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Thursday, August 8, 2013

Location, Location, Location: GPS Business-Oriented Apps Growing

Creative location-aware business applications are on the rise.
Continued from our prior article: In the retail sector consumer tracking is being used to identify the best store sites and offer promotions to customers. One of the most widely touted ideas is to send coupons to the mobile phones of potential customers already in the store’s immediate area. Those customers might be identified by the fact that they just used a review site to search for a restaurant or have an app on their phone that identifies them as being a frequent buyer.

One business in Guatemala has taken targeted discounts to a new level. Called Meat Pack, the store sells cutting-edge athletic shoes – the kind of limited edition footwear that collectors, or sneakerheads, scramble to buy. The store’s fans follow it via social networking and many have downloaded Meat Pack’s app. The store developed Hijack, an app enhancement that is triggered when one of the store’s customers enters a competing shop.

When a Meat Pack customer steps into the official store of one the brands sold by Meat Pack, Nike for example, the Hijack application offers them a 99 percent discount. That discount diminishes one percentage point per second until the customer enters Meat Pack, which is located in the same mall. One buyer got there so fast he got 89 percent off. Some 600 customers have used the Meat Pack discount — sales that were made public on Facebook, generating even more buzz.
Hijack - a creative geo-fencing ad application that detects
when a customer is in a competitors store - and offers
a reducing discount that starts at 99% off, with a
reduction by 1% for every minute it takes them to get
to the Meat-Pack store.

Not all retailers have been as successful. Nordstrom began experimenting with location tracking last year but, once it began notifying shoppers, they complained and the retailer had to drop the project. The program used sensors installed by a firm called Euclid that captured the Wi-Fi signals coming off customer cell phones.

Euclid was able to monitor when someone bypassed the store, when they came in, where they went, and how long they stayed. Such data can help stores assess why they are winning/losing customers, evaluate promotions or determine whether a particular display can hold buyers’ attention.

According to Euclid’s website they also offer information on consumer loyalty, which can be inferred from tracking the unique identifier number broadcast by every cell phone. Over time it can indicate who is a regular shopper — although the firm says the data is anonymized before it is delivered.

But data-hungry firms can do more than just follow customers around. Nomi, of New York, can link a customer’s visit and behavior with their Web browsing and purchase history. The person must have provided some personal information to create the link, according to a story in the New York Times. They might have downloaded the retailer’s app or used the in-store Wi-Fi and given an e-mail address. Once the link is made the store will have access to their profile.

Some brick and mortar businesses see tracking apps as a way to level the playing field. It gives them some of the intimate insight into their customers that online-only stores like Amazon have been getting for years get by analyzing purchases.

But location information has uses far beyond getting to know who one’s best customers are.

“(Companies) have done studies which demonstrate that they can predict the behavior of people based on their mobile patterns,” said Natasha Léger, chief executive officer of the Location Forum, which just recently released voluntary guidelines for the protection of location data.

The guidelines point out that location data can be derived from more than cell phones or IP addresses. Geo-references can be found on Facebook and in the metadata of digital photos, email, and documents. Companies are already gathering data from 100 or more sources and integrating it to gain new insights, Leger said. “Data is being correlated at a scale that most people don’t understand.”