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From each, according to his balance

StorecardsAdvertising Age worries that a new best-seller will hurt marketers' efforts to use radio-frequency id (RFID) chips to track consumer habits.

Me? I'm delighted to hear about the work of Katherine Albrect and Liz McIntyre, who track the direct market industry so we don't have to. Albrect and McIntyre's book Spychips: How Major Corporations and Government Plan to Track Your Every Move with RFID, has hit the top 10 of Amazon's nonfiction list - a small triumph for their activist group, Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN).

I haven't read the book but from a look at CASPIAN's website, I can guess one of the central arguments: shopping cards and other direct marketing devices appear to benefit consumers by providing discounts when in fact they do the opposite. Though cards may appear to save shoppers a few cents, the enormous costs of implementing these programs increase prices overall. Card-club stores tend to cost more than stores without cards. One study found that Albertsons and Brookshires - two stores with card programs - were selling packages of Velveeta cheese marked with the manufacturers' suggested retail price of $3.99 for $5.99 and $5.59 (respectively); the only way customers could get the $3.99 price was to use a club card. Nearby stores without card programs were selling the stuff for $3.99.

Store costs only stand to worsen as marketers further refine their targeting, with stores catering to high-profit customers (middle and upper-class families, for instance) at the expense of low-profit ones (low-income singles). By providing companies with ever-increasing information about your purchasing habits, they stand to swing the balance of power even further toward corporations and thereby maximize the dollars they suck out of each individual customers.

As Albrect argues, corporate claims to reward customer "loyalty" with tracking devices are but a ruse. Marketers primary duty is and will always be getting as much from its customers - however "loyal" - as possible.

For example, L.L. Bean recently produced two versions of its catalog:

"This holiday season, L.L. Bean, which has a tradition of offering unconditional free shipping, made it conditional to some and unconditional to others. It mailed a catalog to existing customers with no offer of free shipping. A second catalog that went to prospects, however, offered free shipping with no minimum purchase required."

In other words, the loyal customers got the shaft.

Albrect and McIntyre also raise serious concerns about the civil-liberties implications of widescale consumer tracking. The strongest criticisms are based on potential or future uses of these technologies. And if some of the fears ring a curiously conspiratorial note, well, so be it.

Albrect is, in fact, an eschatological Christian who has produced videos for Endtime Ministries, including one that equated RFID with [cough] the mark of the beast. But unlike most evangelicals, she's discreet about her biblical beliefs and seems to have a grasp on the difference between fact and fiction. According to a Wired story, the EFF and other mainstream privacy advocates have actively encouraged her to reach out to Christian fundamentalists. And it's not hard to see why. As anyone who remembers Proctor & Gamble's battle over its "satanic" logo in the 1980s can attest, Christian conspiracists make for a formidable (if crazed) foe.

Conveniently enough, one of the companies researching the use of RFID in consumer tracking: Proctor & Gamble.

Posted by carrie on 10/14/2005 | Permalink

Comments

thanks for this post, it was most fascinating. please consider writing more about this topic, book, and it's crazy christian authors in a future issue of SF! magazine. i would love to hear more.

also, there was a story about this RFID stuff, on NPR's On the Media back in April. the story was "Measure by Measure" and the url to listen to it is here:
http://www.onthemedia.org/otm040805.html

note that in addition to being able to listen to that story as a real audio clip, you can download the whole show as an mp3, which i would recommend as this was a particularly strong episode. incidentally, i would also recommend subscribing to the show's podcast as i think it's awesome, but that's just me.

Posted by: daniel | Oct 14, 2005 8:26:12 PM

Velveeta?

Posted by: Mike J | Oct 17, 2005 4:23:34 PM

Great find. I'm doing my dissertation on company surveillence and consumer privacy. If anyone has any other relevant info. or if you want to be interviewed, drop me a line. Thanks.

