Location, location: retail revolution

Published on Tuesday December 31st, 2013

Compute Scotland

In Scotland the SME location experts Sensewhere is granted its USA patent and has started hiring staff. Establised Pole Star CEO and co founder Christian Carle CEO writes that micro-location, geo-fencing and indoor location are driving the retail revolution.

Edinburgh-based indoor geo-location start-up Sensewhere has been granted its patent by the US Patent and Trade Office for a method that “estimates the location of a plurality of electromagnetic signal sources.”

The patented technology enables consumer devices to automatically and accurately geo-reference electromagnetic signal sources deep indoor. Signal sources can be generated from Wi-Fi, Bluetooth, NFC or cell-towers and form the basis for Sensewhere’s dynamic proprietary database.

In turn the database continuously updates and improves, iteratively, ultimately offering users accurate and reliable location information worldwide.

 

“Our LESS (Locating Electromagnetic Signal Sources) patent enables a global indoor positioning database that can be updated dynamically and will adapt quickly to changing environments,“ said Sensewhere’s CEO, (above) Rob Palfreyman.

THE iBEACON HYPE
Indoor Location, writes Christian Carle,  (left) has become the holy grail of location  based-marketing, bringing consumers from their home  to the closest shopping mall or retailer, greeting them  with a message as they enter the mall or the store,  helping them navigate indoors, send product  information and special promotions as they get closer,  and finally allow them to pay for the items right from  their mobile.

 

With the hype surrounding the launch of iBeacon in  Apple retail stores, proximity sensors, or proximity detection devices or micro-location,  increasingly feels like a revolution. Apple launched iBeacon with the release of iOS 7 earlier this year.

Google  upgrading  Android to include (left) Bluetooth Low Energy (BLE), and the entire retail world is now excited by the  opportunity of deploying BLE beacons to develop new retail services and create additional revenue sources.

As a consequence, the market is now flooded with startups with BLE beacon prototypes,  compatible or not with Apple’s iBeacon specifications – nobody knows, actually –  each making  the promise that deploying beacons will solve the main brick-and-mortar problem facing shops (in their competition with e-commerce sites), by creating a direct link with the end user who will tend to spend  more money when they are in the retail store, rather than returning from the competitors web sites!

Capitalising on the huge interest generated, we now see many self-declared “domain experts” releasing reports identifying the growing number of startups, announcing  these next-generation beacons, that look much better – on paper – than those of established Indoor location experts, but are feature limited and untested in the field.

The situation makes it very hard for venue owners, retailers, shopping mall operators, and their ilk to get  an overall picture of this mega trend, and decipher what is true from what is not.

EVOLUTION  OR REVOLUTION?
Indoor location is definitively a key feature with immense value. Massive adoption is on the way and  the market finally reached maturity, which is typical of mainstream adoption: established business  models, clear competitive landscape, and consolidations, writes  Carle.

Customers are not early adopters anymore and decisions are now driven by added value  considerations. Improved end user experience (which is a critical issue for most venue owners in  particular in their battle against e-tailers) and identified tangible ROIs are key drivers for the Indoor location market.

 

The maturity of the indoor location market is already impressive, simply by looking at requests coming every day from retail stores, shopping mall owners, department store manager, large airports, train stations, convention and exhibition centews, smart buildings…In other words, the technology works.

Which is why it’s crucial for technology providers to set the  right expectations, especially with the recent rise of point solutions that are very limited, both in functionally and evolution. The key added value of an indoor location service is not in the Beacon  itself but in the software intelligence that only Indoor location experts can bring to third parties, with  easy to use deployment tools and an end-to-end platform.

For example, to make sure a user is inside an area or a shop in order to credit them with loyalty points,  simple micro-location is simply not good enough. It lacks the additional intelligence to aggregate all the location data available (GPS, 3/4G, WiFi…) and provide the right location information in real-time.The main risk with unreliable systems is to alert users in a wrong area, flood them with irrelevant  offers or discounts and at the end drive the interaction with the user completely inefficient.

