Benetton: Tracking Device Is for Clothes, Not People

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Unless consumers start seeing Benetton employees following them out of the store with big antennas, they needn't worry that an inventory-control system soon to be implemented by the clothing retailer will track their every move.

The tracking of an item of clothing will end before the customer even leaves one of the Italy-based retailer's stores worldwide, despite concerns raised by the Electronic Privacy Information Center and several other privacy advocates.

The concern over Benetton's intentions arose this week when Royal Philips Electronics announced its partnership with two other technology firms to provide Benetton with an item-tagging system using radio frequency identification technology, or RFID. The announcement said the system would let the retailer track merchandise with a tiny device embedded in the labels of its clothing.

What followed was a lot of speculation about what the device could or might be used to do. Some privacy advocates suggested it would be linked to the consumer's personal information.

However, a Benetton executive seemingly resolved such concerns by asserting that the device is deactivated at the point of sale.

"What we're really talking about with the radio frequency identification technology is more or less a substitute of what would be included in a bar code," said Terry Phipps, consulting chief information officer at Benetton. "This is not anything radically different than what's already on a Coca-Cola can, and there really isn't another purpose for the tag besides inventory and theft control."

So, for example, the system would not pick up a customer re-entering a Benetton store in a previously purchased garment.

And even if the devices weren't disabled, it would be obvious if Benetton were using them to track customers outside of the store.

"To track people outside of the store we'd have to be 3 feet behind them with big antennas," Phipps said.

Further, Benetton said tracking people who have bought an item is just bad business.

"Nobody is going to shop in a store where his or her privacy is invaded," Phipps said. "To invade people's privacy runs completely contrary to our interests."

He said that the RFID tags were not yet in use at Benetton stores, but he expected they would be by the end of this year.

Though the flap over Benetton and the RFID technology seems to have been blown out of proportion, there is an important lesson for marketers, one attorney said.

"I think right now this is a nonissue that privacy advocates seem to be using as an opportunity to get some press, but it's obvious that Benetton missed a chance to communicate proactively about what the technology is and what the benefits and limitations are from the start," said D. Reed Freeman, an attorney at Collier Shannon Scott PLLC, a Washington law firm specializing in advertising, marketing, e-commerce and privacy.

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