Results Count ... everything else is conversation.: Place: The final frontier … They can “see” you now!

Trends and issues related to tracking your location

Image Credit: Stuart Miles

Without you realizing it, that smartphone you are carrying announces your presence, and leaves a "breadcrumb trail" of data everywhere you have been. Your smartphone is literally like your internet cookie … it enables retailers and space managers to track your location and behavior. Location based data and analytics is one of the most dynamic trends impacting the future of retail stores and space. It is also being used by many other institutions to plan and manage services. What are the risks and rewards of location based tracking … for retailers and you as the consumer? One thing for sure, if your phone is turned on, someone somewhere is probably watching … and will be more active about offering personal assistance.

Why this is important: Knowing when, where and how people move through "Place" is a huge benefit to retailers and space managers. Consumers can also benefit with a better experience, but there are some trade offs as well.

Place … The final frontier!

I was fortunate to participate in the recent Place Conference in NYC. And, Place is the appropriate, meaningful title for the times. Retailers have always had a "place" called stores. Increasingly, stores have come under more pressure from both declining traffic and eroding margins. Retailers need to find new ways to optimize space, increase customer traffic, and most importantly … convert sales.

Location analytics is critical foundation for retailers to add a 5^th "P" to their four pillars of marketing. To paraphrase that famous opening line from the Star Trek:

"Place: the final frontier. These are the voyages of Location Analytics. It's mission: to explore strange new worlds, to seek out strange new [patterns of consumer behavior] to boldly go where no [retailer] has gone before."

They can "see you now" – Location Technologies and Trends

Most stores have has some sort of "break beam" technology to count customers going in and out the door. While some traffic data is better than none, such basic "footfall" data provides no insights into what is happening in the store. Location based tracking inside spaces and stores is literally like "turning the lights on" in order to be able to study consumer behavior across the store and within departments.

The first attempts to understand location and consumer traffic were largely observational. Observers were literally placed at strategic store locations and did traffic counts, with some adding behavioral observations. This is costly and not scalable across stores.

Image Credit: Mapichai

Place technology and location analytics is advancing rapidly. There are a number of technologies now available, and some have amazing accuracy. Here are some highlights of major location navigation and tracking technologies:

Video – Actual recordings of your physical movement and presence in store spaces

Video was one of the earliest forms of studying traffic patterns in stores. Cameras mounted at strategic locations, within endcaps, and even security cameras in the ceiling record traffic. Better algorithms and software have evolved to automate customer counts, as well as record attributes such as gender and relative age.

A major advantage is the proven video camera technology. With better algorithms and coding, extracting data from video is getting easier, but is still time intensive. A primary concern is not recording a customer's unique physical identity along with location attributes.

Beacons & Sensors – Tracking unique phones using Wi-Fi and Bluetooth

There are a variety of different sensors that have been developed to detect your smartphone. While they can't identify your unique identity (unless you opt in to be tracked on an app) these sensors track each unique phone MAS address. Some sensors are based upon Wi-Fi signals and can triangulate your location within a space. Sensors that track Bluetooth signals from smartphones can track your location to within a meter.

The advantage of this technology is that a retailer can literally "geofence" their store and track movement between zones and departments. The disadvantage is that the consumer must have their phone turned on in order to be tracked. To get consumers to turn on their phones retailers are broadcasting offers, coupons and services through their apps.

LED Lights – Light arrays in the ceilings that emit a signal and track your phones

The new style LED lights are essentially digital technology. Time and space does not permit a full explanation of the technology in this post. Suffice it to say that new LED lights installed in retailer ceilings can be programmed to emit a signal invisible to humans, but picked up by smartphones.

There are a couple of advantages to this technology. Retailers are moving to replace old inefficient lighting with LED, so there is a potential ROI payback in the switch over. Second, this technology can be very precise down to 5 centimeters, which can literally guide your phone to a specific library book or model on a shelf. Disadvantage is the smartphone must be turned on and out in the open to receive the LED signal. By incenting consumers to use their smartphones for navigation, retailers are overcoming the barrier of having phones out and on.

Magnetic Mapping – Using existing magnetic fields, no sensors required!

I was blown away when I heard about using the earth's magnetic fields to enable location based analyses and mapping. Again, the technological explanation is more than space will allow. But essentially, each place on earth, including buildings has a unique magnetic signature. Once mapped, software can be installed on phones to "read" the space without any sensors installed or present. Likewise, scans can be used to determine how many people are present in a space.

The downside is that this is cutting edge technology that still needs to be proven. Projects are underway to map major buildings and cities so that the technology can be tested and deployed. The major advantage would be tracking and navigation in large space at very low costs.

Bottom Line: Technology Takeaways

They can see you now in the sense of detecting the presence of your unique phone MAS address, and from that can track your movement. The key understanding for us as consumers is that they literally can see you as a person. They can't see you personally, and they can't see your identity UNLESS you let them. And, if you don't want any of this to happen to you, you can turn off your phone entirely.

So what does all this mean for consumers? What will you trade?

With all of the recent headlines on identify theft and spying, some consumers are understandably creeped out by the fact that they can be tracked. First, remember that they cannot track you the person.

Second, nothing in life is free! Consumers today expect free Wi-Fi. They want to be able search, and even place orders from their smartphones. All of us like coupons, discounts, priority and personalized service. If we partake, they can see and track our phones.

LBMA reports that 72% of consumers will trade personalized data for better experience

There are three operative words here for consumers: 1. Choice (to opt in or out), 2. Better and 3. Experience.

So what does all of this mean for retailers? Is there an ROI

Location tracking and analytics is like proverbial teenage sex … everyone is talking about it, but relatively few know how to do it. But, a lot can be learned from early adopters and best practices. One of the best presentations at the Place Conference was by Jeff Donaldson, SVP from GameStop. He described a seamless, location based, personalized experience of knowing consumers when they entered the store, reviewing past purchases with them, enabling navigation to specific items, and enriching their experience with rich content and demos.

Some of the best retail implements are not saying much … they realize location based analytics is a real differentiator and the ROI is in the form of increased basket, repeat trips and purchases from the best core customers.

What this emerging story means for retailers is that they should NOT deploy location tracking because they can. Retailers will only realize ROI when they create better experiences that differentiate their place and add value in ways that consumer will want to return.

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