Some years ago, before tracking technology could offer what it does today, I set up an experiment with a supermarket group in the Czech Republic to identify how customers moved through their stores and determine how we could influence this with layout, merchandising and the use of point-of-sale material. My personal experience as a enduro mountain bike racer meant I was familiar with the tags that race organisers used to monitor our progress around a route. These were far from the sophisticated GPS equipment used today and required the tag to pass beacons along the route to register, but they were the only accessible option then, so we fixed tags to shopping trollies and set beacons at key points around the store.

The tags, which were individually coded, registered the path of the trollies around the store on a map on a computer. Don’t laugh, this was state of the art at the time! We were all set to go when a government inspector turned up in Prague and closed us down, on the grounds that it was an invasion of customers’ privacy (I wonder what he’d make of how things have turned out!). He insisted that if we wanted to conduct this research we would have to get each customer with one of the tagged trollies to sign and authorisation form. After assessing the situation we chose to shelve the exercise and we never got around to re-opening it.

I’ve been fascinated with tracking technology ever since and have been involved in a number of programmes designed to optimise store layouts. Because of this I was drawn to an article by Devanshi Garg in iMedia Connection last week about Bluetooth Low Energy technology or “Beacons”. As you might expect Apple are working at the leading edge of this technology and it seems that if you add their iBeacon technology to the ubiquitous iPhone 5S you get the ability to track every nuance of movement by a shopper once they enter a store or mall and connect with them in real time. It’s easy to see how something like this could have implications not only for customer management, store design, merchandising and product selection, but pilferage too and it seems that the retailer American Apparel have already shown increases in revenue as a result of employing a version of this technology by RetailNext in their stores.

Personally, I am more interested at the moment in adapting this technology to send messages and coupons to customers as they enter a store or mall, but some of the adaptations already being talked about are so tailored as to be creepy. There are a host of companies offering different variations on the BLE theme Euclid Analytics being a prime mover.  The article in question talks of the ability to reference a customer’s on-line purchasing record and tailor messages accordingly and it seems Nordstom have already had negative feedback from an experiment that they conducted along these lines, but American Eagle have dived in and have a system using the Shopkick app already up and running in 100 stores. The other thing about this technology is that its cheap and accessible to even single stores.

I love this stuff. It takes me back to my Heath-Robinson tracking experiment with that supermarket chain and feeds my desire to provide physical stores with something more to help them compete with on-line retailers, but I have to admit there’s a narrow line to walk and a real danger, if the Nordstrom experience is anything to go by, of customer push-back. However, I have a client who is an ideal candidate for BLE. I’ve already given them a hint of what they can do with this technology and I’ll be presenting the full case to them in the next few weeks.

Phil Darby
April 2, 2014

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