Privacy and prediction: how useful are geo-tracking data for predicting consumer visits?

Unnati Narang () and Fernando Luco ()
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Unnati Narang: University of Illinois at Urbana Champaign, Marketing
Fernando Luco: Texas A&M University, Economics

Quantitative Marketing and Economics (QME), 2025, vol. 23, issue 4, No 2, 523-544

Abstract: Abstract Accurately predicting consumer visits is critical for businesses to plan resources and serve their customers better. We examine the extent to which geo-tracking data about consumers’ locations can improve the ability of businesses to predict total visits to their store. Given the sensitive nature of geo-tracking data, we also examine how potential privacy regulations that restrict such data may limit their usefulness for prediction. Using proprietary data from a safe-driving app with over 120 million driving instances across 38,980 app users and aggregate data on the total number of visits to over 400 restaurants in Texas, we quantify the value of geo-tracking data by training machine learning models to predict total visits to a restaurant one week ahead. Our results show that geo-tracking data improve the performance of prediction models by 10.76% relative to that of models that use demographic and behavioral data only. Simulation exercises that limit what data are tracked, where and how frequently these data are tracked show a decrease in the predictive performance of models that use geo-tracking data. However, the decrease varies by the type of restriction; regulations that restrict what data are geo-tracked (i.e., summaries of driving behaviors) result in the largest decreases in predictive performance (13.78%), while regulations that restrict where users are geo-tracked (i.e., within a few miles of a business location) and how frequently result in smaller decreases (5.52% and 3.15-3.41%, depending on the frequency). Importantly, models with geo-tracking generally outperform models that do not use any geo-tracking data by reducing the extent of overpredicting and underpredicting visits. These findings can assist managers and policymakers in assessing the risks and benefits associated with the use of geo-tracking data.

Keywords: Mobile apps; Consumer location; Geo-tracking; Privacy; Machine learning; M31 (Marketing); M38 (Govt policy and regulation); D12 (Consumer Economics: Empirical Analysis); C53 (Forecasting and Prediction Methods); C55 (Large Data Sets: Modeling and Analysis); L81 (Retail and e-commerce) (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11129-025-09299-2

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