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Macy’s Faces Lawsuit Over AI Facial Recognition 

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“This department store operator is expected to post quarterly loss of $1.94 per share in its upcoming report, which represents a year-over-year change of -792.9%,” Yahoo Finance reported on August 5th

It’s been a tough time for brick-and-mortar retailers, particularly Macy’s. Last week it got even tougher when an Illinois woman filed a class action lawsuit on Wednesday against the retailer, claiming the corporation's use of Clearview AI facial recognition software is an invasion of privacy.

Clearview is a research tool used by law enforcement agencies to identify perpetrators and victims of crimes, according to their website

Clearview built its database of more than 3 billion images gathered from sites like Facebook, Youtube and Venmo, The New York Times reported in January. The software compares images from crime scenes to images on the web, including social media accounts and other public sites.

Macy's has run over 6,000 identities of individual customers through the database, according to the lawsuit. When Macy's uploads photos of customers taken from security footage, Clearview then provides the retail company with access to that individual's personal details, including names, home addresses and work addresses.

Read More: How Apple Is Transforming Customer Service From Complaint Line To Sales Generator

For each individual violation of the Illinois Biometric Privacy Act, the complaint states a person may recover $1,000 for each negligent violation or $5,000 for each intentional or reckless violation, Cincinatti.com reported last Friday. 

My take

Retailers have been experimenting with facial recognition AI technologies in customer experience for over a decade. Throughout the pandemic, the industry has found new purpose in facial recognition for potential to support contactless shopping/payments, temperature checks, mask-detection, surveillance, and more. 

For example, the WSJ recently reported that the New York Mets and the Los Angeles Football Club are testing biometric screening for contactless entry into their stadiums as well as to measure a fan’s temperature and determine whether they’re wearing a mask.

During an era of modern financial Darwinism, brands are forced to adapt and incorporate new and competitive technologies oftentimes to simply stay afloat. However, along with new consumer data aggregation tools whether it be facial recognition, or other consumer tracking methods, marketers, data strategists, and customer experience teams have to be increasingly conscientious of the privacy restrictions and regulations that come with evolving technologies. 

In Macy’s (and many brick-and-mortar retailers’) case, facial recognition technology has largely been used to reduce shoplifting, especially tracking repeat offenders. However, advances in AI and machine learning are enabling retailers to experiment in other areas – areas that may be breaking the law. 

The Facial Recognition Market suggests monstrous increase potential all around the globe and is a surging market that could change the tide of industries all over the world, in-office, in-store, remote work, e-learning, and many other areas of everyday life. Brands and consumers alike need to be prepared for the changing reality in more personalized experiences and efficient processes while abiding by laws and consumer privacy regulations that follow newer technologies.

Read More: How-to Guide: How To Create A 360 Degree Customer View

The study, Privacy and Security in a Digital World: A Study of Consumers in the United States, found that, on a scale of 1 to 10, 86% of adults said they are "very concerned" about how Facebook and Google use their personal information." A majority, 69%, said they are "very concerned" about their privacy when using devices such as smartwatches, smartphones, tracking devices, smart speakers, tablets, PCs, and Macs. A similar number, 66%, said they are "very concerned" when shopping online or using online services.

Traditionally older generations have been less trusting of brands’ use of personal data then younger generations. However, as AI and automation advance at unprecedented rates, consumer privacy will become a greater priority, and even concern, for customers across generations (and the globe).  

This is a time when the world is vulnerable, where every person and organization is adapting to life with a live virus in their midst, where no one is operating from a best-in-class pandemic playbook to survive modern financial Darwinism. Brands, including marketers and customer service departments must become the very people they’re trying to reach. This means that among innovation, compliance, time and technology, humanity must become the greatest application. 

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Read More: Augmented Reality Emerging As A Future Staple To The Customer Experience

For media coverage, lead gen, and digital marketing inquiries, (or to say hi), contact me at matt.wujciak@customermanagementpractice.com, or connect with me on Linkedin at Matt Wujciak. And remember, identifying consumer behaviors before they become trends is how brands deliver compelling marketing and customer experiences.


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