GUEST POST: Todd Lewis, Spatial DNA Informatics
Bricks-and-mortar locations are undergoing a revolution similar to e-commerce in the mid-2000s, with personalized shopping experiences linking the online and real-world experience
Retailers are struggling with brand loyalty at the same time they are trying to come to terms with the massive troves of data available to them. Retailers that serve as hubs (big-box and category specialists) find themselves competing head-to-head with brand stores from their suppliers. And data is the battleground.
Who owns the intelligence on the customer experience – and how is this leveraged?
Consumer brands are interested in providing unique shopping experiences for their loyal customers. Category retailers are determining their best merchandising strategy – what brands and products are attracting consumers. Both are using in-store location intelligence as a competitive weapon.
Convergence is the name of the game – how to collect and organize information from social media profiles, e-commerce site visits, online comparison shopping while in-store, and the explosion of apps, sensors, and the Internet of Things (IoT), while respecting consumer privacy. In the sensor space, there are four categories of devices that define existing or new ways of analysing shopper behavior:
- Camera sensors for traffic counts and footfall mapping
- Beacons offering analytics and in-app experiences
- Wi-Fi-based mobile device sensors
- Li-Fi leveraging LED lighting for indoor navigation and communication
Interestingly, and according to a 2014 study conducted by OpinionLab that gauged consumer sentiment on the subject of retailers’ use of in-store tracking technologies, 48% of consumers said mobile location tracking has no impact on where they choose to shop.
Additionally, consumers expect to be compensated by retailers for being tracked, either by receiving price discounts (61%), or getting free products (53%).
Traffic and Behaviour Sensing Challenges
Traffic counters enable a retailer, when integrated with Point-of-Sale transaction data, to determine a number of operational factors affecting store performance. Conversion – the percentage of transactions for the traffic through the store in a given period – is the ultimate metric for understanding store performance. But traffic counts also inform trends based on season, weather, and contribution of local activities within the area. This information is critical for staffing decisions, inventory management, and evaluating the general success of marketing campaigns.
Harnessing beacon, Wi-Fi, and Li-Fi technologies now provides additional ways of understanding traffic and the in-store experience. With these technologies, we can track mobile phones and wearables, we can understand how indoor navigation applications are influencing behaviour, and we can respond to in-store traffic patterns with changes to product placement, signage, displays, and the response times of customer service representatives.
Sensing and positioning technologies are of particular interest to digital content providers. By determining that a device is present in front of signage or digital displays, and being able to uniquely identify the device (either anonymously or through an opt-in process), digital content can respond to the presence of traffic, and measure outcomes.
With presence detection, content can be switched from attractive (“come look at me”), to engaging (using gamification and other engagement techniques). By placing sensors at the content display, and at points where signage is driving traffic to, we can measure the effectiveness of content delivery as traffic conversion.
The challenge with sensors, is that they each have inherent strengths and weaknesses:
- Li-Fi – used solely for indoor navigation, it has accuracy of 10 cm, but requires an installed app and having the phone out and exposed to light;
- Magnetic – used solely for indoor navigation, it has an accuracy of 15 cm, but it too requires an installed app;
- BLE (Bluetooth low energy) – can track devices emitting Bluetooth signals, has an accuracy of 1 metre, but penetration of wearable technologies means that less than 20% of total traffic is counted;
- Wi-Fi – can track devices emitting Wi-Fi probe requests, has an accuracy of 3 metres, with traffic count accuracy varying between 45% and 70%, depending on local demographics;
- Camera – includes traditional traffic counters and video cameras, has a count accuracy exceeding 95%, some systems can do limited facial recognition, but identifying repeat visitors is not possible.
At PeopleFlow, we’ve built and continue to optimize a sensor-agnostic, real-time location determination and analytics platform that scales from hyper-local (a store) to networks (advertising, content delivery, retail chains), to national views of people and vehicular traffic flows.
Noteworthy Indoor Positioning Advancements
Acuity Brands offers an innovative solution that integrates with our PeopleFlow platform. Its ByteLight LED lighting service can be used to detect and measure a mobile device’s precise location within 10 cm, providing highly accurate indoor-positioning and navigation capabilities to large facility operators, including shopping malls, airports, and distribution centres. Coupled with BLE technologies integrated within each bulb, the service enables indoor navigation, push-messaging, event notification, and building systems response to people movements.
Fathom has just introduced its BLE device management solution. Fathom harnesses latent GPS signals which can still be picked up indoors, determines the device location, and can then identify and track the movement of BLE devices on wearables or placed products within a retail environment.
Placemeter provides an urban intelligence platform leveraging video for collecting and classifying traffic counts and in-store dwell times at scale across multiple locations, or even across cities.
And Innerspace has introduced a device combining Wi-Fi and BLE beacon, along with an indoor scanner. The indoor scanner can be scheduled to automatically scan an environment and build a three-dimensional point cloud from which floor layouts and display placement can be derived into an indoor map.
The retail landscape continues to shift rapidly. The onus on bricks-and-mortar stores of all sizes to provide customers with exceptional, unique in-store shopping experiences while grappling with the explosion of available data has never been greater. But relying on a cutthroat price war to outfox your competition will not sustain your business over the long haul.
The only way that can possibly be achieved is through location and customer intelligence – knowing exactly who your customers are, understanding the journeys they took to get to your location, learning how to serve them better, and alerting them to products and services that appeal to them.
Todd Lewis is President and CEO of Spatial DNA Informatics. Spatial DNA builds and supports the PeopleFlow platform and brand. Todd is an entrepreneur and specialist in location-based technologies and business process redesign, with expertise in retail, local government, public safety, and aviation.