Local Search

New Entrants in Indoor Location: Sensorberg and Datzing

The buzz around iBeacons continues this week with a couple new hardware and software technology vendors entering the market for indoor location.

Hardware startup Sensorberg, based in Berlin, Germany, has secured $1 million in funding from Technologie Holding GmbH and undisclosed angel investors. Sensorberg offers various packages to retailers that combine setting up Beacon sensors in stores to deliver mobile marketing campaigns and location features via software developer kits and management dashboards. The prices range from as low as $120 (€89) that includes 3 mini-beacons and an SDK to connect apps to an unlimited package that offers developer resources and enterprise support.

Founded in 2013, Sensorberg began as a startup in the Microsft Ventures Accelerator in Berlin and plans to use the new funding to further develop its platform and build an extensive iBeacon network.

Meanwhile, in Los Angeles, CA, Datzing is positioning itself as a new competitor to Apple's iBeacon with an Android platform for indoor location technology. Profiled this week at The Verge, Datzing is a software-based startup with patent-pending technology to turn a Bluetooth or Wi-Fi device into a beacon. Datzing doesn’t require purchasing any special hardware to set up an access point. The company plans to launch an Android beta app in March and doesn't rule out the possibility of an iOS option down the line.

While iBeacon is getting more than its fair share of press -- notably, a partnership between ShopKick and American Eagle (AE) Outfitters to outfit 100 U.S. stores with iBeacons and Apple's chain-wide deployment of iBeacons last year -- the push for in-store marketing and indoor location is still in its infancy. This year should present a good opportunity to see how the market plays out.

iBeacon Surging but a Hybrid Approach to Indoor Location Will Prevail

In partnership with ShopKick, American Eagle (AE) Outfitters is outfitting 100 US stores with iBeacons to power deal notifications when shoppers enter stores. ShopKick also has a similar but much more limited partnership with Macys.

Right at-the-door notifications are the full extent of the ShopKick-AE indoor marketing functionality. But later it will become more precise by area or zone within the store. 

Outside of Apple's own chain-wide deployment of iBeacons this is the largerst and most visible iBeacon launch to date. Clearly Apple's credibility and support of BLE and iBeacons is propelling the technology. However it's important to point out that iBeacons don't work with older iPhones and it only work with a few Android phones currently.

Over time that will change. But iBeacon is not a stand-alone or complete solution. 

The rise of iBeacon argues that it will potentially be one of several "winning" indoor location technologies. But there won't be a single technology standard that emerges. Retailers and others will need to employ a layared or hybrid approach to provide store coverage and accuracy. 

WiFi and closed circuit TV are the foundational in-store analytics and location technologies -- but WiFi in particular. Acousitc, LED lighting and magnetic may also make gains as retailers and venue owners come to see they need multiple approaches for success. For example, Rouse Properties has adopted acoustic technology from Sonic Notify to power indoor location awareness and marketing within its network of 34 malls in the US. 

While indoor analytics are driving the market, companies are quickly stepping up with consumer-facing solutions -- such as ShopKick-AE. And while consumers widely use their smartphones in stores and are generally interested in things such as deals and personalization, retailers will need to be careful about annoying or spamming consumers with too many messages. 

For example, research from ISACA suggests that an education process and gradual roll out of indoor marketing are in order. Too much, too soon may have the opposite of the desired effect:

targeted marketing 1

Pizza Hut: Half of 'Online' Orders Now Come from Mobile

It's amazing to think that Pizza Hut has been doing online ordering for 20 years. That would mean Pizza Hut took its first online order in 1994 -- way ahead of the curve. And when it comes to mobile Pizza Hut again appears to be ahead of the market.

Today, according to Pizza-industry publication Pizza Marketplace, roughly 30% of all Pizza Hut orders come from the internet. But half of those are now coming from mobile devices, with momentum favoring mobile (smartphones + tablets) over the PC. 

The Pizza Marketplace interview is with Pizza Hut's Kevin Fish, senior e-commerce manager. He sums up the company's attitude toward mobile as follows: 

It's important that we're where our customers are and that our experience meets and exceeds their needs. The app offers us the opportunity for a highly engaging and personalized experience. Meeting our consumers at their point of need is become more and more important as technology continues to advance. Our opportunity now was to provide the best experience in the industry with enhancements that meet those consumer demands.

Pizza Hut is using its app to not only deliver services but to engage and cement the loyalty of its users. The company also uses location to deliver specific local promotions and offers that aren't necessarily available in all markets nationally.

I'm not a fan of Pizza Hut pizza but the company really has the right attitude toward multi-channel marketing and engagement -- with its mobile app (and all the personalization it allows) now at the center of its "online ordering" strategy. 

Expect Labs' MindMeld App Showcases Dynamic 'Assistant' Technology

Startup Expect Labs has launched its MindMeld app after months of being in private beta. A crude but quick way to describe it is: Google Now meets Skype. Expect Labs, founded by Tim Tuttle, describes it as a "voice assistant." But that doesn't really do it justice. 

Many bloggers and tech sites are reviewing MindMeld. In a way that misses the bigger picture. The app is really a "technology showcase" or demo for something larger and more forward looking. Expect Labs, which charges $4 for the app, doesn't see MindMeld as a money maker and isn't staking its future on the success (or failure) of the app. 

First, here's what MindMeld does: it listens to your conversation, with one or several people, and in real time shows you pages and websites that are relevant to the discussion. The sites and data are coming from various APIs and the internet broadly. If you and your friends are talking about going to New York on vacation, for example, it will start showing hotels, restaurants and things to do based on the specifics of your conversation.

The key challenge here is filtering "signal" from "noise" and finding relevant pages and sites. Expect Labs' CEO Tim Tuttle says that the technology has significantly improved over time and the app has changed somewhat from its inception to its launch today. For example, it used to listen to the entire conversation. However now it will pause and users are required to initiate "searching" via an "OK MindMeld" wake up phrase. 

