Retailers tracking shoppers' locations in the real world

A look at how stores can use their apps on your phone to access shopping habits.

ByABC News
June 5, 2017, 7:26 AM

— -- Shopping apps let you buy fast on your phone and offer discounts and rewards when you shop in-store. But for some retail apps, that convenience has a price: privacy. The way retailers online track your shopping habits with cookies, some brick-and-mortar retailers are using apps that access your phone's GPS to track your location in the real world.

The tip-off may be the timing of notifications that pop up when you are in close proximity to a store. We asked shoppers in Philadelphia if they had any unusually well timed app notifications.

One woman said that when she came to a certain location on 69th Street on her walk to work, an ad for the Gap popped up offering her a coupon to go shopping. Another shopper said the Urban Outfitters app seemed to know where he was, "Whenever I come within like 50 feet I get like, 'hey did you know there's a sale ending in a couple days?'" And others wondered why apps from Target and Macy's asked to access their location when they were installed.

According to University of Pennsylvania professor Joseph Turow, many shopping apps now use a phone's GPS to access your location.

"They have technologies that can follow you as you walk through sectors of the store and can connect to your data, so they know who you are," he said.

Turow's book, "The Aisles Have Eyes," details the new technologies that retailers are desperately trying to innovate as they lose market share to Internet sales -- and specifically Amazon.

"It goes back to show-rooming. Amazon told customers to scan barcodes and compare prices in-store to online prices," he said.

As retailers have steadily lost market share, the pressure to convert shoppers that are in the vicinity of their stores has them sending out coupons as shoppers get close. Turow points out that retailers track you on the Internet, if you look at running shoes on a site, that footwear company may use cookies to track you as you use Facebook or Google, and serve ads for the shoes you liked -- reminding you to come back and make a purchase.

It's not just your GPS they use to track you

This digital tracking is one reason conversion rates for online shopping are so high. Turow says brick-and-mortar retailers are attempting to mimic the online marketing experience, "essentially being able to track people in stores, like we track people online and then connect the two." He adds that in addition to GPS, stores are using Bluetooth, WiFi and even your phone's microphone to determine your location even though most shoppers have no idea they've granted the retail apps so much access to their device.

To experience this for myself, I install a bevy of retail apps and head to shopping districts in Philadelphia and San Francisco. While many of the apps I installed did not send me notifications when I neared their stores, two did. The Urban Outfitters app pinged me as I walked into their store in Philadelphia and then again a block away from their store in San Francisco.

The Macy's notifications were even more interesting. Their app sent a notification to my home screen as I entered their store in Philadelphia. Just as I put my hand on the door handle, a notification popped up saying "Welcome to Macy’s." Then while I was shopping in San Francisco the app sent two timely notifications: not while I was in a Macy's store, but while I was in other stores. Macy's sent me a 30 percent-off discount code when I was trying on shoes in a big department store that's their direct competitor. Then Macy's sent me another offer code while I was in a tiny independent boutique in a trendy shopping district. I was in the dressing room when my phone buzzed promoting 20 percent off at Macy's that day.

Turow says retailers hope they can convert your shopping trip into a purchase, even if it means enticing you away from a competitor.

In a statement to "Good Morning America," Macy's said that users are asked about those permissions during the installation process.

"After downloading the app, users are taken through a series of prompts that explain the permissions we ask for and the reasons why they would benefit from opting in to these features. These include permissions to access their geo-location enabled by GPS and/or Wi-Fi, approval to receive push notifications, as well as the opportunity to receive in-store messaging when they enable Bluetooth on their devices. These preferences can be changed at any time via the user's device settings and/or on the Macy's app's settings page," the statement said.

How to turn off location tracking on your phone

Some shoppers may appreciate that the stores they like are offering discounts and are smart enough to know when they are in a shopping area. But for those who don't want retailers knowing their location, here are some of the ways to limit that tracking:

On Apple devicesIn settings, go to privacy and location services.

You can see which apps are tracking your location and how frequently.

Click on each app and make your own choice for location services like "never track me" or "only when using app."

In Android Open Settings, choose General, Apps, Configure apps or App settings, finally permissions.

This shows you all the functions of your phone that an app has access to -- like the microphone, camera, and location tracking.

Choose how you want to alter location privacy from there.