history.

That follows a complaint from a web user who said Google started offering him sleep-aid ads after he searched online for information about sleep apnea. Behavioural ads are allowed in Canada, but not when they involve a person's health history.

Bell Canada announced last fall it will start selling information to businesses about Bell customers’ TV viewing, internet use and phone use habits. The privacy commissioner said she has received complaints about the new policy, and is investigating.