Great answer Nowell, I think the "big brother is watching"complex is the biggest challenge by far. However, i've seen in the past, when I downloaded a retail clothing app, it had a disclaimer, like every app, saying it wanted to see "my location, photos, certain data," so I unchecked the location box. When I unchecked it, a push message immediately popped up and said, "Are you sure? You might miss out on exclusive deals near you" Curiously, I reconsidered and kept the location Bluetooth box checked.
Later that week, when I entered one of their stores, they immediately pushed a message to me welcoming me back and gave me a quick overview of my loyalty points. But this is the exception to the rule! The app is the Netherlands H & M app, and in general, I dont see a lot of European brands taking advantage of location-marketing like beacons...but thats another discussion
I think the solution to the big brother complex is to make sure you're engaging them in the right time and frequence & not overdoing it, like you said. But also, to encourage them to opt-in so that they won't miss out on the deals. Using consumer data is key too. If I were to keep the location BlueTooth box unchecked, the retailer would have to creatively think of better ways to engage me.