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Indoor Location: What’s the Real Opportunity? (Hint: It’s not Coupons)

A number of surveys over the past few years have painted an ambivalent consumer picture of location-based mobile marketing. These surveys are very consistent: when there’s a clear value exchange consumers will share location. However consumers also express concern about privacy issues.

The latest survey data in this vein is from PR firm Walker Sands. In its “Future of Retail” survey of 1,400 US adults, Walker Sands found rewards and coupons would persuade people to accept in-store push notifications and indoor location awareness. User experience improvements such as faster checkout and personalization were less interesting to respondents.

In-store location acceptance

Privacy, security concerns and fear of spam were the main reasons that consumers might resist indoor location and location-related push notifications. Again, these kinds of sentiments are consistent with earlier survey data.

These findings are mostly abstractions or hypothetical because, generally, people haven’t experienced beacon-based marketing or indoor location. The survey found “only 6 percent of consumers have used in-store beacons.” In real numbers that’s 84 out of 1,400 respondents. I’m even skeptical that many people have actually interacted with beacons.

People interacting with beacons probably won’t know it; they’d simply get a push notification in a store or mall or airport. Some of these people may also be speculating about beacon interactions or simply trying to live up to some self-image as an early adopter. (People often provide “aspirational” responses in surveys.)

These and other survey data about location targeting and indoor location tend to be crude. It’s also difficult in an online survey to convey in-store experiences in the abstract.

location and privacy concerns

The biggest opportunity with indoor location and marketing in retail is not pushing digital coupons — this may be what consumers think they want — it’s improving the customer shopping experience with content, convenience and personalized recommendations. Consumers (and researchers writing surveys) typically don’t or can’t envision these scenarios because they haven’t actually experienced them.

The closest we get to what I’m describing in the survey above are “faster checkout” (34%) and “personalized recommendations” (11%). But most people haven’t had an experience of an in-store mobile checkout or something like personalized recommendations or content that enhances their shopping experience.

Yet better in-store service and experiences is exactly what retailers should be working on — and I’m told by Swirl‘s Rob Murphy that some are — though most are still in the 1.0 phase of experimentation with indoor location or remain on the sidelines. Interestingly, however, Bluetooth is being built into LED lighting and WiFi access points. So in a few years “beacons” may be unnecessary.

Better in store experiences are the only thing that will beat back the Amazon juggernaut and onslaught against traditional retail. The closing of the delivery window (i.e., same day) and the availability of free shipping to Prime customers have created an existential threat to traditional retail.

Murphy discussed with me the way that Swirl’s “mobile presence management” platform is seeking to help retailers deliver these improved customer experiences in store, using indoor location. The company has evolved from a beacon provider to a more comprehensive, technology agnostic platform for retailers to conduct proximity marketing, capture location data and offer in-store personalization.

Murphy and I had a long discussion about interesting ways to create real value for consumers in stores using location tech. He says his company’s ultimate goal involves “using data about how consumers interact with physical stores to turn the physical store experience into a much more personalized one.”

He’s exactly right. There are powerful ways, using location technology, to create better retail experiences, holistically, online and off. If you’d like to understand these more clearly and how location data are dramatically changing digital marketing, come to the Place Conference on September 21 in Chicago.

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