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Location-based services: Controversy at every level

Lamont Wood | Jan. 22, 2014
Like it or not, commerce increasingly involves keeping tabs on the customer's location.

The most recent development has been adding Bluetooth low-energy (BLE) detectors, confusingly called beacons, to the triangulating routers. BLE is part of the Bluetooth 4.0 standard used on late-model smartphones, and permits one-foot detection accuracy with small, inexpensive devices that have a battery life of several years, explains Kevin Hunter, director of product management at Qualcomm Retail Solutions. Passive tracking with Bluetooth is possible just as is done with Wi-Fi, without any need for the phone's owner to opt in, notes Schuman.

"It costs 40 bucks, you stick it on the wall, and its batteries last five years," adds Roeding, whose firm is offering BLE as an enhancement for its Shopkick system. "It can also remind you to open the app in the store, if you opted into that; the fact that the user had to remember to open the app was a drawback in the past," he says.

The resulting location data is not usually overlaid on a map, as that would involve the additional expense of mapping each store, Hunter adds. The stores are typically content to know what department the user is in, he notes, so they merely need to label the beacons by location.

But map or no map, customers are being electronically followed around the store. Storefront Backtalk's Schuman recalls a department store that put up a sign telling customers that their smartphone's Wi-Fi emissions were being tracked unless they went to a website and entered their phone's MAC address to opt out — generating so many complaints it stopped the tracking.

"The lesson is that the customers don't like it — or that putting up the sign was a bad idea," he notes.

The obvious pro-privacy move of turning off the phone's Wi-Fi and Bluetooth facilities assumes the owner knows how. Meanwhile, turning off Wi-Fi may inhibit the owner's ability to make calls from inside large stores, notes Schuman.

Roeding says Shopkick protects customer privacy because it, not the retailer, interfaces with the customer and hands out the loyalty points. "We don't supply any names, only aggregate numbers," he says.

Hunter says that special features of Qualcomm's BLE beacon promote privacy by emphasizing the need to opt in, and for transparency. After opting in, users can turn off selected features, or opt out entirely and even erase all data about them that has been collected on the device, and do it easily, he claims.

Fujitsu's "U-Scan shopper," shown at a trade show in 2005, allows customers to view uploaded shopping lists, check prices and locate items in stores. The monitors also allow retailers to offer loyalty incentives and personalized advertising based on individual shoppers' profiles. REUTERS/Tim Wimborne


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