August 1, 2013, 3:43 PM

Where should retailers draw the line on tracking consumers' behaviors?

Recent news reports suggest retail chains are testing technologies that allow them to track consumers' movements in stores by following the Wi-Fi signals from shoppers' smartphones.

Recent news reports suggest retail chains are testing technologies that allow them to track consumers' movements in stores by following the Wi–Fi signals from shoppers' smartphones. That extends into the bricks–and–mortar realm the kind of tracking marketers already do online with cookies and pixels. All this data can help marketers personalize offers, but it can also make shoppers uncomfortable. So how should retailers balance the value of customer data with privacy concerns?

Where do you think retailers should draw the line in tracking consumers' behavior? Join the discussion at Internet Retailer's Facebook page or on Twitter, using the hashtag #IRDiscuss.

"As long as you are honest and transparent about the data you are collecting and why—and you give customers the opportunity to opt out—there's no issue with it. This means marketers have to educate their customers about the risks and be honest and transparent in their practices. The audience will always dictate what is fair and what is not. The more honest and transparent you are, the more people will opt in."

– Jason Falls, vice president, digital strategy, e–retailer CafePress Inc.

"Retailers must understand the hypercritical role trust plays in relationships to brands and loyalty. If—without even meaning to—data tactics appear sneaky or snoopy, trust can be shattered and a customer lost forever. Retailers should proceed with an excess of caution and transparency when it comes to tracking and other data practices. They should disclose to the customer what's being collected and above all, what's in it for them."

– Rebecca Lieb, analyst, business research and advisory firm Altimeter Group

"Transparency is the key to these sorts of activities. Shoppers often will agree to provide their information in return for value. If retailers are transparent about their data uses and let consumers opt out of uses that make them uncomfortable, they can minimize concerns. And if value—such as coupons or a more personalized shopping experience—is provided in exchange for that data, shoppers generally tend to respond positively.ÊIt is the unexpected uses of data that create friction."

– Lisa Sotto, global privacy and data security practice head at law firm Hunton & Williams LLP

"If there's a robust way to opt out, companies should be able to do behavioral marketing, though sensitive areas—like health, sexuality and location—should probably only be collected and used with permission."

– Justin Brookman, director, consumer privacy, Center for Democracy & Technology

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