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SP360: Service Provider

Retailing has always been a tough business.  But, the move to online shopping, the challenging economy and changes in shopper’s behavior has placed even more pressure on traditional retail margins.  Retailers are constantly looking for ways to get more people in to their store and to spend more.  Traditional retailers have long envied the massive amounts of valuable data that online retailers have available to help them better understand customer behavior and implement winning marketing tactics.  Online retailers know such valuable information as: how frequently customers return, how long they spend on the site, what they looked at but didn’t buy and where they went before and after coming to the site.  With this information, online retailers are able to rapidly adjust prices, promote certain items, and re-configure the layout of the site in almost real-time in order to increase the probability and value of a sale.  None of these data and insights has been available to bricks-and-mortar retailers -- until now.  The increasing availability of Wi-Fi in retail locations is changing all of that.

Shopping malls and retailers are increasingly offering Wi-Fi to their customers as a service to connect their mobile devices to the Internet.  Hidden in this valuable service to the mobile user is an incredible amount of information and insight that retailers can exploit to deliver tangible value to their bottom-line.  In a previous blog, I identified 8 core technical capabilities available in many Wi-Fi networks that allow the collection of massive amounts of useful information that can be turned into key enablers of business value.  Hyper-sensitive location information, device details, identification of returning customers, and sophisticated path analysis are just some of the shopper data that are captured by the Wi-Fi networks.  Best of all, retail venues can now effectively collect valuable information from anyone who enters their store with a Wi-Fi activated mobile device in his pocket.  With over 50 percent of adults carrying Wi-Fi enabled smartphones, and growing, retailers can now capture information on the majority of their shoppers.  However, this does not raise personal privacy issues because only the MAC address of the device is collected and the information is aggregated across all users.

Aggregating the information available from the Wi-Fi access points provides unique insights into where people go, their common paths, and most visited places. Mall owners, for example, are using this detailed data to justify higher rents for stores in high-trafficked areas or to measure the impact of signage on customer traffic patterns. Trend analysis and history comparisons of data can show the effectiveness of changes in marketing programs or store layout. Retail chains are using footfall traffic patterns derived from Wi-Fi connection data to help them better locate new stores in highly trafficked sites of target shoppers.  Shopping malls and large box retailers can use the data to improve operations and security. Real-time shopper traffic flow patterns highlight congestion points and areas demanding more shop assistants, cashiers or security guards.

Retailers are combining the location and user information from the Wi-Fi access points together with customer relationship management (CRM) and customer loyalty data to provide personalized experiences and offers to shoppers at points of purchase in the stores. Equally, retailers are combining location-based services and shopper services to provide additional product information and help customers navigate throughout the store.  While these Wi-Fi Big Data services may raise privacy concerns, shoppers are typically receptive to the idea if they have control over how their information is used and they are getting real value in return for sharing it with the retailer.  Our mobile user research confirms that shoppers are interested in an enhanced in-store shopping experience (52 percent were either somewhat or very interested) because they think that it will make them more efficient and enhance their shopping experience. Mobile users particularly liked the idea of personalized deals and coupons that would be presented when they were looking to buy something, rather than before or after as is now typically done.

Despite concerns of show-rooming and loss of in-store sales to online purchases, many leading retailers are embracing mobility and including it as an integral part of their strategies. And many are outfitting their stores with public Wi-Fi access as a cornerstone of those strategies.  Wi-Fi value-added services not only allow retailers to compete on more equal terms against the data-driven world of online retailing but the returns more than justify the investment in the Wi-Fi infrastructure.  Retailers are finding that value-added services and insights are driving up customer spend, store dwell time, and allowing them to run more effective marketing campaigns, resulting in a better overall customer shopping experience.

Further details on how service providers can create new and innovative sources of value from Wi-Fi can be found in our recent white paper:  Wi-Fi: New Business Models Create Real Value for Service Providers

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