Shoppers reject in-store tracking by retailers

In-store location and behavior tracking does not sit well with retail shoppers, according to a new study by research firm OpinionLab. The survey explored how consumers respond to tracking technologies which are growing in popularity among merchants and found that eight out of 10 shoppers would rather opt-out of in-store smartphone tracking programs.

The study surveyed roughly 1,040 shoppers, of which nearly 70 percent said they don't trust smartphone tracking in stores. Consumers are overwhelmingly unsure if retailers will keep the data they collect secure. Another 66 percent of shoppers would not opt-in to be tracked under any circumstance, even at their favorite retail stores. Shoppers responded that in-store tracking feels like "spying" and they fear that retailers will use the data exclusively to their own benefit.

Forty-four percent of shoppers said they would abandon 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. Only 8 percent of respondents said that smartphone tracking would make them more likely to shop at a particular retailer.

When considering what would help change customers' minds about opting in to tracking systems, a clear incentive from the retailer would be the most persuasive. The majority of respondents said retailers would have to provide discounts or free products in order for them to opt-in to store tracking.

Location-based technologies are growing in popularity among retailers as a way to send offers and messages to customers who are using their mobile phones while shopping.

Apple's (NASDQ: AAPL) iBeacon technology has been a leader in the segment. Apple stores are outfitted with small Bluetooth Low-Energy (BLE) devices called beacons at appropriate points in a store. When a customer comes close enough, a beacon will send a message to the phone, such as an offer, coupon or marketing message. The beacons are relatively inexpensive (less than $35 each in an evaluation kit from one vendor) and can be hidden behind or under displays, so the message can be targeted at customers near specific products.

Macy's (NYSE: M) in November began a pilot program testing Apple's iBeacon technology in certain stores. Macy's partnered with Shopkick for the test in a few departments of its stores in New York and San Francisco. Shopkick's shopBeacons enable shoppers with iPhones and some Android phones 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.

For more:
-See this OpinionLab infographic

Related stories:
Retailer takes customer tracking to new level for the holidays
Apple rolls out iBeacon sensors in all U.S. retail stores
Macy's Shopkick Test Confirms Value of iBeaon
Apple's iBeacons to let stores beam location-based offers to iPhones
Philips uses VLC to add beacons to supermarket lighting

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