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How location tracking will change the way you shop

Zach Miners | Oct. 10, 2013
Can't find an item in your grocery store? Some retailers want to help, but it could mean tracking your every move as you wander through the aisles.

In addition to apps like aisle411, there are data gathering companies like Euclid, Path Intelligence and GISi Indoors that track where consumers go and how long they stay there. There are Bluetooth beacon makers like Estimote, Qualcomm and StickNFind. There are household names like Nokia, which is focused on indoor mapping through its Here business.

And there are Wi-Fi hotspot operators like Boingo Wireless, which detects passive changes in Wi-Fi signals on cellphones to measure foot traffic. The company is already using the technology in airports to give travelers estimates of security checkpoint wait times.

But while the players are many, they have one or two common goals: to give retailers more shopper information on the back end, so stores can better manage their inventory, layout and hiring practices; and to give shoppers more information on the front end, through maps, coupons and loyalty programs.

Path Intelligence is working on the back end. It uses laptop-sized receivers to map people's movements at a given location by reading radio-frequency signals sent between cellphones and cell towers. The technology is designed to be anonymous, so the location of the phones can be seen but not the user data stored on them.

The technology is being used in about 150 locations, including shops, malls and sporting venues, to provide information about where people go and how long they spend there. The company says its equipment is meant to be marked and clearly visible, though ultimately it's up to the retailer if they notify people they're being tracked.

Path's technology is useful, one real estate developer said, because it can help malls see whether people are going to a movie and leaving right after, or grabbing a bite to eat next door after the credits roll. That can help the mall decide whether to re-think its dining options.

Indoor marketing is different from e-commerce, which is geared toward online purchases. Rather, it's about everything that happens up to the physical point of sale -- something brick-and-mortar retailers know very little about.

"There is a lot of use for this information," said Bob Rosenblatt, a consultant and former chief operating officer at Tommy Hilfiger Group. Compared to consumer apps, a lot more activity happens behind the scenes, he said, because store executives are already accustomed to reviewing and analyzing data to make decisions.

Research by Opus suggests retailers might be on the right track. In the U.S., most people already use smartphones in stores to do things like look for coupons, compare prices or pull up product reviews, surveys have shown.

Indoor marketing builds on those habits, with the hope that consumers will allow the occasional pushed offer, or even some tracking, if they feel they are getting something out of it.


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