Apple acquired a company last week. It’s something to pay attention to.
There is still one slightly unchartered territory that will – without question – be the last mile in marketing. It is the ability for a brand to deliver contextual and highly targeted marketing at the local retail level. We may be inching ever-closer to this reality. On March 23rd, 2013, The Wall Street Journal reported that Apple acquired a company called WiFiSLAM for an estimated $20 million (not bad for a two year old company with just a handful of employees that includes some ex-Googlers). WiFiSLAM is billed, according to AngelList, as a technology that, "allow(s) your smartphone to pinpoint its location (and the location of your friends) in real-time to 2.5m accuracy using only ambient WiFi signals that are already present in buildings. We are building the next generation of location-based mobile apps that, for the first time, engage with users at the scale that personal interaction actually takes place. Applications range from step-by-step indoor navigation, to product-level retail customer engagement, to proximity-based social networking." If you can get beyond the marketing jargon, WiFiSLAM is, essentially, GPS for the indoors. It is able to triangulate the location of consumers, track their every move and deliver contextual marketing messages to them while capturing a tremendous amount of consumer data.
Does that creep you out?
It turns out that consumers are looking forward to more technologies at the physical retail level. In December of 2012, Internet Retailer ran the news item, Smartphone owners want more mobile information in stores, that reported: "80% of smartphone owners want more mobile-optimized product information while they’re shopping in stores, finds ‘The Shopping Experience in a Smartphone World,’ a study conducted by ad agency Moosylvania. The agency surveyed 1,874 U.S. adult Smartphone owners. 97% of respondents have access to a personal computer and 43% have access to a tablet." While it’s not a massive sample and the research was done by a digital marketing agency with a vested interest in these types of technologies creeping their way into the physical stores that ran the research, there is a high temperature to capture both the mapping of these physical retail spaces and connecting the consumers who are in them. In short, retailers want to capture this new, connected and highly untethered consumer.
This is more than a defensive move for Apple.
Pundits have a hard time grasping why Apple would make a move like this in a world where Google has made several dominating moves in the mapping space (hint: Apple stores!). Many see this as a defensive move for Apple to grab the mapping of the inside spaces while Google continues to map the oceans and the arctic. The truth is that Google is just as busy trying to capitalize on this idea of mapping the inside of spaces as well. But it’s not just a game for Apple and Google. Amazon has been hard at work capturing tons of consumer information at the retail level. Look no further than their Price Check for iPhone app that enables consumers to scan a barcode, snap a picture of a product or use text/speech search to find out how much the product is on Amazon. This business of showrooming has become a contentious talking point in the retail sector, as more and more consumers are using their smartphones and tablets to find a better price at the physical location. These consumers are using the stores as a showroom, but completing their purchases on their mobile devices and having the products shipped to their homes. What we don’t hear much about is the data and information that Amazon is capturing about consumers, how they walk through stores, what they’re price checking, the price variances from store to store, trends in merchandising and more. All of this (and more) is being captured, each and every time a consumer uses the app to find a better price. While it’s not real-time information like WiFiSLAM is offering, Amazon still has tremendous information about consumers and how they make their way through many different retail environments.
This is exciting times. This is just the beginning.
Having GPS capabilities inside businesses is still in its nascent stage. Whether it’s WiFiSLAM or another startup with similar technology (look no further than Nomi as a close contender) that is going to partner with retailers to provide contextual marketing services within a physical location, this ability to understand the consumer in a aisle to aisle manner is going to change the retail landscape as we have seen it to date. This aisle by aisle, real-time ability to flip offers, while getting a better understanding of how foot traffic flows, where consumers stop and engage is going to impact everything from pricing to shelf space to how end-cap placements are sold. It looks like stores are going to become as dynamic and intelligent as their e-commerce counterparts. So long as retailers seeks permission from their consumers and use this technology to drive more value to the consumers, these types of technologies could well be the linchpin that secures the future of retail. So long as it doesn’t get creepy.
What’s your take? Is this marketing at its finest or another privacy concern for consumers?
The above posting is my twice-monthly column for the Harvard Business Review. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original version online here: