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'Smart shelf' test triggers fresh criticism

Wal-Mart Stores and Procter & Gamble quietly tested a controversial new smart-chip-based retail technology earlier this year, representatives of both companies confirm.

Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
Alorie Gilbert
2 min read
Wal-Mart Stores and Procter & Gamble quietly tested a controversial new retail technology earlier this year that allowed P&G employees to observe shoppers via a Webcam as they removed cosmetics from shelves, representatives of both companies confirmed Friday.

The test, which took place over a period of four months at a Wal-Mart store in the suburbs of Tulsa, Okla., sparked fresh criticism from privacy rights advocates, after a story in last Sunday's Chicago Sun-Times said the "secret study" made "unwitting guinea pigs" of Wal-Mart customers.

"It proves what we've been saying all along," Katherine Albrecht, founder of Consumers Against Supermarket Privacy Invasion and Numbering, said in a statement. "Wal-Mart, Procter & Gamble and others have experimented on shoppers with controversial spy chip technology and tried to cover it up."

CASPIAN and other consumer advocates are wary of so-called smart-shelf devices, which require outfitting merchandise with microchips that can broadcast their whereabouts via a radio signal. Critics say the technology, also known as radio frequency identification (RFID), could lead to a surveillance society. CASPIAN has called for boycotts of Gillette and Benetton over their RFID plans. Retailers, including Wal-Mart, laud the technology as a next-generation, and far more efficient, form of bar coding.

Wal-Mart had plans to conduct a smart-shelf test in a Boston-area store with Gillette but called it off this past summer, after CASPIAN balked. The company continued on, however, with its less publicized Procter & Gamble test, in which it sold, from March to July, Max Factor Lipfinity products embedded with the special tracking chips. A Wal-Mart representative, who told CNET News.com in July that the company had never sold products with chips in them, now says he only recently became aware of the Lipfinity test.

A Procter & Gamble spokeswoman defended the test, saying the company posted a sign near the Lipfinity smart shelf, alerting customers to an electronic monitoring system. The sign made no mention of the chips embedded in the packaging of the products, however. The chips, which could only be read by special readers held no further than a half inch away, were a largely useless after being removed from the store, she said. The purpose of the Webcam, she added, was not to spy on shoppers. It helped the company visually check that the inventory data the shelf collected was accurate.

"We wanted to understand if this technology could help us keep products on the shelf and in the right spots," said Jeannie Tharrington, the Procter & Gamble spokeswoman. "We know that it is very frustrating for our consumers when they cannot find our products to buy, because they are out of stock or sitting in the wrong location."

Both companies said they are done testing radio frequency technology in stores and that they're focusing on using it in warehouses, instead.