December 8, 2023

Mobile shopping apps are more popular than ever. Consumers regularly download and sign up for mobile apps for their favorite grocery stores, coffee shops, quick service restaurants (QSRs), and other retailers. For example, Whole Foods and Starbucks apps allow loyalty members to scan QR codes at points of sale to take advantage of personalized offers and pay conveniently with contactless mobile wallets.according to a 2022 NewStore SurveyNine in 10 consumers have at least one shopping app installed on their mobile device, and half use mobile shopping apps at least a few times a week. However, many consumers may not be aware of what personal information they are sharing with businesses. The same survey also found that 45 percent of consumers would not download an enterprise application if they were concerned about security or privacy.

Consumers are not fully aware of the potential privacy risks associated with using shopping apps. During the sign-up process, most shoppers usually agree to share personal data without reading a lengthy microfont user agreement. Their top priority is to take advantage of loyalty rewards and savings in a timely manner. With 90% of consumers using shopping apps and nearly half of consumers reluctant to download apps due to privacy concerns, it seems like a lack of understanding on the consumer side and a lack of transparency on the business side.

Typically, businesses track customer purchase data and analyze how customers interact with their apps. Common data points include browsing behavior, mobile battery and signal strength, and length of time spent on corporate websites. Some businesses also collect information about customers who interact with social media accounts, including the customer’s profile picture, username, email address, friend list, age, gender, and interests and preferences. Businesses can use this data to better understand customers’ shopping habits and demographic segments, such as education, race, income, languages ​​spoken, location, marital status, and the number of children or pets in the household.

Some businesses even collect sensory data, such as CCTV recordings of consumers in public places and recordings of customer service calls. Certain locations even allow for biometric facial recognition data collection. While this data can help businesses understand their customer base, some businesses also profit from it. Merchants like Kroger, Safeway, and Walmart all have their own retail media networkthese advertising platforms allow businesses to sell customer information to data brokers and advertisers.

Customers can opt out of tracking, but the process can be confusing and cumbersome. Every business has a different privacy policy and different levels of consumer controls to opt out of tracking and selling data. Some retailers won’t allow customers to earn loyalty rewards unless the data is shared.Comprehensive Consumer Data Privacy Legislation exist in some states. The states of California, Connecticut, Colorado, Utah, and Virginia allow customers full control over their data.

Consumers should double check what data they agree to be shared with businesses the next time they download a shopping app. Retailers should also be more transparent about the data they collect from customers and how they use it to ensure customer trust and loyalty.