iInside CEO: Those Who Don’t Adapt to In-Store Tech Will Be Left Behind
Brick-and-mortar retailers continue to new find ways to understand consumer behavior. They’re personalizing the shopping experience by using tools like indoor location analytics to track consumers mobile devices. And that’s coming just in time: the fear of showrooming has increased amongst retailers.
Enter iInside, a startup that has created a set of hardware solutions to help businesses track and analyze consumers as they move within a store or a high traffic environment. By providing insights to retailers about what shoppers are doing and where they are spending time in a store, the company believes it’s helping brick-and-mortar businesses address issues such as showrooming, as well as the ability to test different approaches to marketing.
Street Fight recently caught up with Jim Riesenbach, iInside’s CEO, to find out what insights retailers are drawing from the information collected, how issues such as privacy are impacting the use of the technology, and where there’s room for the company to grow beyond retail.
How do retailers quantify a user’s store visits?
Our hardware looks at mobile devices that are in a store. So if you walk into a store and you have a mobile device with WiFi or Bluetooth turned on, we are able to see that device is in the store, but we cannot see anything that is personally identifiable about the consumer. Our hardware follows that device to understand how it moves in the store, in a completely anonymous way. We collect that data, it comes back to our servers, we turn that into reports and we present it to the retailer.
What insights are retailers able to draw from the information you collect?
There’s a big focus on combating showrooming. We have been able to use our tools to look at the percentage of consumers inside the store that go into a particular department. We can look at consumers in a camera department versus the TV department, and see that, for instance, 40% of the consumers go into that department spend time there and go past the cash register, meaning they didn’t buy anything. That is what we consider a proxy for showrooming.
We also look at patterns across a store and department, allowing retailers to find solutions to address these insights. One of the solutions is when a retailer understands what category they find the greatest showrooming activity, they can then put more signage up, match internet pricing, increase employee coverage, and help consumers have a better experience by being able to make the best informed choice about what products to buy, which helps create more loyalty.
There are a bunch of technologies out there that effectively complete the same task: quantifying in-store behavior. Three years from now, which one has won, and why?
In some indoor location companies there has been some effort to do this, some with camera-based systems detecting consumer movement using cameras, but they are very expensive to install and operate, and they also don’t have that degree of accuracy and precision. So there are some times when new technology overtakes older technology, and I believe that this is something that is going to happen.
From my perspective, we view ourselves as a solutions company not a technology company because we don’t want to be tied to any one technology. We want to understand the problems our clients have in their business and help them use data and analytics to solve those problems and that can be whatever is the most current and relevant technology at any given time. Those who don’t adjust and adapt from a technology standpoint are the ones that tend to get behind and disintermediated in some cases.
What kind of pushback have you seen from customers about being tracked?
When companies like ourselves are asking consumers to opt-in, it really is whether they can see the specific value. So let me be clear that when we just look at the consumer anonymously, the consumer is not opting into that, we see the device anonymously. But when we look at the consumer specifically, that is only when the consumer has opted in and whey they have opted in, it’s because they are going to get some kind of value like a promotion, a coupon, a emails on items on sale, etc. It’s a growing area, but it’s still relatively early in the game for the opt-in promotion aspect of consumer marketing, and we will see evolution in that area over in the next few years.
Most retailers have used the technology for optimizing their business. How can in-store analytics help improve the customer experience?
In a direct way, we are able to help assess the wait times at the cash register in a supermarket or big box store like Walmart or Costco, where cash registers are at the end of the store because consumers don’t want to wait for the check out line. So we’re able to help the retailer know when they are staffed appropriately and if they have enough cash registers available so the consumer experience is faster and better.
There’s also operating tools that help retailers operate their store environment to help understand traffic patterns and finding effective ways to move consumers throughout the entire store to make sure consumers are spending more of their dollars in the retailer’s store versus their competitors.
What opportunities are available for SMBs concerning indoor location technology?
I think with SMBs there a number of things they want to understand both within the real environment and the shopping environment. When I say SMBs, its really going to be those that have a physical and retail presence.There are a lot of SMBs that don’t have that kind of physical presence and that’s not where our business is focused, we’re all about the physical location.
We have to think about how we’re going to create products that are inexpensive enough and easy enough to install that tens of thousands of SMBs might have an interest in using them. We are fortunate in that our technology is relatively inexpensive and that allows for easy distribution. We’re still working on ways for us to put our hardware in a box with a very simple installation instruction that allows someone to install it themselves, that’s where we would like to be over time, but we’re not quite there yet. That’s the way we’ll be able to get to SMBs and build that end of the business over time, and there will be demand for that.
In-store analytics solutions have been able to demonstrate a fairly compelling use case for retailers. Are there applications in other markets as well?
I think it’s going to be important in some categories than others. It’s typically most relevant in areas where there is a lot of traffic and consumer activity. For example, if there is a high end retailer with products in the thousands of dollars, it might do really well in business, but only see one hundred customers a day, so this technology may be less relevant for categories like that. However, categories that see a lot of consumer traffic such as grocery stores, big box retailers, and even outside of retail in airports, hotels, casinos, sports venues, all of those having indoor location information is going to be an important part of how they optimize the experience for the consumer.
Myriah Towner is an intern at Street Fight.