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Tracking Technology Could be Multi-Billion Dollar Opportunity

Thursday, 19 Aug 2010 | 9:30 AM ET
Man watches home theater televisions at the Best Buy
AP
Man watches home theater televisions at the Best Buy

Cyriac Roeding may have found the Holy Grail of modern retail: A better way to lure shoppers into stores, and get them to buy something.

He does it with a smartphone app called Shopkick. Fire up the app when you enter a participating store, scan some barcodes with the phone’s camera, and the app offers you rewards called “Kickbucks”—virtual currency that’s redeemable for loyalty gift cards or other goodies.

A-list partners include Best Buy, Macy’s and Sports Authority stores in New York, L.A. and San Francisco.

Tangled Web//Profits & Privacy - See Complete Coverage
Tangled Web//Profits & Privacy - See Complete Coverage

"When you get there, all you tell them is your phone number, they pull up the record and it shows up on your receipt,” Roeding explains. “It says Shopkick discount, and it says $5 off."

Of all the data businesses long to collect about you, one of the most precious is where you are. The closer you get to a store, the more likely you’ll actually open your wallet.

That makes location-based services a potential multi-billion-dollar opportunity. And it explains the crowded field: with the advent of GPS-equipped phones, startups like Foursquare, Gowalla, Twitter and even Facebook are chasing location dominance, as are Google, Microsoft and Yahoo.

But will privacy concerns spoil the party? Scott Raymond, co-founder of location startup Gowalla, says no.

“We built privacy controls into the product from the ground up,” Raymond says. “So you always opt in to sharing your location with any given person.”

Still, some consumer advocates say location services are too close for comfort. Sites like PleaseRobMe.com have sprung up to warn people of the dangers of over-sharing their whereabouts.

Now, it’s up to the Shopkicks of the world to prove them wrong.

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Look for reports from Jon Fortt, Hampton Pearson, and Julia Boorstin, Wednesday August 18 through Friday August 20—part of CNBC's specal series "Tangled Web: Profits & Privacy."

Questions? Comments? TechCheck@cnbc.com And you can follow Jon Fortt on Twitter @jonfortt

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