The appeal to retailers of mobile location technologies is the possibility that data gathered from wireless smart phones and tablets can be used to boost sales by sending them targeted offers and messages.

It also raises privacy concerns about the possible abuse, leakage or theft of personal data.

But a report released this month by Ontario’s privacy commissioner says mobile location analytics without identity can still give retailers a good understanding of their customers and meet privacy worries.

It also approvingly cites privacy and security strategy of Toronto-based Aislelabs, a cloud-based retail analytics firm whose products capture data from in-store wireless devices.

The company’s Flow service captures only MAC addresses of Wi-Fi enabled wireless devices, uses strong cryptographic hashing to ensure those can’t be personally identified, stores data in a secure cloud infrastructure and allows consumers to opt out of information being grabbed. Its Engage service captures more data through GPS and Bluetooth, but only with customer consent.

Aislelabs can create aggregated anonymous reports from Flow including statistics on the number of shoppers, repeat customers, window conversion, time spent in store, top walking paths and heat maps for frequented spaces. No personally identifiable information is disclosed to the retailer.

Reports are delivered through Web-based dashboards where all information transfer is encrypted, the report says.

While such an approach wouldn’t give enough information to send targeted messages to individual consumers, the report says enough would be gathered for retailers to figure out how to optimize staffing, store layouts and the performance of marketing campaigns.

“At its core,” the report adds, “respecting the user means that, when designing or deploying an information system, the individual’s privacy rights and interests are accommodated right from the outset. User-centricity means putting the interests, needs, and expectations of people first, not those of the organization or its staff. This is key to delivering the next generation of retail experience because empowering people to play active roles in the management of their personal data helps to mitigate abuses and misuses.”

Through its collection and analysis of MAC addresses and signal strengths, mobile location analytics technology could, in theory, tailor marketing to the shopping individuals, the report argues. But such systems, it says don’t have to be designed to do that.

AisleLabs is still able to deliver targeted messages to shoppers from the data collected through Engage. The platform also pulls in data from store point of sales, CRM and email marketing.

On Thursday Aislelabs said it has received venture funding from Toronto’s MaRS IAF, Rho Canada Ventures, Salesforce.com and a number of strategic angels. The investment will be used to accelerate sales and