Customer Tracking Using WiFi and Beacons Should Be Dead in Retail

M. Fratto

M. Fratto

Summary Bullets:

  • WiFi and Bluetooth beacons are inconsistent trackers that can tell retailers little more than ‘some device was somewhere in this vicinity for a period of time.’
  • Beacons and RFID on products open up more opportunities for many benefits, including increasing customer touch and understanding their shopping habits.

The National Retail Federation’s 2017 Big Show in New York was a cornucopia of everything retail, from smart displays to supply chain management to social media analytics. One overall theme I kept hearing was how retailers want to enhance the shopping experience with customers and ultimately sell more products. Online retailer sites like Amazon and Best Buy can gather a wealth of information about user behavior and feed that data back into their analytics to track product performance and make recommendations to customers based on past behavior and the behaviors of similar customers. Brick-and-mortar stores don’t have that advantage and are desperately trying to learn more about the buyer and increase sales.

In the last few years, the wireless segment has been abuzz with using WiFi tracking and Bluetooth beacons to identify users – more accurately, devices – over time and assess traffic patterns from that data, such as differentiating new from recurring visitors, tracing paths through a location, viewing dwell time, and so on. In addition, retailers – and the vendors that provide technology to them – want to encourage users to install store apps which will tie the user to a device and allow the store to offer enhanced engagements (read: more tracking and push notifications) to customers that opt-in to a mobile app.

The problem with these approaches is they are inconsistent: Not all users have phones. Those that do may have WiFi and Bluetooth disabled, or the WiFi MAC address may randomize, thwarting tracking. Indoor location may not be accurate enough to really know where customers are in the store, and a host of other conditions can lead to scenarios that are less effective than having an employee stand on a ladder every five minutes and look around to see what’s going on.

There are customer-tracking alternatives to WiFi and Bluetooth from companies like RetailNext and NEC using new cameras that perform some processing on-board or existing in-store cameras that stream the data to software, which performs image analysis to count customers, track individual movements, and even guess demographic data like gender and age. The cameras operate independent of customers, and since they don’t rely on customers doing anything other than walking into the store, they are far more accurate at counting and tracking movement.

Technologies from companies like Perch Interactive instrument RFID tags on products and readers on displays which collect and analyze data, displaying information such as which products customers are picking up and for how long. Multimedia displays can be added to present product detail to customers based on what they are holding. Match that data with PoS sales and you can learn which displays or products lead to actual sales.

Knowing your customer is important, but relying on their phones betraying their every move may not be very effective. Meanwhile, using similar technology on products provides a variety of benefits, including learning more about your customers.

About Mike Fratto
Mike is a senior analyst on the Business Technology and Software team covering the Enterprise Networking and Data Center Technology markets. He has extensive experience reviewing and writing about enterprise remote access, security, and network infrastructure products.

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