How to Decide If Your Business Should Use Indoor Location Technology

The rapid adoption of in-store location technology is ramping up as vendors improve their targeting capabilities and consumers grow more comfortable with sharing their smartphone locations. According to a survey by Swirl, a mobile marketing platform that utilizes iBeacon technology, 77% of consumers now say they’re willing to share their location with retailers, as long as they receive enough value in return.

Despite the recent buzz, the truth is that indoor location technology may not be the right solution for every merchant on the street. The costs and complexities of these systems can sometimes be too much for businesses in certain industries to handle, including smaller merchants who may not see enough foot traffic on a daily basis to benefit from using in-store location tools. Here are five questions that business owners should ask when weighing the decision of whether to start using indoor location technology.

1. How large is my store? “In the short term, [this technology will primarily benefit] major retailers, who collectively enjoy close to 20 billion visits to their stores each year. You will see some very innovative indoor technology solutions … continue to get deployed at national retail chains in 2014 and 2015. Smart retailers will leverage this technology to improve the offline shopping experience for their guests. Retail is a game of inches, so the first retailers to effectively engage with their shoppers on the mobile channel stand a lot to gain competitively over the next decade.” (Pete Coleman, Point Inside)

2. What’s my foot traffic like? “Indoor location technology is applicable to virtually any business that has a significant amount of foot traffic. [However], businesses need to make sure that they have a large enough audience of consumers that can benefit from the technology. For iBeacon technology, consumers need to have an app on their smartphone that can recognize the signals. Most large retailers already have a sizable mobile app audience, but this may not be the case for smaller businesses.” (Rob Murphy, Swirl)

3. Can I make sense of the analytics? “There are really two reasons to make the investment. One is in-store analytics — to help retailers understand how people move around their stores and interact with displays. They can understand the offline equivalent of the e-commerce concept of cart abandonment, and other such things. The other reason is to tie their marketing budget to in-store behavior. Retailers can see how a consumer engages with their ad or a specific offer and measure the downstream effect — a big step forward to ‘closing the loop.’” (Tom MacIsaac, Verve Mobile)

4. How much value do I place in logistics? “Beyond the retail industry, it’s clear that any business that stands to gain from better operational execution indoors should evaluate the implication of indoor location technologies. Hospitals, schools, museums, and distribution companies might not have the obvious consumer engagement opportunities that big retail has, but indoor location technology can add value in logistics, workforce optimization, customer service, and indoor navigation — to name a few examples.” (Pete Coleman, Point Inside)

5. Will the technology add value for my customers? “Businesses need to consider the value that this technology can deliver for their shoppers. For large-format stores, brands with established loyalty programs, and businesses where consumers make considered purchase decisions, this technology can be used to enrich the overall in-store shopping experience in a meaningful way. Consumers are willing to engage with retailers and brands using this technology, but only if the interactions are relevant and value-creating. Retailers need to evaluate the overall consumer shopping experience to determine how they will add value with this technology.” (Rob Murphy, Swirl)

Interviews have been edited for length and clarity.

Stephanie Miles is a senior editor at Street Fight.