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How Retailers Can Extract Value From Location Data

Today's advanced location-based technologies can enhance retail inventory, customer service, marketing and a variety of other applications.
By Steve Hudson
Jan 11, 2016

Location-based technologies are poised to change the ways in which we do business. These technologies, incorporated into a variety of smartphone apps, have already been widely adopted on a consumer level. Now, businesses are starting to realize the benefits that location-based technologies can offer, as such technologies have significantly evolved throughout the past decade or so.

Fourteen years ago, while working for mobile carrier Sprint, I was tapped to optimize the manner in which location-based data could be monetized. Sprint, like all mobile operators in the United States, faced significant capital outlay to support the Federal Communications Commission's emergency 911 mandate. With the growing number of consumers cutting the cord in favor of cellular technologies, emergency operators urgently required the ability to dispatch personnel to physical locations when 911 calls were placed from mobile devices.

The 911 mandate not only saved lives, but also opened the door to a number of commercial opportunities to advance the use of location-based services on mobile devices. We soon discovered that location data could dramatically enhance the mobile user experience, leading to many of the apps we can't live without today, including Google Maps, Waze, Uber, Life360, Gas Buddy, TripAdvisor and Yelp.

The application and the environment in which it is deployed primarily determine the optimum location technology. GPS, Cell ID, AGPS and others are commonly used for outdoor environments, whereas real-time location systems (RTLS) and beacons are the most popular for indoor use. Each of these technologies is finding its place in commercial applications, while cost, power and size serve as trade-offs in achieving the desired accuracy, mobility and total cost of ownership.

Let's consider the retail industry, in which the use of RTLS solutions within stores continues to spark interest. We know that a consumer will already employ GPS to navigate to a mall, but once he or she has entered a store, GPS technology won't work since walls and roofing block the signals transmitted by GPS satellites. This presents an opportunity for retailers to incorporate indoor location capabilities. During this year's Black Friday sales, for instance, major retailers like Target and J.C. Penney took advantage of in-store Wi-Fi-based mapping technology, allowing customers to use the maps within the retailers' apps to find the best deals within their respective stores. This is likely just the beginning of better customer engagement through the use of location technologies.

When it comes to inventory item location and counts, RAIN RFID (passive EPC Gen 2 UHF) technology is becoming increasingly effective for retailers, especially as the cost of these tags has reached a tipping point, and provides benefits throughout the supply chain. With the addition of RTLS technologies, today's most advanced RFID systems can be used not only to perform inventory counts, but also to continuously deliver precise and hands-free location of all items within a space. The key to transforming business operations lies within seeing all aspects of the operation. Advanced overhead RAIN RFID solutions can provide that insight.

These systems are already changing inventory tracking for many retailers, by allowing them to know what they have and where they have it. From an operational and loss-prevention perspective, the business benefit is easy to identify. But retailers can also use this data to improve the sales-floor and overall customer experience.

One way is through real-time messaging. For example, as shelf inventory on the sales floor is continuously updated, a message can notify a store associate that a particular size of an item is running low and needs to be replenished proactively via back-room stock. This can help retailers to optimize their sales.

Another example of the consumer utility of an RFID RTLS is with a loyalty or rewards program, by which the customer's history of purchases can be combined with real-time item-level data, for the purpose of targeted advertising. By scanning the shopper's RFID-enabled rewards card via an RFID reader, the store could send more relevant advertisements or coupons to that individual, via its mobile app or point-of-sale system.

RFID RTLS could also be used to precisely monitor customers' in-store movements and behaviors, by tracking their shopping carts or baskets, in some cases complementing or taking the place of Bluetooth beacons. Until now, beacon technology has been primarily used for in-store digital marketing efforts. However, RFID RTLS solutions can offer much more detailed location data for certain applications than proximity-based beacons. Such data can be especially beneficial in assessing the effectiveness of a store's layout, displays and end-caps on a real-time basis. This provides the ability to add incremental use cases on top of infrastructure already in place.

RFID systems have evolved to such a degree that we can now capture true real-time item-level visibility, allowing retailers to use this data for inventory, customer service and sales, in-store marketing, and more. There are myriad ways in which to extract value, and it should be interesting to see how these systems and use cases evolve during the coming year.

Steve Hudson has nearly 25 years of leadership experience and demonstrated success in startups and corporations involved in the Internet of Things (IoT), software and telecommunications. He is currently the president of View Technologies, a joint venture between Stanley Black and Decker and RF Controls offering advanced RAIN RFID technology that provides real-time location of assets in retail, manufacturing and logistics.

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