Innovative Retail Technologies

APR 2012

Innovative Retail Technologies (formerly Integrated Solutions For Retailers) is the premier source for innovative yet pragmatic technology solutions in the retail industry.

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Vendor Insight Get Smart About Smartphones Location-based services help retailers understand the relationship between customers, their phones, and their purchases. by Simon Thompson Google+, and other social media apps. Consumers can also check in on Foursquare or tweet their status on Twitter, providing a vehicle to be social and enabling a person to share, engage, and stay connected from anywhere at any time. Yet, the very thing that makes smartphones so powerful and good for the consumer is increasingly becoming a challenge for retailers. T Know Where Your Customers Are Retailers are struggling to link a customer's online activity to the brick- and-mortar stores and ensure that when they drive a customer to a store, through search or other marketing touch points, the customer buys rather than shops elsewhere or online. But, struggle no more. The answer is the very same device causing the retailer so many problems — the customer's smartphone, or more correctly, the location of the smartphone, is the answer. Location is the key to aggregating and understanding consumer activity, behavior, needs, and habits. While there's been a lot of negative press regarding unauthorized tracking of cellphones, most consumers are willing to share their location via an app, and nearly 80% of all apps are location aware. Location is the missing piece that connects sentiment to physical activity. It links where someone is, while they are searching, to what they are actually searching for. Knowing this searching customer's location is perhaps the most powerful bridge to better business insight but is woefully underused by many retailers. How do retailers overcome this? Most social media services provide a location app that can be picked up by various aggregators. These media aggregators offer a single point of access to multiple feeds, which means it's easy to identify trending search terms by geography. Retailers can find out where people are searching and for what and then create a minute- by-minute picture of sentiment and demand across the market. Location can uniquely link activity across applications to see what's important to consumers on Facebook, Twitter, and every geo-enabled app. Geographic analysis tools also understand place names, brands, and points of interest 42 ● April 2012 oday's smartphones are making retail marketing and store opera- tions divisions look dumb, and that's a serious problem. As a consumer device, the average smartphone is a boon that offers easy access to the Internet and constant contact with Facebook, Marketing/Operations so retailers can easily and quickly find out what's trending around that coffee shop in Times Square, discover what's hot for shop- pers in a mall, and better understand what consumers might be intending to do next. Where Are The Consumer Hot Spots? Smartphone location-extended information enables retailers to compare and contrast their consumer sentiment by demograph- ics or segments, analyze campaign strate- gies by geography, and identify hot spots of activity. Retailers are just beginning to understand how social media, texting, and word of mouth drive consumers to stores to buy the hottest thing — from handbags to children's toys and electronics to apparel. Location analysis helps provide the "why" behind the "what" in consumer sentiment. Currently too much attention is being paid to pushing information to consumers via smartphones and social media apps, but the tide is turning. Market leaders are now pulling information from these services and using location to tie trends and transactions together. It's providing new insights and understanding, it's driv- ing awareness at new scales of detail that map out the social geography — how and where people are connecting as well as to whom they are connected. Smartphones and their myriad of consum- er apps aren't going away. Retailers have to decide how they choose to benefit from them. Location analysis is inevitably going to improve the connectedness of the brand and store to consumers, and with it comes profitability. Location analysis closes that last mile between online and offline activity. Every retailer needs to understand the who, what, why, and where behind its consumers, because that smartphone isn't just a killer device, it can also kill your sales. ■ Simon Thompson is the global director of commercial solutions at Esri, covering a wide-ranging business sec- tor that includes retail, real estate, banking, insurance, facilities management, man- ufacturing, and media.

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