While WIFISlam is not the first company to uses Wi-Fi for indoor
location, the acquisition
of the company by Apple does signal a major player validating the
importance of the technology. With more precise indoor location gaining
traction, the infrastructure to support the blending of online and real world is taking shape. A battle is brewing on who will control this infrastructure
and the indoor experience.
One of the most lucrative benefits of precise indoor location
is targeted advertising tied to a specific location. Presenting offers and
promotions on products when users are within reach or steps of the physical
product can be an extremely powerful way to drive new sales. This type of
proximity marketing has been tried in the past where advertisers have broadcast
messages via Bluetooth or SMS with limited success. By integrating
precise indoor location with applications and consumer data, ads can be much
more interactive and targeted.
Indoor location has significant value to brands
trying to promote their products as well stores looking to trigger impulse
purchase. Industry estimates show that 40% of all sales are impulse purchases
and surveys from Integer
Group show that 90% of shoppers buy items that are not on their list.
Brands invest significant money to position their products to be seen by
shoppers who are increasingly looking at the screens of their smartphones. With
mobile devices able to distract an otherwise semi-captive retail customer,
store and mall proprietors need to leverage in store location and mobile apps
to recapture consumers’ attention and generate value from their physical presence. Location aware apps have the ability to do this.
Wi-Fi location systems such as WIFISlam use the signal
strength of a Wi-Fi router and the mapped location of that router to determine the
location of a user. In order to calculate location, apps like WIFISlam need
information about the router broadcasting the signal. The owner of the router
controls this information who, in a retail environment, is often a store or mall
owner. While Apple is snapping up WIFISlam, competitors in the indoor
positioning market are taking a different approach and working with retailers and
building owners to help them take control of their physical environment and its connection to the
digital world. This allows retailers to better control the content, offers and
promotions that are delivered to users in their store.
Companies such as Wifarer
are building indoor maps and then selling advertising to merchants within the
map. They are also providing technology that will disrupt Wi-Fi signals so competitors
such as Google, and now Apple, cant accurately map a location using Wi-Fi. This
ability to control the online experience in their building through controlling
location data provides brick and mortar retailers ammunition as they battle online
retailers.
Through control of precise location, retailers can regain
the attention of mobile phone users in the store by presenting an interactive digital
layer that is powered by precise location of the user. For example augmented
reality experiences can be created that are anchored to the physical world by
precise location and visual cues in the store. Retailers could not only create
new experience to incentivize users to visit a location but sell brands
better exposure within these experiences.
The effectiveness of banner advertising is worse on mobile
than it is on the desktop but presetting the right message at the right time in
the right context will be the key to the growth of mobile advertising and
Google will work hard to control this ecosystem. Better targeting will be
achieved thought algorithms factoring location, which is controlled by the
retailer, and past behavior and preferences that will be predominantly
controlled by Internet players like Google. In order to most efficiently present
offers, these players will have to realize the value each brings to the table
and cooperate. Unfortunately for Apple they do not collect data on consumers so
they have limited leverage on shopkeepers. Without a revenue stream to support indoor
location, Apple will not lead in this space but will follow innovation from
Google.
