NEW YORK — Tracking beacons may promise to alter retail shopping, but thanks to a Buzzfeed exposé, they won’t be monitoring the streets of New York again any time soon. Only hours after the story ran, tiny radio transmitters that had been quietly installed without public notice were pulled from hundreds of pay phones across the city.
This is a significant setback for a technology with great advertising potential that has been hampered by privacy concerns in the past. And it’s an object lesson about why it’s important for advertisers to tread carefully when rolling out new technologies, especially those that deal with personal information.
The little beacons can easily be attached to a wall; a shelf; or in the case of New York, a phonebooth. The low-energy, Bluetooth-based technology transmits messages directly to tablets or smartphones. At a retail location, a beacon engages customers, offering services like guidance through a store or suggested purchases. It can even communicate with shoppers on a first-name basis.
Because of privacy concerns, users have to opt in via an app before a beacon reaches out to them. Ostensibly, this means people don’t have to worry about a beacon invading their privacy without permission. Nevertheless, many mobile technologists, like the publishers of Buzzfeed, are concerned about privacy.
In New York, the city did not alert city residents before installing the beacons. That’s not a great public introduction for a technology that could mean so much to advertisers. In fact, the scandal occurred not long after retail giant Macy’s announced it would be expanding its partnership with Shopkick to implement beacons at locations across the country.
Other major retailers that use beacon technology include Lord & Taylor and Hudson Bay.
While this certainly won’t dissuade retailers from utilizing beacon technology, it can’t possibly do a lot to build consumer confidence. As advertisers seek new ways to engage consumers, this is a good reminder that it’s equally important that consumers be comfortable with the way they go about doing it.
The best technology in the world is no good if it has to be yanked out of commission because people feel violated.