Transparency is key for marketers using location-based micro-marketing, expert says

Apr 29, 2014 by Jeff Falk

Marketers have recently latched on to Apple's iBeacon technology, which extends location services in its iOS mobile operating systems. iBeacon is being used in Major League Baseball and by a number of companies to hyperserve customers based on location.

Utpal Dholakia, professor of marketing at Rice University's Jones Graduate School of Business, is available for news media interviews to discuss how iBeacon may influence people's attitudes and behavior and what the technology means potentially for marketers.

The technology uses Bluetooth to track a customer's movement through stores,and event venues; it relays information about shoppers' interests and allows marketers to not only gather information, but also send consumers promotional items based on their time in the aisles.

"My sense is that there will be stark differences in how different customer segments react to being tracked in this manner," Dholakia said. "In a broad sense, the iBeacon technology is not that different from what apps like Foursquare and even Facebook Places do already. So the 45 million users of Foursquare plus users of other geotracking apps should have no problem. On the other hand, a significant number of users are likely to be suspicious and skeptical to begin with."

Dholakia thinks there is a trade-off between privacy and the tangible benefits associated with giving it up. "In many of the examples of iBeacon's proposed uses, marketers will provide compelling incentives to consumers to allow them to be tracked," he said. "To the extent that consumers get something valuable in return, my prediction is that they will embrace iBeacon. Of course, a lot depends on how Apple and its marketing partners explain this to consumers. Transparency is crucial."

Dholakia's research interests lie in studying motivational psychology of consumers and online marketing issues such as virtual communities and online auctions. He also studies relational aspects of consumer behavior.

Explore further: Apple guides shoppers inside stores with iBeacon (Update)

More information: Jones School interview with Dholakia on Apple's iBeacon technology: business.rice.edu/JGSB2011_2Co… n.aspx?id=4294973454

add to favorites email to friend print save as pdf

Related Stories

Daily deal companies are here to stay, according to consumers

Sep 14, 2011

Despite recent news reports questioning the long-term viability of daily deal companies, a new study from researchers at Rice University and Cornell University shows that the companies are more popular than ever among consumers.

Research: Facebook fan pages are effective marketing tool

Feb 18, 2010

Companies that use the popular social-media site Facebook and its fan page module to market themselves to customers can increase sales, word-of-mouth marketing and customer loyalty significantly among a subset ...

Technology reveals what kind of shopper you are

Nov 28, 2013

U.S. marketers and mobile app developers have developed creative new ways to help shoppers find what they want for less. But these inventive techniques also allow for more aggressive tracking of consumer ...

Recommended for you

Hackerspaces used to turn ideas turn into reality

4 hours ago

At HeatSync Labs, the tables are littered with computer chips, pens, pads and tools while the room is abuzz with the chatter of would-be inventors hoping to change the world—or just make cool things. They are part of a ...

China Telecom profit rises as mobile data grows

5 hours ago

China Telecom Ltd., one of the country's three main state-owned carriers, said Wednesday its profit rose 11.8 percent in the first half of the year as its Internet and mobile data businesses grew.

Snapchat valued at $10 bln

5 hours ago

US media on Tuesday reported that Snapchat was valued at $10 billion based on funding pumped into the startup by a powerhouse Silicon Valley venture capital firm.

User comments : 0