Indoor Marketing: The Next Disruptor?

xAd | 08/22/2013


The evolution of indoor location marketing could mean merchants are as close as ever to closing the loop between online and offline, and this digital transformation could translate to more efficient revenue opportunities for traditional media.

Industry leaders see the prospect of tracking consumers inside brick-and-mortar as another means of bridging the gap between their online and offline behaviors, further localizing “big data” to potentially influence consumption.

Greg Sterling, senior analyst for Opus Research, says that two emerging trends are driving the development of indoor marketing. The first is analytics that track what ads drive in-store visits and then a consumer’s path within a store.

The slower-to-develop angle is focused on a customer’s in-store experience, Sterling says. This could include sending customers mobile offers, a la shopkick, once they enter a store, guiding them where they want to go based on a shopping list.

Indoor location trackers use WiFi signals, Bluetooth and other smartphone sensors to examine how much time a consumer spends in certain aisles and at what displays he or she stops. In addition, Google has constructed indoor maps for many shopping malls, and Apple purchased indoor-location tracker WiFiSLAM for a reported $20 million in March.

As indoor maps and WiFi become more accessible at storefronts — a hurdle the space still needs to clear for wide adoption — merchants or brands could send a consumer an offer via SMS, email or a push notification based on his or her location. For example, Crest could send a consumer at a toothpaste display a mobile coupon for toothpaste.

The prize for media companies: “No one has captured the local retail digital shopping audience,” Wanderful’s Smith says. But where a media company can insert itself into the space hinges on how indoor marketing develops, Sterling adds.

“Like any new technology, it is going to take a while for the masses to adapt,” says Monica Ho, xAd’s VP of marketing. “Even though smartphone penetration has passed 50%, a lot of smartphone users are not leveraging the full capabilities of their device. Again, this usage will grow over time, but it will take a little while.”

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