The underlying technology seeks to deliver a better search and discovery experience on devices where the keyboard isn't particularly useful or there's no keyboard. There are myriad inputs into "search results" (anticipatory search results): time of day, location and "context" broadly speaking. If you sign in with Facebook it also grabs other information about you as another relevance input. 

Expect Labs' technology, while imperfect, is really the fulfillment of the vision behind Google Now: real-time, useful information that dynamically changes based on context. MindMeld is the "1.0" expression of that vision. Speech recognition is from Nuance but the natural language understanding is Expect Labs' own technology. 

There are a number of enterprise use cases in development; and one can see this technology being incorporated into a wide range of general and vertical applications. Google Ventures is an investor, as is Intel. Those are two potential buyers of the company. 

The technology is impressive and the major practical question for Expect Labs will be where to focus and how to fully express what the technology can do in a commercial context. 

Steve Jobs Was Right: People Aren't Searching in Mobile Like on the PC

Roughly three years ago Steve Jobs opined that search wasn't as central to the mobile user experience as it is on the PC. That sentiment elicited dismissals as naive or self-serving and was generally disputed. This is what Jobs said verbatim:

On the desktop search is where it’s at; that’s where the money is. But on a mobile device search hasn’t happened. Search is not where it’s at, people are not searching on a mobile device like they do on the desktop.

It turns out that when you consider what he actually said, Jobs was exactly right.

Various surveys have found that search is widely used on smartphones. But it's not used as often or as centrally as on the PC. Indeed, search is a more occasional or peripheral experience on smartphones (especially the iPhone), whereas people search many times daily on the PC.

Most popular mobile apps

Earlier today Consumer Intelligence Research Partners (CIRP) released survey data about most frequently used mobile apps among US smartphone owners. The survey measured frequency not reach. This is very important to understand about the data. The firm asked mobile users to identify their "three most frequently used [mobile] apps."

CIRP found that Facebook was the leading and most frequently used mobile app. That was followed by Twitter, Candy Crush and Instagram. The surprise is how low Google Search and Google Maps rank on the list. 

Google Maps is #12 and Google (the search engine) is #10. We don't get an analysis of usage by platform (i.e., iOS vs. Android). However I suspect we'd see different rankings on the two platforms, with Google doing better among Android users given search's prominence on the Android OS. 

It's unclear how large the sample in this survey was and so we can't tell how reliable these data are. In addition these are self-reported data and not behavioral or traffic data. People often report one thing and do something else. 

Having said all that, these data strongly argue that what Jobs said is accurate: "People are not searching on a mobile device like they do on the desktop." Although this has been written about at length in the past, if accurate, this more modest mobile search frequency represents an obvious problem for Google as migration from PCs to tablets and smartphones continues. 

With iBeacon Adoption, Macy's, Apple on Vanguard of Indoor Marketing

Last week ShopKick introduced "shopBeacon," which uses Bluetooth low energy (BLE) indoor positioning technology. The company is testing it with Macy's, which has also independently been using indoor location for some time (mainly leveraging WiFi) to enhance its in-store app experience for customers. (See ShopKick demo video.)

ShopKick's adoption of iBeacon is an important move to insert the company back into the in-store shopping conversation. It had been an early pioneer in mobile loyalty, seeking to help retailers drive consumers into stores. But as indoor location has gained momentum ShopKick has largely been on the sidelines -- until now.

ShopKick has a wide range of brands and national retail partners, including Target, BestBuy, Sports Authority and JCPenneys. The company seeks to serve retailers but also "own the customer relationship." Accordingly there's some tension between working with ShopKick and providing a direct indoor-location experience, as Macy's does through its app.

A less-well-known company seeking to do something very similar for retailers is Swirl. Swirl has both a consumer-facing multi-retailer app but also powers the indoor experience for retailer apps through an SDK. Timberland is the company's best-known partner. ShopKick is now also an indoor-location enabler with its shopBeacon BLE beacons. 

Apple itself is going to implement iBeacon in its own stores. There are a range of obvious and secondary use cases, including providing enhanced product information and notifications about Genius Bar appointments. Beyond an improved in-store experience, Apple hopes to boost sales through iBeacon. The product can also be used to support in-store mobile payments (see, PayPal Beacon).

It's well established that a majority of consumers have used smartphones in store for research purposes and many are interested in indoor/in-store information. However recent research from ISACA suggests that retailers will need to be judicious about how they use in-store notifications and personalization and not become too "pushy" in trying to upsell and cross-sell consumers. 

targeted marketing 1

Another challenge of sorts for retailers with indoor location is the fact that majorities of smartphone shoppers use retailer mobile websites. Indoor-location features are much harder to deliver via websites. Smaller numbers of consumers use retailer apps. This makes sense because apps are typically downloaded and used by a store's most loyal customers, which represent a minority of overall store shoppers. 

According to NPD survey data, 71% of smartphone owners access retail websites but only 57% use apps. Many of those apps fall into disuse shortly after they're downloaded. In addition, the survey found that a majority of smartphone shopping-related research was done at home and not on the go, suggesting "that engagement on their smartphone is more of an alternative for online shopping rather than a showrooming tool."

Accordingly in-store information directed at enhancing the customer experience is a way to make apps more relevant and engaging. But as the ISACA study indicates retailers (or mall and venue owners) will need to develop information, content and indoor experiences for customers that are informational and not merely about trying to sell things. 

This is a complicated arena for retailers and would-be providers of indoor location and marketing. Experimentation and testing are necessary to determine what's going to "work" for consumers, vendors and venue owners. Macy's is very smart and to be applauded for "getting out in front" of the issue and trying things, notwithstanding the potential exposure to "indoor surveillance" criticisms.

