Location-based services: Controversy at every level

Like it or not, commerce increasingly involves keeping tabs on the customer's location.

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Indeed, the implications of research from various sources -- gathered by Qualcomm and shared by a corporate spokesperson -- hint that the retailers are not trying to establish some kind of "1984" or "soak the rich" environment. Rather, they are primarily hoping to counter the practice of "showrooming," where shoppers go to the store to examine a product, and then go home to buy it online at a presumably lower price.

Around 43% of U.S. adults have engaged in showrooming, making the practice a real threat to brick-and-mortar retailers. Even if they are not showrooming, nearly half of customers have been known to check prices on their mobile devices while in a store to make sure they are getting the best possible deal.

But consumers are also 46% less likely to go comparison shopping if they have a particular retailer's app running on their device.

Location-based services

The issue is not going to fade away; some 73% of smartphone owners have used their phones while shopping (PDF), primarily for checking prices but also to take photos to send to friends or family members. Wal-Mart found that 55% of the shoppers who walk into a Wal-Mart store are carrying a smartphone. Those who have a Wal-Mart app on their smartphone enter the store twice as often and spend 40% more during their visits as does the "average" shopper.

But privacy-conscious or skinflint customers are not the only problems facing retailers when it comes to location-based services. Hunter at Qualcomm noted that Web retailers can send people into the showrooms of brick-and-mortar retailers (with non-Qualcomm equipment) to "wardrive" the Wi-Fi and BLE routers in the electronics departments of those stores -- in other words, use passive devices to collect the network IDs of routers in the vicinity of high-dollar items. The Web stores could then send offers to anyone browsing in those departments, telling them the same products can be acquired cheaper online.

One shopper's version of welcome personalized offers might have another person wondering if his favorite big box store has become a Big Brother store. "It's a question of how the retailers communicate the benefit of what they're doing," says Golvin.

And for those who remain unconvinced, "Turning off your phone is always an option," he adds.

This article, Location-based services: Controversy at every level, was originally published at Computerworld.com.

Copyright © 2014 IDG Communications, Inc.

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