Wall Street Cheat Street
by Emily Coyle
Location-based technologies are growing in popularity for retailers that want to send offers and messages to customers who are using their mobile phones while shopping, but as it turns out, shoppers aren’t too fond of the idea. According to Fierce Retail, a study conducted by research firm OpinionLab surveyed roughly 1,040 shoppers, and nearly 70 percent of them said they don’t trust smartphone tracking in stores. In fact, the survey found that eight out of 10 shoppers would actually rather opt out of in-store smartphone tracking programs.
Retailers initially thought that customers would respond well to location-based technologies because they give shoppers the option of securing deals and offers from stores, but it is clear from OpinionLab’s survey that consumers are still anxious about their data and how it is being used. That’s why many of them would rather retailers not enlist the new technology at all.
Fierce Retail reported Wednesday that that the overriding sentiment among shoppers is anxiety over whether retailers will keep the data they collect secure. About 66 percent of shoppers surveyed said they would not opt in to being tracked under any circumstances, even at their favorite retail stores. Forty-four percent of shoppers said they would stop visiting a retail store altogether if the store rolled out a tracking program, while another 48 percent said tracking technology would not affect where they choose to shop.
Although some retailers originally thought their tracking programs would draw new shoppers to stores, OpinionLab reported that only 8 percent of respondents said that smartphone tracking would make them more likely to shop at a particular retailer.
Per Fierce Retail, one of the first retailers to roll out location-based technology was Apple (NASDAQ:AAPL) at its retail stores. The company has found a way to enlist iBeacon technology, which involves placing small Bluetooth Low-Energy (BLE) devices called beacons at appropriate points in Apple stores. When a customer comes close enough to a certain location, a beacon will send a message to the phone, such as an offer or coupon. The technology even allows Apple to tailor its message so offers can be targeted at customers near specific products.
Location-based tracking is a considerably useful tool for retailers, especially considering that beacons like the ones used by Apple are inexpensive and can be easily hidden, Fierce Retail reports. However, customers are still leery about being tracked, and OpinionLab found that many would only opt in for store tracking if retailers promised to offer deals or free products as part of the new technology.
Fierce Retail said Wednesday that Macy’s (NYSE:M) also recently jumped on the iBeacon train. The company began a pilot program testing Apple’s technology in certain stores starting in November. Macy’s partnered with Shopkick for the test; its shopBeacons enable shoppers with smartphones to have their Shopkick app “woken up” by a signal from Bluetooth transmitters when they enter Macy’s, even if their phones are in sleep mode.
As more retailers play around with the technology, they’ll have to be cognizant of customers’ hesitation over the smartphone tracking, but if it becomes the norm for the future, shoppers may have no choice but to give in.
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