As Europe Tightens Up On Location Data, Retailers Need To Get Customers' Buy-In

Europe is coming down on the mishandling of mobile-phone location data—even if it's not coming down very hard. On Friday (May 20), a European Commission group will recommend that mobile location data be treated as personal data, according to The New York Times. That would theoretically give location data much better legal protection. But the recommendation is nonbinding, and Apple and Google are likely to be much more concerned about individual EU countries investigating their practices than this toothless advisory opinion.

Applying PCI-like security approaches to data well beyond payment-card information isn't a new idea, but it's unfortunate for retailers that Apple got so sloppy with its users' location data. Spotting customers as they're headed for a store is the holy grail of retail mobile-location technology, whether via GPS, Wi-Fi, cell-tower triangulation or POS tracking, and right now that's all getting a slightly creepy reputation. But in practice, it's going to become the norm—retailers will just need to get their best customers to opt in.

The EC advisory group, which includes regulators from 27 countries, is working on a general overhaul of privacy regulations. And it isn't specifically aiming at Apple and Google—or retailers, for that matter, The New York Times story said. On the other hand, Apple is being investigated by the U.K., France, Germany, Ireland and Italy for possibly breaking national privacy laws by storing months of location data in iPhones.

But those recommendations and investigations—like the similar Congressional hearings in the U.S.—aren't likely to stop anyone from using location data to track customers. Some customers will even go out of their way to broadcast their location, if they decide there's a benefit to it. That's the whole point behind check-in services like Foursquare and Shopkick. No one is secretly tracking them—they're volunteering the information.

That's the real key to working around the current brouhaha over location. Today, customers volunteer a small mountain of CRM data to get a loyalty card, and they're happy to do it. They know their purchases are being tracked. They just figure they're getting something out of the deal.

Likewise, retailers should plan on having to get the permission of their best customers to track them. Something like a super-loyalty program, where top customers get even more benefits and in turn grant permission for mobile operators or payment-card companies to pass location-tracking data to the retailer so the store will know when they're walking in.

It's possible that the stink over Apple's location leakage could blow over, but it's not likely. Getting customers to buy into giving away their locations, on the other hand, means they'll fight for the right to tell you where they are.