Privacy is an important factor in the customer experience. Recent events such as the Target data breach have called attention to the fact that consumers value data security, and they need to feel comfortable with the way their data is used.

Because BLE and NFC enable interactions with the customer, they raise security questions that need to be answered before they can be safely implemented as part of a retail strategy. They have different operating principles and therefore raise different security concerns.

Passive vs. Active

BLE

Bluetooth Low Energy is passive in nature. If a consumer has a Bluetooth-enabled smartphone and the right app, he or she will receive push notifications based on location within the store, time spent at a given location, and items in their vicinity.

Some apps integrate the in store and online shopping experiences into an omnichannel retail approach that reads customers’ purchase histories and bookmarked items.

In BLE, the data access happens behind the scenes. As long as the customer’s smartphone’s Bluetooth is enabled and the app is installed and open (iOS7 devices can automatically open apps), he or she can receive push notifications.

NFC

Near-field communication is active in nature. In order to receive information from an NFC interaction, the customer has to have an NFC-enabled smartphone and the right app, and he or she must engage the NFC transceiver by holding the smartphone close to it.

Some apps integrate the in store and online shopping experiences into an omnichannel retail approach that reads customers’ purchase histories and bookmarked items.

In NFC, the data access happens only when the customer engages an NFC transceiver.

Consumer perception of notifications

BLE

With BLE, the consumer experiences push notifications without actively requesting each notification. If used appropriately, these notifications can enhance the shopping experience by offering relevant, helpful suggestions.

A large concern for retailers is overuse of push notifications. If consumers feel bombarded by notifications, they are likely to turn off one of the elements in the BLE communication hierarchy so as to disable those notifications. In some instances, consumers may feel inclined to uninstall the app from their smartphone. These scenarios represent loss for the retailer because they signify a negative response to the BLE campaign and prevent the consumer from being reached by further campaign materials.

NFC

With NFC, the consumer experiences notifications only when he or she actively requests each notification. The advantage to the active approach is that the consumer feels in control of his or her experience. This means he or she is likelier to have a positive or non-negative response to NFC campaigns. Customers won’t feel bombarded by notifications.

Customer perception of data use

BLE

Customers may feel suspicious of BLE apps using their data, especially payment information, to tailor their retail experience. There’s a balance between the personalization of the customer experience and the amount of data the customer needs to make available. Research shows that customers are very receptive to personalized experiences. Additionally, apps should be using data that the customer provided to the retailer at some point (e.g. items in that customer’s retailer-specific online shopping cart).

NFC

NFC faces many of the same problems that BLE faces, but the customer’s perception is affected by the active nature of NFC. When a customer sees personalized content, it’s because that customer engaged an NFC element within the retail environment; the personal content becomes associated with the personal action.

Payments

BLE

There are a few proposed BLE payment structures. One such structure merely substitutes BLE for NFC in the current mobile payment system. One requires verbal confirmation between the customer and a sales associate, at which point the transaction is billed to a verified PayPal account. The last allows the customer to scan and purchase items on his or her own without the need for a cashier.

Experts predict that these payment methods, should they see significant acceptance, will be governed by a stricter set of standards and encryption than what currently governs traditional Bluetooth communications.

NFC

NFC payments use mobile wallets and EMV terminals to complete a transaction. These transactions are secure due to EMV standards and the very short communication distance between the terminal and the payment device (which minimizes the opportunity for the transmissions to be intercepted).