Future of Privacy Forum Announces Indoor Location Privacy Rules

The Future of Privacy Forum's Jules Polonetsky was one of the featured speakers at the inaugural Place Conference. He spoke about indoor location and privacy with Jennifer King from UC Berkeley. We alloted 30 minutes for the discussion but could have easily spent an hour on it.

Privacy is the 800 pound gorilla of indoor location and the issue that challenges and potentially threatens its roll out. Ever since the negative publicity and coverage suffered by Nordstrom retailers have been scared to death of talking about what they're doing with indoor location -- despite the fact that consumers stand to benefit greatly through these innovations. 

Hoping to head off regulatory intervention and preempt more ill-informed coverage and negative publicity, Polonetsky's Future of Privacy Forum (and Senator Charles Schumer of New York) announced a code of conduct that will govern indoor analytics and seek to protect consumer privacy.

The companies involved include Euclid Analytics, iInside, Mexia Interactive, Nomi, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions. Euclide and iInside spoke at the Place Conference.

This list doesn't include all the companies involved in indoor analytics (e.g., Retail Next) but the rest will adopt and abide by the rules announced today. And retailers will follow them. Basically the new rules require clear disclosures, enable consumers to opt-out of indoor tracking, make any tracking anonymous and prevent the misuse of information gained by venue owners. 

People always forget that much more intrusive closed-circuit video cameras have been in retail environments for more than a generation.

As our panel on indoor analytics pointed out most of the data aggregated and anonymously captured by retailers will translate into in-store improvements, from staffing to store layouts. However consumers need to be educated about all of this given how new and little understood it is. This is where retailers need to step up (rather than cower) and help consumers understand why and how indoor location will benefit them. 

Hopefully this new code of conduct will enable them do that with confidence.  

_____

Below is the full text of the press release: 

New York, NY – U.S. Senator Charles E. Schumer, The Future of Privacy Forum (FPF) and a group of leading location analytics companies – including Euclid, iInside (a WirelessWERX company), Mexia Interactive, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions – today announced that they have agreed to a Code of Conduct to promote consumer privacy and responsible data use for retail location analytics.  The companies responded to privacy concerns raised by Senator Schumer and the FPF about the use of this new technology.  The code of conduct includes in-store posted signs that alert shoppers that tracking technology is being used, and instructions for how to opt out. 

“This is a significant step forward in the quest for consumer privacy,” said Schumer.  “This agreement shows that technology companies, retailers, and consumer advocates can work together in the best interest of the consumer.  There is still much more work to be done and I will continue to push for privacy rights to be respected and strengthened, but this represents real progress and I thank the Future Privacy Forum and these tech companies for their hard work hammering out this agreement.

“Today, location analytics companies have introduced a comprehensive code to ensure they have data protection standards in place to de-identify data, to provide consumers with effective choices to not be tracked and to explain to consumers the purposes for which data is being used,” said Jules Polonetsky, executive Director of the Future of Privacy Forum. “These standards ensure that consumers understand the benefit of the bargain and have choices about how their information is used while allowing technology to continue to improve the shopping experience. As we quickly approach the holiday shopping season, this is not only the right move – but a timely one as well, adding a layer of trust, choice and transparency onto a shopping experience that in 2013 is more mobile and hi-tech than ever before.”

In July, Schumer warned that major national retail chains were testing technology that would allow them to automatically track shoppers’ location through stores.  Following this warning, FPF worked with the technology companies to develop a Code to ensure that appropriate privacy controls are in place as retailers seek to improve the consumer shopping experience. These technology companies use mobile device Wi-Fi or Bluetooth MAC addresses to develop aggregate reports for retailers.   

The Code puts guidelines in place to create best data practices that will provide transparency and choice for consumers. The Code calls for the display of conspicuous signage by retailers and for a central opt-out site for consumers.

Under the Code, companies that collect data through this technology must limit how the information is used and shared and how long it may be retained.  The Code mandates that companies de-identify the data and explain in their privacy policy how they do so. Companies are required to get opt-in consent when personal information is collected, or when a consumer will be contacted. The Code calls for opt-out consent where the information collected is not personal.  In addition, this data cannot be collected or used in an adverse manner for employment, health care or insurance purposes.

"We are just beginning to see the possibilities that in-store analytics can bring to shoppers and to retailers, and yet, as with any new technology, there is the chance for confusion about the intent and possible implications of such technology,” said Steve Jeffery, CEO, Brickstream. “We applaud the Future of Privacy Forum for taking the lead in bringing retailers and technology providers together to address these important issues.”

“We would like to thank Senator Schumer for his leadership on this issue,” said Will Smith, CEO, Euclid. "Privacy has always been a priority as we've designed and built our services, and we have been working diligently with FPF to release best practices for the retail analytics industry as a whole.”

"iInside and industry partners have made it a top priority to assure that consumers are well-informed and their personal privacy and identity are protected.  The newly announced code is a major step forward in establishing and communicating clear and concise standards across our industry," said Jim Riesenbach, CEO, iInside Inc.

“The release of a Code of Conduct to guide industry practice ensures that businesses and retailers are able to enhance their customers’ experience without compromising their privacy,” said Glenn Tinley, President & Founder, Mexia Interactive. “Business and consumers also can be assured that a company listed on the SmartStorePrivacy.com website has committed to following the code.”

"Proximity and location technology is evolving rapidly, and we want to make sure it’s deployed in an open, responsible and trustworthy manner. The retail location analytics Code of Conduct is a solid step in the right direction," said Marc Wallace, Co-Founder & CEO, Radius Networks, Inc.

“SOLOMO sees privacy as an opportunity for retailers to build trust with customers,” said Liz Eversoll, CEO, SOLOMO.  “We’ve collaborated to develop the Code of Conduct to ensure transparency and empowerment for retail customers.   Indoor location technology will offer customers new in-store experiences, special deals, and localized services as retailers introduce it in their stores.  Everyone wins.”“Turnstyle Solutions is pleased to partner with the Future Privacy Forum in the development of this Code of Conduct. We are confident the code lays the foundation necessary to protect sensitive consumer information, while offering retailers and consumers services that enhance their shopping experience," said Devon Wright, Co-Founder, Turnstyle Solutions.

