The future of facial recognition in NZ retail

Wednesday, 29 January 2025

Facial recognition technology is key to many surveillance systems,and is already in use in many aspects of New Zealand life, including the benefits system, policing and retailing.

Its use in supermarkets is being tested, with the findings from Privacy Commissioner Michael Webster’s inquiry into Foodstuffs North Island’s trial of facial recognition technology in 25 of its supermarkets due sometime soon.

But to really see potential future use for the technology in retail, New Zealanders have to look overseas, especially to the increasingly “walletless” China, where facial recognition technology is now common in shops, as well as being a tool Chinese authorities use to spy on their populace and maintain social control.

Increasingly, with data from cameras able to be analysed by cloud-based technologies provided by third-party service providers, facial recognition technology is available to private enterprises in New Zealand like hotels and retailers.

The security sell

This is the big facial recognition sell in New Zealand, and it’s one that feels hard to argue against. A small number of people are violent, and responsible for a lot of the theft, threats and violence in retail stores.

Facial recognition allows them to identify repeat trouble-makers, though it is not 100% accurate, which can make for some very upsetting experiences for shoppers mis-identified as someone the store owner does not want inside their retail premise.

Retailers argue they have legal obligations to keep staff safe. Some think that argument is a Trojan Horse.

In fact, it is shoplifting and store margins and profits that are the real motivation, Consumer NZ’s Jon Duffy said in March last year.

How widespread its use is is not known as there is no need to get a consent from any authority to use facial recognition in stores.

But New Zealand company Access Security and Control, which provides security systems for the likes of the Stamford Plaza hotel in Auckland, says: “Facial recognition is … now common in the industry, allowing identification of specific individuals and triggering actions such as alerting security when such a person is identified.”

The world’s largest seller of security camera systems, Hikvision, which sells cameras in New Zealand including through private companies like Access Security and Control and PBTech, highlights their use to “identify suspicious people via AI recognition” on its New Zealand and Australia website.

Hikvision has been criticised by Amnesty International over the use of its cameras in the Palestine territories, their use by Chinese authorities to spy on Muslim Uyghurs, and the potential security threat from their widespread use in New Zealand.

Wallet-less payments

Facial recognition can make some “transactions” quicker, and less boring. Travellers going through passport control at airports have a much quicker time of it with “e-gates” that match faces to passport photos. The Ministry of Social Development has the Identity Check facial recognition system for people applying for ongoing financial assistance online through MyMSD.

But reducing “friction” in retail transactions is something that saves retailers money, and increases sales.

In China, facial recognition is used on transport systems like underground systems at turnstiles, but “biometric” payments (fingerprints, palm prints, and facial recognition) are now standard in Chinese stores. People simply authorise payments using their faces, or palm prints, at payment terminals instead of waving a card at them. This happens in some Western countries, but not in New Zealand, yet.

The Amazon One “Just Walk Out” technology involves people swiping their payment card when they enter a store, and having their palm print recorded. They shop and use their palm print to exit the store, authorising payment for the items they bought.

Personalised advertising

Imagine walking around in a store where there are digital screens that switch to advertising things the store has identified you may want based on your shopping history and demographics, after having used facial recognition to identify you.

That’s a “use case” gaining popularity, one tech company seeking New Zealand customers, says: “Digital signage equipped with facial recognition cameras can instantly change displayed promotions when a teenager versus a middle-aged woman walks by.”

Personalised pricing

US retailers Krogar and Walmart were accused last year of “surge” pricing, which is the practice of lifting prices during peak shopping times. They issued denials. But both were moving to electronic price tickets on shelves that can be changed within seconds. That caused a lot of social media chat, especially when one retail analyst characterised it with the phrase: “If it’s hot outside, we can raise the price of water and icecream.”

It even led to people wondering whether stores with electronic price tickets could link it to the use of facial recognition technology and customer data, to charge personalised prices, boosting revenue.

Identifying VIPs

The Council for Civil Liberties fears the loss of the ability to be anonymous in public places, retail stores being one subsector of those. One use of facial recognition being sold to retailers is the ability to identify customers, especially VIPs.

“Employees can receive a smartphone notification the moment a top customer walks in. Staff can then greet that VIP by name and provide personalised attention from the start,”one sell says.

SkyCity casino is one of the most camera-heavy environments in the country. It uses facial recognition to identify problem gamblers to meet host responsibility laws.

Gathering in-store intelligence

Facial recognition systems can identify shoppers’ emotions. That means they can learn a lot about where the pain points are in their stores, and how people respond to things like excessively long queues at self-service check-outs.