Aside from the magic, the success of Indoor location can be attributed to 3 key levels of service:

  • Indoor Location, like an indoor GPS, helps users find their way, with step by step navigation,  offers the ability to discover the surroundings, can optimize their visit, locate their friends  and colleagues, insure their security, and provide behavioral analytics to merchants on  visitors’ paths.
  • Micro-location allows travellers, visitors and shoppers to interact with a specific item, a  product on a shelf, an art piece…The presence of the consumer is only identified when they  are close to a BLE 4.0 beacon and lost when she’s far from it.
  • Geofencing adds to the 2 previous approaches by bringing smart and reliable interaction. It acts as a virtual and invisible fence to send specific information when users enter or leave a specific area or venue. Geomarketing or loyalty-oriented interactions with context awareness are among the most common use cases.

Many new use cases are being developed for more personal use and these applications include in- storewalk-in detection, a partner or customer location during a show, guidance until the right gate  with path time in an airport, or locating a patient  in a large hospital.

Another huge value these technologies bring to retail is to allow venue owners like retailers or  shopping mall operators to track, in real-time, consumer behaviours to improve customer service and  boost sales.

While knowing that someone is entering into a shop is interesting in itself, it still remains a very poor  data compared to what a supplier of a holistic Indoor Location application, like Pole Star, can offer today with a unique set of technologies and services, covering a large spectrum of use cases to lead the  visitor in a personalised way.

For example, in large buildings, the pathways consumers use provide valuable insight into their  behavior and interplay at different point of presences, and help the venue owner to optimise on its  venue and its overall sales and marketing strategy. Within a department store or a supermarket  knowing the routes of shoppers throughout the venue will definitely help drive a more personalised user experience and improved customer relationships, as well as mobile context-aware advertising.

Which is why it does not make sense to consider micro-location as a standalone approach solving the  complex requirements and use cases of Indoor location. Although micro-location is an important  piece of the entire Indoor location value chain, the only way to maximise the value for a venue  owner is to be able to follow the consumers’  behavior from their initial shopping intent, far before the  final interaction at the point of presence.

The success in realising the full value of Indoor Location, comes first by attracting people into the  building, or the shop, then to assist and guide them according to what they intend to do. Similar to what Google as a search engine does online, but in the physical world,  Indoor Location is the only
technology able to suggest user interactions, based on their geo-location in a particular area or close  to a specific object or shelves.

This is no revolution. The technology exists and has been already deployed and used in many indoor  locations (shopping malls, airports, museums…). The new ability brought by Apple with iBeacon is to  wake-up the application when a BLE beacon is close from the user iPhone in order to engage with  customers even if the app was not initially opened.

However the big topic now is how to motivate end-user to download the venue or brand generic application? Innovation has to happen now in the  service to consumers, with ‘killer’ apps that satisfy both consumers and venue owners, and in  how location data can be used to analyse users’ indoor behaviours i.e. Big Data.

A global and holistic view of Indoor Location – not just the micro-location – is essential to maximise the  value of what it can bring to consumers, retailers and the society as a whole, as well as guarantee the
satisfaction of venue owners.

About Pole Star
Pole Star, created in 2002 is based in Europe (France -Toulouse & Paris) and the United States (Palo Alto, California ), and  is the pioneer and world leader in indoor location.

About Sensewhere
Sensewhere  based in Edinburgh has been busy since Barcelona  getting funding and its US patent, as well as winning a contract to provide a geo-fencing service to a network operator in South America. The company is now hiring a wide range of people from director of product management and operations − US (added position) Edinburgh sales and office manager,  Wireless System designer, Microsoft Windows application developer,  C and C++ Mobile application developer, iOS (iPhone/ iPad/ iPod) application developer,  Android/Java mobile application developer and a Linux Server administrator and programmer.

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