Place 2013 - Agenda & Presentations

Place 2013 brought together the entire spectrum of companies building the indoor location ecosystem. Retailers, technology vendors, mobile developers, data providers, advertisers, agencies, and investors attended this unique, one-day event at the Palace Hotel in San Francisco and was the first-of-its-kind anywhere.

Sponsors
sponsor_graphic

Agenda & Presentations

8:45 AM - 9:00 AM
The Consumer Foundations of Place-Based Marketing - The majority of smartphone owners are already using their devices in stores to find product and price information, as well as coupons. Opus Research will present proprietary findings on in-store behavior, privacy attitudes and consumer receptiveness to indoor promotions.
Speaker: Greg Sterling, Senior Analyst, Opus Research
View slides from this presentation

9:00 AM - 9:45 AM
The State of Indoor Location - For the past several years online mapping giants and technology providers have been laying the groundwork for indoor location. What is the current state of the infrastructure? What technologies are already deployed and how accurate are they? What indoor consumer and advertiser scenarios are possible today and what might be possible within three years?
Speakers:
Joseph Leigh, Head of Venue Maps, Nokia
Leslie Presutti, Mobile, Location and Computing Business Unit, Qualcomm Atheros
Zack Sterngold, VP of Americas, Boingo Wireless
Avinash Joshi, Chief Technologist, Wireless LAN Group, Motorola Solutions

9:45 AM - 10:25 AM
Keynote: Why Indoor Location Will Be Bigger than GPS or Maps - The explosion of smartphones with built-in sensors, accelerometers, GPS and WiFi is making indoor positioning not only possible but also inevitable. The emerging indoor opportunity for venue owners, retailers and technology providers is potentially massive. Google’s Don Dodge, an investor and close observer of the space, will explain why he believes indoor location and marketing is going to be huge and potentially larger than GPS and maps.
Speaker: Don Dodge, Developer Advocate, Google

10:45 AM - 11:05 AM
Case Study: Point Inside - Point Inside was one of the early consumer-facing apps in the indoor location space. The company has since shifted its focus to enterprises and enabling retailers to take advantage of indoor location. The company will present a new case study featuring a major home-improvement retailer.
Speaker:Todd Sherman, Chief Marketing Officer, Point Inside
View slides from this presentation

11:05 AM - 11:30 AM
Featured Case Study: Forest City and Path Intelligence - Forest City Enterprises are many years into using mobile device monitoring and advanced indoor analytics to help create a better environment for their shoppers and their retailers. Hear from the project sponsor and partner Path Intelligence on how they have transformed asset management, leasing, and marketing.
Speakers:
Stephanie Shriver-Engdahl, VP, Digital Strategy, Forest City
Cyrus Gilbert-Rolfe, VP, Path Intelligence
View slides from this presentation

11:30 AM - 12:15 PM
Digital Analytics for the Real World - Using a variety of technologies to identify when and where smartphone shoppers are in stores, retailers can now leverage "big data" previously reserved for Internet companies alone. These "real world analytics" hold profound implications for everything from in-store merchandising and staffing to consumer marketing. Leaders in the segment will offer views on opportunities and potential pitfalls for indoor analytics.
Speakers:
Jon Rosen, Executive Vice President, iInside
Will Smith, CEO, Euclid
Alexei Agratchev, Co-Founder, RetailNext
Michael Healander, General Manager, GISi Indoors

1:15 PM - 1:55 PM
Retail Spotlight: Aisle411 & Dick's Sporting Goods - Aisle411 will discuss current retail deployments and their impact on operations, consumer loyalty and marketing. Dick’s Sporting Goods will share how it’s thinking about indoor location, privacy issues and the overall opportunity. And Bob Rosenblatt, former COO of Tommy Hilfiger Group, will outline the intriguing business opportunities for retailers in develop- ing indoor marketing strategies.
Speakers:
Nathan Pettyjohn, Founder & CEO, aisle411
Rafeh Massod, VP, Customer Innovation Technology, Dick's Sporting Goods
Bob Rosenblatt, CEO, Rosenblatt Consulting
View slides from this session from aisle411

1:55 PM - 2:15 PM
Using Store Visits and Data for Advanced Retail Intelligence - Online to offline has been the dominant but largely invisible paradigm of Internet-driven spending. Using mobile to better target and influence store visits is only the beginning. PlaceIQ CEO Duncan McCall will offer a major retail case study fo- cused on measuring store visits after mobile ad exposures. He will also discuss how to connect online, nearby and indoors for a more complete picture of the customer journey.
Speaker:Duncan McCall, Co-Founder & CEO, PlaceIQ
View slides from this presentation

2:15 PM - 3:00 PM
Ad-Tracking to the Point of Sale - Panelists will discuss the current and future use of indoor location as a way to demonstrate ROI and sales lift on a per- campaign basis. What is the current state of the art in matching store visits to ad exposures? And what are the broader implications of connecting online ads and offline data?
Speakers:
Monica Ho, Vice President of Marketing, xAd
David Shim, Founder & CEO, Placed
Ameet Ranadive, Director of Product, Twitter Ads Team
Michael Shevach, SVP Ad Solutions, Retailigence
Duncan McCall, Co-Founder & CEO, PlaceIQ (moderator)

3:20 PM - 3:50 PM
Opt-in or Opt-out: Indoor Location & Consumer Privacy - Indoor location has already gained the attention of members of Congress and been called "troubling." While not everyone agrees about the level of concern, there are obvious consumer privacy issues raised by in-venue smartphone tracking. How should the companies be addressing these issues today and what might regulation require tomorrow?
Speakers:
Jennifer King, School of Information, UC Berkeley
Jules Polonetsky, Executive Director & Co-chairman, Future of Privacy Forum

