Leveraging Wi-Fi Location Can Creep Out Your Customers; Best Tread Lightly

Mike Fratto
Mike Fratto

Summary Bullets:

  • Privacy and increased location tracking of consumers is going to come to a head as consumer facing companies try to leverage location to enhance customer experience and drive more upsells.
  • Wi-Fi based location can be a useful tool, but in an ever increasing privacy sensitive climate, too much tracking can be a bad thing.

How much privacy would you or your customers be willing to give up for enhanced customer service? That’s going to be decided in the next few years as retailers, entertainment venues, and other public places implement more services based on Wi-Fi location. Whether you install a loyalty app on your phone or not, your presence is being logged, tracked, and mined more and more.

WLAN vendors like Aerohive, Aruba, Cisco, Ekahau and others are leveraging their providing of presence and location data—and in some cases, the analysis engines—to other software systems for uses as diverse and traffic monitoring and optimization, supporting loyalty apps, and indoor mapping. From a store’s perspective, having access to the location data is great because they can use it in various ways to fine tune their merchandising strategy; but this doesn’t necessarily coincide with customers’ best interests and they’re starting to notice.

Most of us probably don’t turn off our Wi-Fi radio when we leave home, so they beacon out periodically giving away their unique identity which location applications can store, track, and report on. Without any user information, all the store knows is how often a particular phone entered the store, how long it was in the store, and if there is more than one AP, where (roughly), the phone went. Retailers are starting to use that last bit of location information to place sales and promotional items in the most highly trafficked locations.

Two things are happing in Wi-Fi location. The first is that the precision of location capabilities are getting much more accurate. Current technology can narrow down a radio to within a few feet, depending on the number of APs in the area. That’s close enough to differentiate between two aisles in a supermarket or the proximity to a ride or game at an amusement park. The second thing is that companies are starting to tie location data with user data for those customers who have installed a loyalty app or otherwise identified themselves to the location. When the stores combine what they know about how you shop and where you are in the store, they are able to provide more relevant coupons or enticements for things you are likely to buy. Or, when if you want know where jeans are in the store, the loyalty app can give you a map to the location. That’s useful.

But there’s also an ick factor. Remember the news stories in 2012 when the Target chain identified a woman was pregnant before her family knew, based on buying habits? Imagine what they can learn and use if they can relate a location as well. Moreover, what about companies that have a number of brands and can track and relate your progress through each store?

Wi-Fi based location services can be a very useful way to enhance your customers experience and to drive more sales, but be careful with the liberties you take lest you creep out the very people your company is trying to attract.

What do you think?

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