The rise of location aware technology

In the first part of a two-part feature, Jason Finch talks about the rise of location aware technology – and predicts the death of cash & carries

One of my first internet-based projects was building an online social network for people who wanted to organise events with others who shared their interests. Its success taught me that the most crucial element of connecting people using online technology is an understanding of their locations.

The digital and physical worlds can blend in truly powerful ways. Smart e-commerce websites collect or infer a lot of data about us while we use them. Marketers have long dreamed of combining knowledge of your likes and dislikes, your shopping habits, where you go and whom you go with, so they can target you with personalised offers at a time and place when you’re likely to act and spend money. The concept is one reason Facebook is now valued at around US$200bn.

Most people know that smartphones can track their position using GPS technology. They can also sniff out Wi-Fi signals and match them to knowledge of hotspot locations. There’s also the option of triangulating the position from network masts. Location-based digital services have become an integral part of our lives because our smartphones now pinpoint our location and, so long as we trust an app or mobile website, we tend to allow it to locate us.

Technology even exists that can detect you simply by recording the unique signature your smartphone throws out when it’s looking for Wi-Fi networks to join, even if it doesn’t join them.

This is already used to track individual shoppers around malls and retail stores in the United States. It cannot interact with them and doesn’t know who each person is – it merely recognises and tracks the precise location of their devices every time they return. However, this didn’t stop a major retailer having to abort a tracking experiment after a few months when shoppers decided being tracked around the shop floor was ‘too creepy’.

Attitudes are changing though, and people seem willing to ignore their unease about sharing so much information about themselves if they get something useful back. In the world of retail, where much of the experimentation is happening, this tends to be special deals and vouchers for money off a specific item.

Enter the beacon, the latest technology enabling your smartphone to interact with the world around it, giving you personalised information and offers without needing to scan anything, tap anything or even think about starting any apps.

Retailers in the United States have been trialling beacon technology for a while, for everything from simply welcoming people to the store to offering promotions tailored to individuals based on their previous purchases and current location in the store.

Beacons are seen as a way to rescue physical stores and a way to bring the advantages enjoyed by online retailers, such as intense customer tracking, into the physical world. Retailers are worried about “showrooming” – customers coming to look at products with the ultimate intention of buying them on online. Beacons are meant to change all that. Whether they will or not remains to be seen: consumers are a tough bunch.

The technology firms pushing beacons have been quick to realise that there are business-to-business applications, too. Cash & carry depots with retailers as customers are just as great as targets as shopping malls or retail stores full of everyday consumers.

In next month’s issue of Better Wholesaling, the second part of this feature will look at other technology that knows where we are in the physical world and how beacons can be used in cash & carry depots. I’ll also explain why investing in them may simply be fiddling while Rome burns: cash & carries face a fundamental problem created by our increased adoption of connected technology – the end of people wanting to walk the aisles of physical stores.

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Jason Finch is the co-founder of Port80. The UK's first business combining internet software development and direct-selling retail consultancy, Port80 now focuses on wholesale and is working closely with Palmer and Harvey and other wholesalers that want to benefit from real-time data and online technology.


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