3:50 PM - 4:10 PM
Case Study: Meridian/Aruba Networks - Meridian, who was recently acquired by Aruba Networks, will offer two indoor case studies, one involving a small business (Powell’s Books in Portland) and another involving a major U.S. apparel and housewares retailer.
Speaker: Jeff Hardison, Vice President, Meridian
View slides from this presentation

4:10 PM - 4:55 PM
Microfencing: Targeting In-Aisle Shoppers - Billions of dollars are spent each year by brands and manufacturers trying to influence consumer buying in stores. A percentage of that money will migrate to indoor digital marketing. What conditions must first exist and what will those brand-consumer interactions look like? The panel will explore these questions as well as the contours of the broader indoor marketing experience.
Speakers:
Neg Norton, President, Local Search Association Ben Smith, CEO, Wanderful Media
Melissa Tait, VP of Technology, Primacy
Erik McMillan, CEO, BrickTrends
Asif Khan, Founder, Location Based Marketing Association (moderator)

4:55 PM - 5:30 PM
Reality Check: Assessing the Indoor Opportunity - The other sessions explored major opportunities (and challenges) of indoor location and marketing. Now it’s time for a fun, yet sober assessment of whether and how soon these scenarios will come to pass. Is there real demand and who will own the “indoor channel”? Where will the "place-based market" be next year, in three years?
Speakers:
Jeremy Lockhorn,VP, Emerging Media, Razorfish
John Gardner, Partner, Nokia Growth Partners
Chandu Thota, Engineering, Google
Wibe Wagemans, IndoorAtlas

Who Will 'Own' the Indoor Channel: Retailers or Google and Facebook?

One of the questions that we'll be addressing on the "Microfencing" (in-store/in-aisle targeting) panel at Place 2013 is "who will own the indoor channel?" The operating assumption is that the venue owners/retailers will control communications and marketing within their indoor environments. But that may not turn out to be true if retailers aren't careful and quick to embrace indoor location. 

An analogy may be the wireless carriers. Once the gatekeepers of all things mobile, they have largely been sidelined and reduced to "commodity" providers of bandwidth. The handset OEMs, platform providers and app developers dominate mobile. 

Earlier today Reuters reported that Cisco was "working with Facebook Inc to offer free Wi-Fi Internet access to consumers at public places such as hotels or retail stores using their Facebook log-in. A visitor could check in at a hotel without having to line-up at a front desk by simply signing in via the Facebook application on a smartphone, Cisco said."

Google is also contemplating its own WiFi infrastructure. By the same token some retailers are hesitant or cautious about embracing indoor location. For example, JC Penney decided to eliminate public WiFi to save $7 million a year. In doing so it shut down its indoor location consumer infrastructure. While it will save some money it won't stop showrooming and may deprive JC Penney of an important marketing and customer service capability. 

If companies such as Facebook and Google, or other third parties, step in and provide the consumer network, chances are very good that consumers will use the Facebook or Google network rather than the store's. That would likely make the Google and Facebook the new gatekeepers of indoor marketing, giving them a significant advantage over retailers and a stronger position when it comes to selling and delivering indoor advertising and promotions. 

Retailers cannot and should not "wait and see" or they may find themselves, like the wireless carriers, on the sidelines of digital marketing activity in their own stores. I could be wrong and there are a number of unknown variables. But retailers stand to lose much if they fail to act. 

We'll fully explore these questions at the Place Conference on Tuesday, October 8:

Microfencing: Targeting In-Aisle Shoppers

Billions of dollars are spent each year by brands and manufacturers trying to influence consumer buying in stores. A percentage of that money will migrate to indoor digital marketing. What conditions must first exist and what will those brand-consumer interactions look like? The panel will explore these questions as well as the contours of the broader indoor marketing experience. 

  • Neg Norton, President, Local Search Association
  • Ben Smith, CEO, Wanderful Media
  • Melissa Tait, VP of Technology, Primacy
  • Erik McMillan, CEO, BrickTrends
  • Asif Khan, Founder, Location Based Marketing Association (Moderator)

 

Apple Shunned NFC, Has Anointed BLE for Indoor Location

I wrote several days ago on my Screenwerk blog about PayPal's new Beacon payments and indoor location initiative. I explained that Apple's decision not to include an NFC chip in the new iPhone means essentially that NFC is marginalized if not dead in the US market. In its place Bluetooth Low Energy (BLE) may become the mainstream alternative to what NFC would have enabled (e.g., mobile payments).

PayPal Beacon relies on BLE. At those businesses where a Beacon device is plugged in PayPal users simply check-in. Beacon identifies them and payment is automatically transferred from the default account. Payment happens “hands free” without a tap, swipe or other app interaction. 

Beacon is also PayPal’s entry into indoor location. PayPal will obviously know you’re in a venue and then can do any number of things, including delivering highly specific, indoor marketing messages or ads. PayPal is also making Beacon available to third party developers, who will be able to do similar things accordingly.

Apple's iOS 7, which will be available on September 18 (to older iPhones as well), will permit all eqipped devices to interact with BLE iBeacons in malls, airports, stores and other venues. 

Apple acquired indoor mapping company WiFiSlam earlier this year. That was the "wake up call" for many people to take indoor location seriously. One of the first and obvious applications of iBeacon is indoor mapping. But it doesn't stop there. 

Just as with PayPal's BLE initiative, iBeacon will enable Apple to move into payments and indoor marketing and allow third party developers to leverage those capabilities. With its more than 600 million credit cards on file I've got to believe that Apple will enter mobile payments eventually and BLE will be the way in all likelihood.

More broadly I suspect that iBeacon will popularize and jumpstart indoor location for a host of third party developers. 

For a comprehensive introduction to the indoor location and marketing opportunity, and its broader implications, come to Place 2013.

