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Location tracking will change the way you shop

Technologies that follow you around the store could be a benefit or the latest privacy invasion

By Zach Miners
October 10, 2013 06:03 AM ET

IDG News Service - 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 an emerging area that combines location data, marketing and analytics, retailers are testing new ways to learn how customers shop and move about their stores, and targeting them with promotions and in-store maps on their smartphones.

The concept, sometimes called place-based marketing, uses detailed location information, often down to the shelf you're walking past, to drive sales and give retailers more information about foot traffic in their stores. That means picking up a trail of digital breadcrumbs from people's smartphones and mobile apps.

Some of those apps will push special deals to shoppers when they pass by a particular item. Not a Pepsi fan? Maybe you can be swayed with a discount coupon as you wander through the soda aisle.

Think of it as your grocery store trying to outsmart Google, or better yet, Amazon. Those are the players, after all, that brick-and-mortar stores see as their biggest competitors.

A challenge is to do it without trampling on customers' privacy. Users have grown accustomed to being tracked on the Web, even if they don't like it, but using Wi-Fi to track people as they move through a physical store can creep people out, as Nordstrom found out when it tried it last year.

Retailers hope they can persuade shoppers to trade a bit of privacy if they get something useful in return, like a better deal or some helpful shopping information.

To do their digital sleuthing, companies are taking different approaches. One strategy is to make the smartphone a more useful shopping assistant. One company, aisle411, helps physical stores digitize and map their inventory so customers can find items more easily. Users can create lists, browse recipes and search for products in participating stores. Searchable store maps can be accessed from the app in more than 12,000 retail locations, said CEO Nathan Pettyjohn.

The company uses Bluetooth "beacons" made by Estimote to detect when shoppers pass certain locations or aisles, so it can push them offers and other deals. The St. Louis, Missouri-based company sees itself as helping to fill the digital void that impedes brick-and-mortar stores' ability to compete with shopping channels online, Pettyjohn said.

"For any retailer who is questioning this, I would say to put yourself in Amazon's shoes," Pettyjohn said. "Amazon would probably want you to stay non-digital."

He spoke Tuesday during Place, the inaugural indoor marketing summit organized by Opus Research in San Francisco. The event attracted a dizzying variety of companies promoting their wares.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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