Many of us have downloaded our favorite store’s loyalty app to get access to coupons and special deals. However, we often grant these apps powerful permissions without understanding the full extent of their tracking capabilities. A growing number of retail apps use sophisticated technology to track your location and collect data, even when the app is closed and running in the background. This unsettling practice allows retailers to gather a huge amount of information about your shopping habits, both inside and outside their stores.
The Technology Behind the Tracking
Retail apps use two main technologies to track your location in the background: geofencing and Bluetooth beacons. Geofencing uses your phone’s GPS to create a virtual perimeter around a specific location, like a store or a competitor’s store. When your phone crosses that “fence,” it triggers an action, like sending you a push notification. Beacons are small, low-energy Bluetooth devices placed around a store that can detect when your phone is nearby, tracking your movement with much greater precision.
The Goal Is to Influence Your Behavior
Retailers use this tracking data for several reasons, all of which are designed to make you spend more money. If you walk past their store, geofencing can trigger a push notification with a “can’t miss” deal to lure you inside. Inside the store, beacons can track which aisles you linger in, allowing the app to send you a targeted coupon for a product you are looking at. This creates a highly personalized and persuasive marketing environment.
They Track You at Competitors’ Stores
One of the more surprising uses of this technology is competitive tracking. A store’s app can create a geofence around a rival’s location. When you visit a competitor’s store, your app can report that data back to the original retailer. The company can then use this information to send you a more aggressive discount offer to try and win back your business, a practice known as “conquesting.”
How to Protect Your Privacy
The most important step you can take is to carefully manage the location permissions for each of your apps. In your phone’s privacy settings, you have the option to allow location access “Always,” “While Using the App,” “Ask Next Time,” or “Never.” For most retail apps, there is no good reason to grant them “Always” access. Setting the permission to “While Using the App” is a much safer choice that prevents the app from tracking you when it is closed.
The Cost of a Coupon
Store loyalty apps offer a clear value exchange: you get discounts, and the store gets your data. However, the use of persistent background location tracking is a step that many consumers find invasive. It turns your smartphone into a 24/7 surveillance device for marketers. By being mindful of app permissions and questioning why a simple coupon app needs to know your every move, you can take back a measure of control over your data.
A Question of Trust
The use of background location tracking by apps is a test of trust between a brand and its customers. While the goal may be to provide more relevant offers, the practice can feel like an invasion of privacy. As consumers become more aware of these hidden tracking technologies, they will increasingly demand more transparency and control over how their data is being used.
Have you ever received a surprisingly specific push notification from a retail app? How do you feel about apps tracking your location when they are closed? Let us know!
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