Placed Introduces Offline Mobile Ad Tracking

Last week Placed introduced Placed Attribution, a mobile ads offline tracking solution. The idea is to used Placed's opt-in panel to measure the impact of mobile ad exposures on in-store visits. PlaceIQ has a similar offering using a different methodology.

Capturing the offline impact of digital ads on store visits (and potentially sales) is really a kind of "holy grail" when it comes to conversion tracking. The ratio of online to offline conversions is skewed heavily in the direction of offline. E-commerce is only 5.5% of offline retail and mobile commerce is approaching 10% of e-commerce.

Yet up to half of offline retail spending may not be impacted by digital media and the internet. Clicks are a terrible metric for mobile advertising, and secondary metrics like map views and calls are better but don't capture the entire picture for marketers.

There's a lot more "visibility" on performance when you can start to measure how digital ads impact offline purchase activity. That's the objective of Placed Attribution. Here are the kind of data to be reported:

  • Store Visits: In-store visits attributed to mobile advertising.
  • Lift – Standard: Impact of audience targeting and ad exposure in driving in-store visits as compared to the baseline population.
  • Audience Features: Demographic and geographic characteristics of audiences exposed to impressions, and those who went in-store.

Some of this will be extrapolated from a sample drawn from Placed's panel. Even so, it represents an advance over most of the ways in which marketers try to model attribution when it comes to mobile ads and offline conversions. Offline/in-store tracking will be common -- even mandatory -- for many categories of mobile ads within 12 - 18 months.

We'll be discussing "Ad Tracking to the Point of Sale" with PlaceIQ, Placed, xAd and Retailigence at the Place Conference on October 8 in San Francisco

Mobile Credit-Card Scanning Should Be Ubiquitous

Dan Miller and I took a briefing with Jumio this morning. Jumio is an authentication and identity management platform (mischaracterized originally as "augmented reality"). The company has been around since 2010. 

It has two major products that rely on the same technology. Netswipe helps facilitate transactions on mobile apps and Netverify enables accurate remote identity authentication for fraud prevention. I'll focus on the former but the latter is very impressive and worthy of its own discussion later.

Jumio works in the same way that Card.io did. Using an SDK developers embed the Jumio solution within their apps. When the consumer is ready to complete a transaction or check out (book a room, flight or make another kind of purchase), she merely scans the desired credit card and enters the CVV number manually. The transaction takes a fraction of the time that would otherwise be required if she were to key in 16 digits, enter her address information, etc. 

If you've already got your credit card and related information on file (see, e.g., Amazon, iTunes) there's less of a need for this approach. However developers should offer it to new customers as a way to generally eliminate barriers for consumers, and capture credit card details for faster checkout next time.

Jumio competitor Card.io was acquired by PayPal one year ago, leaving Jumio as the lone independent vendor of this type card-scanning technology. Every mobile publisher and developer should be using Jumio or Card.io to improve conversion rates and the customer experience. Beyond mobile transaction-abandonment, frustrating users reflects poorly on the brand according to many studies.

Accordingly, every mobile developer should be using a mobile card-scanning solution as one way to remove friction from mobile transactions. It's not clear why they might not, except for perhaps for ignorance, lethargy and inertia. I could also imagine this approach as an alternative to card swipes in stores, although that's less necessary.  

Jumio has adopted a flat-fee SaaS model. Customers pay a fixed monthly fee for an unlimited number of transactions. 

It's rare instance where consumer and merchant interests are entirely aligned. But here they are: more secure and faster transactions for the merchant and consumer, as well as fewer charge backs and fraud. It's kind of a "no brainer." 

Below is a promotion video that explains the Jumio Netswipe offering: 

Study: 97% of Mobile Search in Gas & Convenience Category Happens in Apps

In honor of the blazing US summer and road trips, xAd and Telmetrics have released more data from their "Mobile Path-to-Purchase Study," this time on consumer behavior in the "Gas & Convenience" category. The study, which combined a mobile user survey (n=2,000) and consumer behavior data (n=6,000), was conducted by Nielsen earlier this year.

As might be expected the study reflects the very mobile-centric nature of the category, which includes convenience store visits, gas purchases and minor automotive service (i.e., oil changes). 

Below are the study's key findings:

  • 85% of time in the category "is spent on a smartphone with most conducting gas price comparisons/searches"  
  • 97% of mobile search happens within an app vs. mobile web (e.g., GasBuddy)
  • 80% of smartphone search and 40% of tablet search happens on the go (out of home) 
  • 88% plan to buy within the same day (2/3 within the hour) but only 10% have a specific place/business in mind
  • Location and price were the two factors that most influenced conversions (75% sought a location within five miles)

Interestingly, the study reported that "Gas & Convenience searchers spend an average of 6 minutes per mobile search session," which is 50% more than "the average Retail mobile search session." 

The study also found that Gas & Convenience users were very open to influence and receptive to mobile advertising, especially if the ad pertains to a nearby location and/or offers a deal or coupon. 

Retailers Fail to Connect with Customers Via In-Store Technologies

While countless retailer apps and mobile websites are designed specifically to deliver an "omnichannel" experience -- tracking a customer through the lifecycle of a purchase -- retailers are missing out on opportunities to engage customers through in-store technologies, says a new report by EKN Research.

A survey of more than 60 large retailers found just 13% of retailers are offering in-store features for mobile apps indicating a significant gap in leveraging the use of smartphones or mobile devices for customer engagement.

In terms of providing the infrastructure for ubiquitous connectivity, only 1 in 5 retailers currently offer free in-store wi-fi, with 42% of retailers having no intention of ever offering free wi-fi in stores.

InStore_Technologies_Jul8

Mobile technologies may offer new opportunities for customers but many retailers are not willing to make the investment. The report finds that IT spending on store technologies will remain relatively flat in the next three years, representing 31% of the total IT budget in 2013. Though the share is expected to increase to 35% by 2016.

