Gartner Analyst on "Laser Interactions" of Context Awareness

I heard a Gartner analyst speaking on "context aware marketing" the other day .He described the following scenario. The store knows who you are and where you are, when you walk in with your cell phone. When you pause briefly before continuing past the display of a kind of cereal you usually buy, the in-store camera notices, and immediately (within <1 second) sends you a coupon.

I see several problems with this:

1. All privacy issues aside, it will get intolerably annoying to constantly get pinged with coupons.
2. Is it even a good decision to "incent" a regular buyer with a discount, deus ex machina? If you usually buy the cereal, you will probably keep buying it. Maybe you didn't but it this time because you remembered you already had enough at home?
3. How long does it take before consumers figure out what is happening, and deliberately trigger the coupon-reward scenario (i.e., pause, fondle, replace and slowly walk on from each item they want to buy)?

I remain skeptical.