Micro-Location: The Next Digital Frontier?

Micro-Location: The Next Digital Frontier?
Smartphones that know where you are have the potential to drastically change the way businesses and consumers interact.

As smartphones and tablets become commonplace, consumers are starting to use them differently, and increasingly that involves leveraging tools that are location-enabled. The possible business uses for this kind of technology are rapidly expanding, especially with the rise of products like Apple’s new iBeacon product. iBeacon is a way to send notifications to nearby enabled smartphones using Bluetooth Low Energy. Macy’s is an example. The retail giant is using iBeacon to power a rewards app that allows customers to access specific discounts and recommendations as they enter various departments in the chain’s San Francisco and New York City stores. Imagine walking past the sweater section and a notification pops up on your phone alerting you to a sale on cashmere (which “it” knows you’ve previously purchased) two aisles over. Pretty cool. But maybe a little creepy. As this kind of personalized mobile marketing is still new, technologists and business experts agree that we’ll have to ease into it. Nonetheless, it could be the next frontier of the digital landscape. 

SOLOMO Technology is a Madison business on the forefront of this nascent micro-location field. Since its launch in 2011, SOLOMO has leveraged its platform—a system of sensors and software that powers location analytics for a physical space—to provide clients with unprecedented insight about an environment, transforming it into a “smart location.” A business using the SOLOMO platform can tap into previously unavailable data on where in its store customers are going, how long they’re staying in each department and if they are new or returning customers. Customers can opt in to receive personalized messages on their smartphones that welcome them to the store or, say, a football stadium, and point them toward discounts or the nearest concession stand. “This adds value to both the business and the consumer,” says SOLOMO founder and CEO Liz Eversoll. But what about privacy? “We built that in from the beginning,” Eversoll says. SOLOMO doesn’t collect any of the data their devices track without permission, and personal information is encrypted. “Our belief is that you own that information and should be able to manage it.” 

UW computer sciences assistant professor and computer security expert Tom Ristenpart shares his views on data privacy

What worries people more: that their data is collected or that their data could be hacked? I really don’t know. My personal sense is that people find it difficult to get a handle on the extent of government/corporate surveillance and on criminal activity (not necessarily separate categories). Even experts in computer security are struggling to understand and quantify the scope of malicious activity.

Are these concerns rational? It’s absolutely rational to be concerned. Data is a new kind of currency in today’s economy, and it’s hard to predict the kind of abuses that may occur in the future. That said, there’s a difference between being concerned and being panicked. The latter will not lead to a constructive discourse on societal and legal policies related to personal data.

Are there security risks location-aware services specifically pose?   Of course. Systems that track your physical location in real- time can represent a personal safety issue as well as a privacy issue should appropriate controls not be in place … If organizations can’t keep credit card data protected from criminals, we shouldn’t have confidence that location-tracking systems will be safe from exposure.

How does one weigh privacy concerns against the benefits of location-aware technology like maps and weather apps? People want these apps, they are useful, and they will be used moving forward. I don’t think there’s any way to stop them (nor should we try). But we should be vigilant against poor security practices, and try to set societal and legal norms regarding the abuse of location data.

How can companies protect consumer data? Not keeping the data is the easiest way to protect it, and there have been plenty of suggestions on data minimization efforts. Ideally, companies should collect only the data they need to offer the services customers want.

Over time, will consumers become more comfortable with sharing information? I think so.