The adoption of technology is a bit mysterious. Few predicted the meteoric rise of the latest craze Pinterest and yet more than 10 years ago, we lumbered over to the internet and warily began shopping online. Then we dove into our mobiles and our heads haven’t come up since. We all left the real world, the physical world and went digital.
The issue is that we humans, still live in the physical world. Retailers got left behind in the gold rush of location because they weren’t online and didn’t think a mobile device mattered to their bottom line.
Online retailers flocked to online and now today, J.P. Morgan predicts that global e-commerce revenue will reach $963 billion by 2013. And in 2011, online retail commerce in the U.S. alone grew 13.2 percent to $187 billion. The report also noted that even though e-commerce spending is growing, the pace at which retail is moving online is less rapid than the online advertising space. And here is the kicker, growth in mobile commerce will negatively effect brick and mortar stores. (the one saving grace could be the possibility of an internet sales tax)
The battle for online is conversion - turning that lookie loo into a shopper that buys something. eCommerce is lousy with technology tools and web analytics that e-tailers can use to track, monitor and get you to click that purchase button.
On the flip side of that, in the physical space of bricks and mortar retail, people are still walking around malls and retail spaces with their mobile phones glued to their hands, leaving “fingerprints” of where they are going, creating patterns of behavior – a virtual data boom and no one is tracking it. In other words, there are no tools, no web analytics, no turn key solutions that are applied to the physical space in order to get that person from dwell time into that store to make a purchase.
Sure, malls and retail spaces have been counting visitors for the past two decades or more but that counting is basic and no one is keeping up with repeat visitors, where they go and what they do when they get there.
Let’s look at it another way: The Dubai Mall in United Arab Emirates, has 350k m2, 1200 stores with 54 million visitors in 2011. To put that in perspective, New York City had 50.2 million visitors in 2010. In Las Vegas,The Grand Canal Shoppes have 46,000 m2 with 20 million visitors annually. Captive audiences, limited tracking based on real time movement of its shoppers.
is still a location gold rush in getting down to store and aisle level that can power the future of advertising,” said Frank Schuil, Founder and CEO of Qubulus, a new indoor positioning company emphasizing web analytics. “Malls and retailers have had basic counters for years but they were not collecting any mobility patterns from those counters. If you can collect that movement inside the physical space, which is in fact data, you can make better decisions on how to reach your customers and convert their dwell time to purchase time. Retailers need a turn key solution to capture the movements of shoppers and that’s indoor positioning.”
Qubulus focuses on creating web analytics for the retail space from the fingerprints of mobile devices inside a physical space. Here is a video that shows the movement of shoppers in a mall. With Qubulus, this movement and positioning of shoppers can be captured and analyzed so the retailer can have better insight into where shoppers are and how to pull them into the stores they pass or will pass.
Many tend to look at indoor positioning as a novelty akin to some Orwellian plot to know our every move. But that isn’t the case, in fact, in the past several decades, our movements have increasingly monitored. And, with passive tracking inside of your beloved iPhone or Android phone, you leave a fairly accurate fingerprint of your movements – all those photos of food, checking in and out of places, becoming the mayor leaves a mark. Patterns of behavior. They use that online, but not in the physical world of retail.
Indoor positioning brings two core values to retailers in the physical space: it can drive traffic to the store through an application and also collect location data from that application to analyze and optimize the retail space.
Retailers now have access to completely new, richer data they ever had before — Frank Schuil, Qubulus
In time, indoor positioning will be a commodity like GPS: adoption of new chips, like what Broadcom is doing with location aware chips inside of iPhones, will take time, but indoor positioning companies like Qubulus work with radio signals already present today.
Katherine Heiberg, a member of the European Research Group and International Council of Shopping Centers (ICSC) says that retailers have been struggling for decades once we took a bite out of online.
“You can talk about the struggle between “bricks & mortar” and “clicks”. Both distribution forms have advantages and disadvantages. The optimal is to have them working together and consumers have already figured that out,” said Heiberg. “When the TV was born a lot of people were sure the radio would die. To me the situation is the same with retail on the internet and in the physical stores. The internet put pressure on the market places and physical retailers need to develop just like online did. In the end they need to exist together.”
Heiberg says indoor positioning is the next frontier for retail because timing and relevance is every thing if you want the consumers attention.
Qubulus’s web analytics approach to indoor positioning for retailers is in opposition to Google‘s recent announcement of a new app called Google Maps Floor Plan Marker which wants retailers to fork over their floor plans so anyone can see them on Google maps.
“With the mobile phone and indoor positioning focusing on web analytics, a retailer or marketer has what they need to make it work,” adds Heiberg.
This dovetails nicely with a recent Gartner study covered in Forbes that predicted that by 2017, Chief Marketing Officers will spend more on IT than their CIO counterparts. According to Gartner, in 2011 B2B and B2C marketing budgets as a percentage of revenue were almost three times as high (10 percent) as IT budgets (3.6 percent).
Qubulus has several pilots in the US, Scandanavia and Dubai.