May 12, 2014

Depending on whom you ask, Disney's MagicBand is either the best thing that's happened to tourism or an "NSA-esque tracking device."

The divide over Disney's wristband that connects with RFID readers to become a park entrance ticket, credit card, hotel room key, and more is a high-profile example of the "convenient vs. creepy" debate set off by a new dynamic duo: The Internet of things (IoT) and wearable tech.

"We're in a period of experimentation with wearables," says J.P. Gownder, VP and analyst at Forrester Research. "It's still the Wild West."

[Read about Esurance's wearable tech initiatives]

Yes, there will be paranoia and rejections as stores, restaurants, and ballparks try out wearables paired with IoT to track customers at their locations and offer them discounts and services. Yet, at the same time, more and more users -- especially among the younger generation -- are flexible about privacy if you give them a great experience, Gownder says. And privacy fears tend to subside over time

"There was an uproar over Google Street View cars invading your privacy in 2007, but that doesn't bother us anymore," he says.

Here are three ways IT, product development, and marketing groups can design wearable systems while honoring privacy.

1. Focus on VIP experiences and incentives
Identify your loyal customers and motivate them to participate in a rewards experience -- such as offering discounts on store products or a seat upgrade at a baseball game -- in return for opting in to a sensor-connected service.

Such services already exist using smartphone apps and Bluetooth-enabled "beacons." For example, Apple's iBeacon device (which works with iOS7 devices only) is now installed in Apple's retail stores, as well as in Duane Reade pharmacies and various Major League Baseball stadiums.

Read the rest of this article on InformationWeek