"In 2013, increasing store operations efficiency remains retailers’ top goal from investments in store technologies. Running an efficient store should be table stakes for mature retailers, and their top goal should focus more directly on improving customer engagement. EKN views this as evidence that the focus hasn’t yet shifted for a majority of the retailers."

This news comes on the heels of a recent comScore report that found consumers are open to communications from retailers on their mobile devices with 47% of shoppers willing to have a retailer to send a coupon to their smartphone when they are in-store or nearby.

And previous data suggest a majority of mobile users are accessing retailers' websites for in-store sales or customer service functions.

We'll be exploring the current pulse of retailers and in-store marketing technologies at our upcoming Place Conference this October in San Francisco.

Growing Consumer Interest for In-Store Delivery of Mobile Coupons, Says Study

A new report by comScore shows how mobile and social channels are changing online buying habits and how retailers can benefit in delivering a blend of choices for consumers including mobile coupons.

The study, Pulse of the Online Shopper , notes a variety of flexible options for consumers – 46 percent said they are less likely to comparison shop when using a retailer's mobile app and 44% want the ability to buy online and pick up their purchases in a stores.

Of particular note, consumers are open to communications from retailers on their mobile devices with 47% of shoppers willing to have a retailer to send a coupon to their smartphone when they are in-store or nearby. This trend underscores the potential role of indoor marketing technologies.

comscore_infographic

Regarding mobile channels, the report states:

Mobile is quickly becoming the preferred e-commerce channel as 7 out of 10 online consumers access multi-channel retailers through a digital channel. Of those mobile shoppers, 30% prefer to use a smartphone or tablet. Also, 50% of online shoppers who own a smartphone and nearly 60% who own a tablet make purchases on these devices.

More than 3,000 U.S. consumers were surveyed on their online shopping habits and the report was commissioned by UPS. A copy of the executive summary and white paper can be downloaded here.

Mobile Campaigns That Use Location Outperform Standard Campaigns by 2X to 3X

Location-based mobile ad network Verve Mobile released a "State of the Market: Location Powered Mobile Advertising" report this morning. It focuses on the fast-food and casual dining restaurant category and offers several case studies that show the lift provided by location targeting. 

Here are a few datapoints from the report: 

  • QSR/casual dining campaigns that leveraged location data performed 2x those that didn’t
  • Nearly 70% of all QSR/casual dining campaigns leveraged location targeting
  • Verve's case studies, using location targeting (display ads), show 3% and 4% CTRs, which is quite high for display.

Below is the distribution of location/audience targeting methodologies employed by Verve's customer-advertisers:

In the pie chart above, geo-fence means relatively precise targeting around business locations. Geo-aware means broader location targeting such as city or DMA level. And audience targeting is demographic or psychographic segments or profiles (e.g., soccer moms, vacation travelers, sports enthusiasts) inferred from location. 

Verve also reported that "location targeted advertising [ ] revealed a greater than 3X lift in foot traffic to the advertiser’s locations. Not only did exposure to the ad increase the likelihood a user would visit an advertiser location, it also decreased the likelihood a user would go to a competitor’s location by more than 20%."

Accordingly the major takeaways are the following:

  • Adding location increases consumer engagement and response rates by at least 2X
  • Location related copy and mapping/geo-precise landing pages can drive 3X foot traffic vs. ads that don't employ this type of ad creative or techniques

Survey: 63% of Smartphone Shoppers Would Rather Buy in Physical Stores

Content management software company Kentico recently conducted a mobile-shopping survey (n=300 US adults). The sample size is small and so the results must be viewed cautiously. However there were a few interesting findings. 

Among them, the survey found that 85% of smartphone owners do comparison shopping (products, prices). However "only" 45% do so in stores. A recent report from Nielsen, xAd and Telmetrics argued that only 6% of mobile users "showroomed." Interestingly, most of the Kentico survey respondents (63%) said they would rather buy locally, in a physical store vs. online.

In terms of the mobile user/mobile commerce experience, as might be expected, the usability of websites was a major variable:

Whether or not an online shopper clicks ‘buy’ isn’t solely dependent on products or pricing: 78% of smartphone owners, 75% of tablet owners and 69% of laptop owners say it also comes down to the look and feel of a company’s mobile website . . . Word of mouth (28%), company websites (25%) and in-store experience (18%) weighed most heavily on strengthening or eroding brand affinity.

These respondents felt that PCs and laptops provided a better online shopping experience overall than tablets or smartphones.

Which device provide the best shopping experiences?:

  • 48% (desktop) computers
  • 40% laptops
  • 9% tablets
  • 3% smartphones

A significant minority (44%) of users said that they would never return to websites that featured bad user experiences (not optimized for mobile). This is not a surprise and echoed by other findings already in the market.

Survey: 52% of Recent Travel Booked in Mobile vs. 48% on PC

Location-based and WiFi ad network JiWire is out with its Q1 insights report. The document contains a range of information drawn from surveys of mobile users who access the internet at mostly JiWire-powered WiFi hotspots. This quarter the company zeroes in on behavior in the travel vertical and examines multi-screen activity and cross-platform conversions accordingly.  

We know that travel is a very mobile-centric vertical with lots of apps for smartphones and tablets. And JiWire confirms extensive multi-device usage for travel research and purchases:  

  • Almost 50% of active mobile consumers are using smartphones & tablets for travel research
  • While laptops remain the preferred device for travel ... 27% [are] already saying they use their smartphone to make travel-related purchases. 
  • Nearly 50% of consumers will spend $500 or more in a mobile-travel booking context
  • 52% of travel booked within the past three months was on a smartphone or tablet vs. 48% on laptops

Next comes a fascinating chart showing the multi-screen purchase process in travel (a microcosm of consumer behavior more generally). Google documented this phenomenon previously in research showing that 90% of consumers move “sequentially” between different screens throughout the same day.

