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How location tracking will change the way you shop

Zach Miners | Oct. 10, 2013
Can't find an item in your grocery store? Some retailers want to help, but it could mean tracking your every move as you wander through the aisles.

There's plenty of futuristic thinking in the area. In a couple years, brands may be buying ads through Google not just to appear on websites, but to someone standing near a particular item in a store.

"As a brand, you could market to people in the store without paying the store, which changes the retail business in a significant way," said Ben Smith, CEO at Wanderful Media, which operates local shopping sites.

"The playing field between online and the in-store experience will be leveled," predicted aisle411's Pettyjohn. Right now, websites know your preferences, but so too, he said, will stores.

Another idea is to install LED lights that blink so fast the human eye can't see them, but the camera on a smartphone can. The light could be used to send messages or alerts to people's phones, said Don Dodge, a developer advocate at Google.

Dodge, who helps developers build new applications on top of Google technologies, is also looking at new sensor technologies that could detect movements down to a centimeter. He wouldn't say if it was Google developing the technology or one of numerous startups working in the space.

"There are many players in this," he said.

Of the top 50 major retailers, Dodge estimated roughly half are looking into some form of indoor location technology.

One of the biggest hurdles is being able to integrate all the different technologies to make indoor marketing work. "You can build a great app, but then the infrastructure may not be there," Dodge said during a keynote at the Place conference.

Another challenge is that current GPS technology does not provide a very precise location. Some vendors said their services provide accuracy of five to 10 meters. But less than 1 percent of stores are using the advanced technologies discussed at the Place conference, said Alexei Agratchev, co-founder at RetailNext, which does in-store analytics for retailers like Verizon and American Apparel.

Nokia said it has mapped 99 percent of the major shopping malls in the U.S. and Europe, but has not done so at the aisle level in every case.

Privacy concerns loomed large at the show and were the theme of many questions for panelists. Last year, Nordstrom began tracking customers' movements by following their phones' Wi-Fi signals. Although it posted a sign telling customers they were being tracked, it ended the program this past May, partly because of complaints from shoppers.

At the location conference this week, some said Nordstrom hadn't done a good enough job of explaining to customers the benefits of what it was doing.

Companies need to be transparent about what they're doing and why, said Jules Polonetsky, executive director and co-chairman at the Future of Privacy Forum.


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