A study has found offering in-store wifi led to a 28 percent increase in customer loyalty in shops. This was also associated with a 2 percent increase in sales. Is it worth investing in wifi? The answer across the board seems to be a resounding yes – just don’t get too creepy with it.
Founder and president of IHL group, a global research firm, Greg Buzek says the study shows in-store wifi gives retailers the biggest bang for their buck in increased loyalty and sales.
“This allows them to get more item information and save sales otherwise lost, as well as replicate the experience of their best salespeople across the chain,” Buzek says.
“Smart retailers are racing to upgrade their stores to take full advantage of the opportunities.”
Several well-known companies in New Zealand are already on board with this trend.
McDonald’s rolled its wifi out to participating restaurants in 2013, and The Warehouse Group finished installing wifi through out its 92 stores in 2014.
Warehouse Group head of PR and media person Julia Morton says customer feedback has been great.
“Mobile devices are now an integral part of many customers’ retail journeys and we’ve wanted to do all we can to give customers a further level of convenience when they shopped in our stores,” Morton says.
“Plus, team members have increasingly needed to use wifi to complete more tasks at the shelf-edge where they are closer to customers, so it’s been a benefit for a number of reasons.”
This includes a staff member finding a product online or in another store for a customer when it’s not available from that particular store.
The study found giving employees wifi also provides benefits, as there was a 3.4 percent increase in sales.
Wifi usage creates a wealth of customer information.
Retailers can get insight into customer’s shopping patterns, purchases and dwell times, reward returning customers, personalise offers and create a multi-channel brand experience.
James Page from Dynamics Solutions, an Intergen company that’s partnered with Microsoft, suggested at the Retail Australasia Summit earlier this month that stores can provide free wifi to track customer movements within the store via location services in mobile phones.
This means retailers can also tell when previous customers return.
“It’s great,” he says. “We carry this unique identifier around with us everywhere.”
Page gave the example of Microsoft’s new Xbox Kinect, a product which is targeted at gamers.
He says the movement-tracking software has commercial applications, as its skeletal monitoring can detect customers’ emotions, picking up their reactions to a product before the buying decision is made.
Heat tracking can show dwell times within a store.
Page admitted some consumers might find these ideas “scary” and counselled caution.
“There are some sharp edges to this whole thing,” he says. “Customers will vote with their wallet if we get this wrong, if we get too intrusive.”
“We can do far more than customers think we can, and we do far more than customers think we should.”
Currently wifi monitoring in store is largely self-regulated in New Zealand.
Andrew Gilbert wrote on Paymark’s blog about it last year:
“If you partake in internet shopping then who knows what valuable information your favourite online retailer holds on your customer activity. This information is vital for identifying cost savings and evaluating the success of marketing strategies and campaigns.
So why should bricks-and-mortar retailers miss out on these insights? I mean they could certainly use the help against their online competitors… And this is why I ask, what is the actual issue here?
Is it a question of consent? Has it now reached a point where we’re so used to sharing information that we’ve almost come to accept it as an expected part of the internet? And has this in itself become a form of consent?”
The bottom line is how relevant it makes the experience for the shopper, Page says.
“Insight underpins unique, engaging experiences that create enduring brand empathy,” Page says.
“Systems are secondary to what you decide to do with the insight.”
It also might be case of you scratch my back, I scratch yours, as most customers are willing to be tracked if they get something out of it in return.
DigitasLBi’s connected commerce survey in 2014 found 86 percent of shoppers would be more likely to embrace GPS and wifi tracking if they received customised benefits in return, such as vouchers.