Who Will Control Indoor Location Apple, Google, or Walmart

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.