Monday, November 29, 2010

Location-Based Services: Going too far?

Location-based services (LBS) represent a clear opportunity for retailers to broaden their breadth of consumer information. By promoting LBS activity among consumers they can hope to develop a much more complete picture of consumer behavior. This information could augment that compiled by businesses through loyalty/rewards programs that track in-house purchasing trends. By understanding where else their customers shop, how often, and what they purchase, businesses can attempt to capture greater wallet-share among their established customer base.
Though the benefit to the business is fairly clear to me the benefit to the consumer is a little tougher to come by. Personally I've looked into Foursquare and Facebook Places, but see no benefit to participating in them. I have no interest on being the "Mayor" of any store, or earning "badges" for completing tasks, trying new services. Certainly discounts are the most popular incentive for businesses to spur activity among rewards programs and I'm sure that will translate to LBS fairly well, but personally I have a limit to the amount of information I am willing to disseminate for a free bagel at DD's. LBS is far beyond that limit. It also sets a dangerous precedent in my opinion. What's next? If you "subscribe" to a certain retailers LBS promotion allowing them to track you through GPS constantly in exchange for discounts, will everyone will a cell phone become a tool for data mining, are they already?
I realize this is an evolving trend and like I said, represents a tremendous opportunity for businesses to compile data, but as consumers we have to decide for ourselves where the line is. How much information are you willing to give up to receive discounts at your favorite coffee shop? How would you feel if that information was hacked off the corporate server? How would you feel if the internet ads you were seeing suddenly reflected not just what you search for in Google, Yahoo, etc., but where you went yesterday? I'm not much of a conspiracy theorist, but I am somewhat private I guess, certainly enough to make a conscious decision not to participate in LBS myself. I don't protest its existence, I just fear some consumers, especially young ones, will jump at the opportunity while not fully understanding its implications.


  1. I agree with the point that you made above; especially there is no interest to be a mayer or to get badges. Yup, maybe you may if you just started playing; but it doesn't last long enough. I guess the best incentive is discounts, yes. But before that, i guess, people around you should play Foursqure or Facebook places; then it would be a lot easier for business to join into the very market.

  2. I see where your point is and I also see where are limits are different and you're completely right. Being someone who doesn't really remember much before blogging and social sharing existed, I'd probably jump at the offer of getting free discounts at some place I already go to without thinking twice about it. And I guess that's kind of a fear that needs to be instilled in students like myself who don't mind divulging too much information and not taking a step back to look at the repercussions of giving that kind of information. But at the same time, I don't particularly mind it if DD's knows when I come into the door for a coffee and bagel, what I prefer, and which locations I go to most in exchange for discounts. As long as they don't get my credit card number or identity and they do something wacky with it...

  3. It's interesting that you bring this up, Doug, because its a lot of what we've talked about in our CRM class - consumers in the US are no longer afraid of providing information and it begs the question of how much is too much (like you said). I'd be interested to learn more about how these LBSN will be adopted in countries where its not normal to provide that much information.