Below is the JiWire chart showing how consumers start on one device and often convert on another:

Below is the comparable Google chart:

Google found, generically, that more people started research on a smartphone than any other device category. This is generally consistent with the Nielsen-xAd-Telmetrics data released today. However, in travel laptops still command the majority of activity according to JiWire -- but not by much. As mentioned above, more travel booked in the past 90 days has come from mobile than the PC (52% to 48%). 

JiWire also investigated what variables influenced travel-purchase decisions and how those purchases were researched and completed on mobile devices. Leisure travelers were more impacted by discounts; business travelers were influenced by loyalty programs and company policies. (This finding has obvious mobile marketing implications.)

As reflected in the chart above, travel aggregator apps (e.g., Kayak) and branded airline apps (e.g., United) were more often used than mobile websites for travel bookings. This makes sense because the user experience is likely to be better and credit card and other personal information may be stored, expediting the checkout process. People who are required to fill out lots of fields, including credit card information are less likely to complete those transactions in mobile. 

Another factor impacting the findings regarding app vs. mobile usage is the probability that many of the people surveyed are frequent travelers and are more likely to have apps on their mobile devices than occasional leisure travelers who may be less aware of their app options. 

Study: As Many As 54 Million May Be Mainly Mobile Retail Shoppers

The latest installment of "Mobile Path to Purchase" research from Nielsen, xAd and Telmetrics drills down into retail-shopping attitudes and behaviors. As with the broader study, previously released, the findings show a significant percentage of users are doing shopping research exclusively on mobile devices. 

The Mobile Path to Purchase study is in its second year. The findings are based on an online survey of 2,000 US smartphone and tablet owners and “observed consumer behaviors from Nielsen’s Smartphone Analytics Panel of 6,000 Apple and Android users.”

According to the report, 42% of smartphone and tablet owners did not consult PCs at all as part of their retail shopping research. The broader study found the overall number to be 46%, who didn't use PCs. This is a staggering data point in my opinion.

Nielsen mobile retail shopping

Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013

If we extrapolate these "mobile only" numbers, assuming they're representative, we're talking about a potential audience of perhaps 54 million in the US who may be relying primarily or exclusively on smartphones and tablets to shop.  

Other noteworthy findings from the study include: 

  • High conversions: More than 55% of mobile retail shoppers ultimately make a purchase
  • Immediacy:30% of smartphone owners and 25% of tablet users sought to make purchases within one hour. However a larger percentage of tablet owners (41%) "take a month or longer to make a purchase."
  • Where conversions happen: 77% of smartphone-based purchase activity happen locally, in stores. Tablet conversions are more evenly distributed: 39% in stores, 32% on PCs and 24% on tablets themselves.

The retail report also seeks to debunk a couple of "myths" about mobile usage. The first is that smartphones are used predominantly "on the go" and/or near the point-of-sale. The study found that smartphones were used throughout the pre-purchase research process and that the largest percentage of use was in fact "at the start" of shopping rather than near the end. 

Nielsen mobile shopping behavior

Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013

The second "myth" debunked (though not quite as easily) is the notion that most smartphone owners are "showrooming" whenever they shop. The report says that showrooming (in-store price-comparison shopping) is relatively rare and practiced by a very small minority of users:

Only 6 percent of smartphone users conducted their most recent mobile retail search in-store . . . Mobile shoppers are in fact using their devices for comparison-shopping before and after an in-store visit. 

However previous survey findings from the Pew Internet Project and Google argue that significant numbers of smartphone owners do compare prices while in stores. For example, Pew's research found that 72% of smartphone owners used their devices while in retail stores. And the more recent Google-sponsored study reported the top in-store smartphone activities were the following:

  1. Price comparisons
  2. Finding offers and promotions
  3. Finding locations of other stores
  4. Finding hours

What the Nielsen-xAd-Telmetrics data argue is that most of this type of activity occurs before or after someone goes into a store. It may be that the wording of the questions influenced these results, though it may not be possible to entirely reconcile the conflicting findings. Regardless, the more important point is that smartphones and tablets are heavily used by consumers as part of their shopping research.

Accordingly, retailers that are not aggressively addressing the mobile audience are completely missing huge numbers of people and potential sales. 

Google Makes Downpayment on the 'Star Trek Computer'

At the Google developer conference in San Francisco a couple of weeks ago, Google demonstrated "conversational search" on the PC. It was one of the clear highlights of the nearly three-hour keynote. What the demo showed was Google's voice search (and audio read back) capability together with "context awareness" of previous query results.

For years Google has very self consciously been trying to replicate the "Star Trek computer." Now Google is making some meaningful strides toward that objective. 

In the demonstration at the Google event, we saw the capacity to search for a person, place or thing and then do follow-up searches using pronouns or otherwise building on the previous query. The Google representative spoke to the computer and planned a trip to the Northern California beach community of Santa Cruz. She spoke queries to her PC and got voice-response answers from the Google "assistant."

This kind of "context awareness" or "conversational" capability is present to varying degrees in Siri today (and other "assistants") as well as other "AI" driven call center and customer service solutions. 

Following the lead of Siri and then going beyond it, Google is transforming conventional search into a personal assistant experience. This is the clear future direction of the market. Google's voice search and Google Now information or answer "cards" illustrate this trajectory. As of late yesterday some of those same capabilities have been brought over to the Chrome browser on the PC.   

If users update their Chrome browsers to the latest version they'll find a prominent new voice-search experience on Google.com (it isn't yet available from the URL bar search). Many of the answers or results are "read back" to you (where there's an answer card or Knowledge Graph entry). However this doesn't happen all the time. And in my quick testing, the ability to follow up with secondary searches using pronouns and queries referencing previous results was very limited. 

Still, the spoken read-back (as in mobile search) is fun and as Google develops this contextual and conversational capability further you may be inclined to start having more verbal interactions with your computer.