The Potential of Geolocation for Revolutionizing Retail

Traditional brick-and-mortar retail stores have many disadvantages when competing against online counterparts. Online stores are always open and are available anywhere, have “endless aisles” and can use digital tools to personalize offers to customer preferences. Nevertheless, physical stores do offer customers a number of significant benefits, including immediacy, personal service, and the ability to offer a truly immersive experience. Recently, however, leading physical stores have discovered that they can also harness the power of powerful digital marketing tools and integrate them directly into the in-store experience. New technology promises to allow retailers to beat online players at their own game, transforming the customer experience and dramatically improving their positioning.

One of the most exciting areas of development is the marrying of mobile apps, location sensing technologies (e.g., GPS), and data analytics to improve the in-store experience for customers. Location sensing technologies in retail typically involve customers using the retailer’s app, or a third-party app, and ceding permission to track their location in return for a better experience or reward. The customer’s location can be determined through the phone’s GPS capability — or more accurately within the store via WiFi, light-based triangulation or beacons. (Beacons are hardware transmitters installed around the store that wirelessly communicate with mobile devices within a narrow area such as a specific department or aisle.)

Many retailers, from Macy’s to Walgreens, are already experimenting with location-sensing technologies, with most of the focus to date on navigation, location based promotional offers, and reviews of nearby products. However, this is just the tip of the iceberg. One particularly promising untapped opportunity is pairing a customer’s location with “in-the-moment” feedback to generate more granular performance and satisfaction information that retailers can use in a variety of ways.