Mannequins fitted with facial recognition software are tracking the age, sex and race of retail customers so that companies can rebrand and market their stores accordingly.

The €4,000 (£3,236) EyeSee mannequins, made by Italian company

Almax SpA, use software typically reserved for high security locations, such as airports, where law enforcement track the public. It's already in the stores of five global brands across four countries, including two in Europe, the US and Canada, and according to CEO Max Catanese there have been plenty of requests from UK retailers. "It's a system that's able to give demographics about the person passing in front of it," Catanese told Wired.co.uk. "It's based on an algorithm. The algorithm analysed three million faces before going to production and now the number, as well as the accuracy, is rising. Once [companies] read the data, they can implement strategies inside the stores to boost sales."


According to market research carried out by the firm, companies have already seen sales increases because of changes made from the data analysis. In one store, for instance, the system showed that there was a peak in customers of an Asian background entering a particular entrance every afternoon -- it turned out a tourist bus stopped by that entrance every day at 5pm. The manager opted to place two Asian sales assistant by that entrance around the same time, and this led to a 12 percent increase in sales that day, and a 22 percent increase in the following days.

If the sound of that unsettles you, it probably should. Beyond the somewhat creepy idea of mannequins watching you (unless, that is, you're a fan of the 1987 film Mannequin and praying for a young Kim Cattrall to burst into your life), the product enters some dubious territory when it comes to data protection law -- Facebook was recently forced to dump its facial recognition function because of pressure from European regulators who suggested it might be unlawful. "The capturing and processing of images of people is right in the middle of the Data Protection Act," Stewart Room, a partner at Field Fisher Waterhouse specialising in data protection and privacy law, told Wired.co.uk. "You need to identify a lawful basis for the capturing of this data. When it comes to profiling people for marketing behaviour, fundamentally the trajectory of this in Europe is that it's got to be consent based."

Read next Gallery: Mannequins are spying on shoppers for market analysis Gallery Gallery: Mannequins are spying on shoppers for market analysis

Catanese, who consulted with privacy lawyers while developing the system at Politecnico di Milano, is not too troubled by this. "Although I understand it is something 'new', I don't see any real privacy concern," he told Wired.co.uk. "The version we are selling now has a 'blind' camera, which means it does not record or store any image. In addition, all stores today have security cameras. These cameras are not blind and they record and store images whilst the EyeSee mannequin does not. As we are in the same place, I don't see any difference, with the advantage that we don't recognise anybody nor show any image to the retailers, just statistics."

Catanese argues that stores will have signs up saying they're being filmed anyway, since they will have CCTV installed, but says even this is probably not necessary for the mannequins since they don't retain the images. Despite this, he did confirm his legal team has suggested stores put signs up to let customers know they are being filmed (much like a pop-up warning web surfers about the use of cookies). Either way, the use of EyeSee mannequins most definitely differs legally from stores being permitted to use CCTV cameras. "CCTV for crime detection and prevention is an area where privacy legislation says organisations have quite a bit of latitude," says Room. "But marketing isn't in that zone. The business may argue that it's legitimate to film for this purpose, but image data is controversial -- a picture paints a thousand words -- potentially highly personal and arguably very intrusive in some situations, even if the processing of the images is transient, in the sense that the images are quickly analysed then deleted leaving over just non-personal analytics data. Here's a possible scenario: a dummy films a lady buying a particular kind of underwear, or medicine. There could be a high level of intrusiveness here. "Images are perceived to be more intrusive than just the written word, so I think it will be difficult to make this activity fundamentally lawful. It doesn't mean of course you shouldn't do it, because you might be able to de-risk it to a greater extent, but it isn't CCTV for crime protection; it's data warehousing and profiling and analytics for retail."


According to a report by Bloomberg, some retailers are already using similar tactics to Almax but, rather than using eye-level cameras fitted into mannequins' eyes, they are using ordinary CCTV footage -- a dubious practice. "If the CCTV footage is being used for a different purpose, you lose the authority of the crime detection purpose in the legislation," warns Room. "As soon as you cross over the boundary from that privileged zone of law enforcement to, let's use customer data to enrich the shoppers experience, you're entering a zone that wasn't contemplated when the data was captured."

Despite the legal grey area, Almax is offering brands a great business model that certainly fits in with the technology-savvy retail sector we are seeing emerging. A report released by The Future Laboratory this month suggested that to survive in the retail business, particularly in the luxury sector, companies will need to make experiences more personalised -- a personalisation supported by technology.

The recent reopening of Burberry's Regent Street branch in London is an example of this. Rather than focusing on replicating the in-store retail experience online, the brand focused on doing just the opposite. "Walking through the doors is just like walking into our website," said Burberry CEO Angela Ahrendts.

Elsewhere in-store iPads are appearing, and as customers surf their options, it's likely that data is not floating into the abyss but being carefully processed and contributing to where and how products are displayed.

According to Room, the best way for new technologies such as these to achieve safe passage within the commercial landscape, is

Privacy by Design. Rather than building a monolithic regulator that will stifle the economy and innovation ("they won't build one for finance, so they're not going to build it for privacy," commented Room), companies should be expected to do their due diligence during product development and be prepared to deliver the privacy risk analysis they carried out when the product was in beta, if a commissioner came knocking with questions. In the Bloomberg report, Catanese suggested some retailers could bypass any risk by asking customers to opt-in for in-store perks.

The issue at the moment, according to Room, is that privacy risk is always an afterthought, and "the idea that we see the monetisation piece before we see the privacy piece is a very loud conversation to be had".


Almax is entering the marketplace at a time when data protection law is at a crossroads in Europe. The latest proposals fore reform have already been dismissed as "too prescriptive" by the UK House of Commons Justice Committee and, according to committee chairman Alan Beith "the current data protection laws for general and commercial purposes need to be updated, as they do not account for the digital world".

Undaunted, this isn't stopping Almax, which is looking into giving the mannequins "ears" so they can not only watch customers, but listen in on their conversations. Surely even

Mannequin fans would be creeped out by the thought of that?