Thanks to GPS, the apps on your phone have long been able to determine your general location. But what if they could do so with enough precision that a supermarket, say, could tempt you with digital coupons depending on whether you were hovering near the white bread or the bagels?
It may sound far-fetched, but there’s a good chance the technology is already built into your iPhone or Android device. All it takes for retailers to tap into it are small, inexpensive transmitters called beacons. Here’s how it works: using Bluetooth technology, handsets can pinpoint their position to within as little as 2 cm by receiving signals from the beacons stores install. Apple’s version of the concept is called iBeacon; it’s in use at its own stores and is being tested by Macy’s, American Eagle, Safeway, the National Football League and Major League Baseball.
Companies can then use your location to pelt you with special offers or simply monitor your movements. But just as with GPS, they won’t see you unless you’ve installed their apps and granted them access. By melding your physical position with facts they’ve already collected about you from rewards programs, brick-and-mortar businesses can finally get the potentially profitable insight into your shopping habits that online merchants now take for granted.
The possibilities go beyond coupons. PayPal is readying a beacon that will let consumers pay for goods without swiping a card or removing a phone from their pocket. Doug Thompson of industry site Beekn.net predicts the technology will become an everyday reality by year’s end. But don’t look for stores or venues to call attention to the devices. “People won’t know these beacons are there,” he says. “They’ll just know their app has suddenly become smarter.”
This appears in the March 31, 2014 issue of TIME.