Posted by: Bokonon | Oct 18, 2005 12:28:21 AM

Carrie,

As I'm sure you know, this "shafting" loyal members is not a new marketing technique. I remember my father letting his tech magazine subscriptions expire in the 70s and 80s so he could get the new subscriber bargains once again.

Nevertheless, I doubt whether Popular Electronics was playing the same games the stores have. And -- in the interest of full disclosure -- I must admit that I have ShopRite and PETsMART [sic] tags on my keychain.

Though I only go to a supermarket a few times a year (if we don't count Whole Foods and Trader Joe's), ShopRite is there when I want it, and it works for me.

It ain't easy balancing living in this consumer society without living in a tree. (Maximum respect to all tree-livers.) Even the second-most envionmentally friendly product comes with excess packaging. If it didn't, it wouldn't sell, and the company would go out of business leaving an opening for another operator with bigger and prettier trappings.

To get a bit more back on topic. What's so bad about being tracked for the crime of purchasing? You did the crime, now they'll track your purchase time.

I do understand the argument of the shadiness of this kind of tracking. And I do also undertand the importance of getting this information to those who don't know about it yet.

Still, I think it unlikely that the majority of consumers who don't have time to sit around in their apartments typing screeds in the wee hours of the morning (that's a jab at myself, btw) also don't have time to determine whether their supermarket's card will cause their purchase of Raisin Bran for their kids (Post, Kellog, or store brand) to populate a field in some distant database. Yes, some grassroots effort might reach a few, but c'mon.

And quite frankly, I don't really care if the 50 cents I save on Stonyfield Farm Banilla Yoghurt (that may have been cheaper at the neighboring nasty-ass Acme or Pathmark) is going to allow the corporation to determine that the 19130 zip code is increasingly preferring De Cecco pasta to that of Barilla.

I am still a bit pissed, however, that PETsMART didn't send my kitty Zoe the promised gift on her second birthday. Somebody probably didn't get around to putting my application into the computer.

How about that. Money -- or the lack thereof -- can buy incompentence of that degree. Consumer and media activists alone can't destroy behemoths like WalMart. Perhaps the SEIU* campaign can have an effect. Perhaps media bits will help.

If you asked me, I'd say "I think that empires tend to fall under their own weight."


Peace, Love, and Propaganda,


Steve


*PS: Though not an SEIU member, I do sometimes get phonemail messages from them. That's great! I think that SEIU does great stuff. The message I received today pointed to this site: http://walmartwatch.com/.

Posted by: Steve | Oct 18, 2005 1:25:36 AM

What's so bad about being tracked for the crime of purchasing? You did the crime, now they'll track your purchase time.

You want the short answer? (Hope so.) As I said in the post, these practices only further throw the balance of power to the corporations trying to get your money. (I don't think making a purchase is someone that we should in any way we punished for.)

Still, I think it unlikely that the majority of consumers who don't have time to sit around in their apartments typing screeds in the wee hours of the morning (that's a jab at myself, btw) also don't have time to determine whether their supermarket's card will cause their purchase of Raisin Bran for their kids (Post, Kellog, or store brand) to populate a field in some distant database. Yes, some grassroots effort might reach a few, but c'mon.

You have hit upon the main obstacle to just about every critique of marketing and corporations: individual companies have a much greater stake in them than individual consumers.... which is why they'll spend millions in lobbying while the mast majority of consumers do nothing. But I don't really see how that erases the problem or invalidates the work of activists.

Posted by: carrie | Oct 18, 2005 9:50:54 AM

To get a bit more back on topic. What's so bad about being tracked for the crime of purchasing? You did the crime, now they'll track your purchase time.It is more than that, though. The reason they want the information is to figure out how to get you to spend more. One way is to organize the items in the store to prompt more spending overall. Another is to put pasta on sale for club members to encourage a purchase while simultaneously raising the prices of sauce (because who would buy only one?). In the long run the savings are illusory and having the club card can cost you money.

Of course, I have club cards for Pathmark, Key Food and Waldbaums.

Posted by: Charles Star | Oct 18, 2005 3:44:51 PM

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