February 26, 2015
Consumers expect free Wi-Fi at libraries, airports, cafes, and even subway stations, but not many people expect to get online for free during store runs for toilet paper and mouthwash. But that’s about to change as more big-box and specialty retailers offer free in-store Wi-Fi. Starting in 2012, stores such as Target, Kohl’s, Walmart, Sak’s, and Macy’s began offering free Wi-Fi in the majority of their stores and since then many retailers have followed suit.
In the age of eCommerce, retailers are continually searching for ways to entice customers in store, and free Wi-Fi is simply another perk that consumers now expect. Recent research from Yankee Group finds 96 percent of consumers prefer stores that offer free Wi-Fi and 78 percent of shoppers would access Wi-Fi if it were offered in-store. Customers can use free Wi-Fi to look up more information on products, send deals to friends, or search for coupons to redeem in store. Of course, they can also use its “showroom” — searching on Amazon and other competitor sites for better prices on items they find in-store. Retailers are aware consumers sometimes use their free Wi-Fi to buy products online from competitors, but that reality doesn’t dampen their desire to roll out free Wi-Fi.
Why? Because retailers get a host of benefits in return. First, when shoppers log into a store Wi-Fi network, the retailer can improve the in-store experience by sending coupons or personalized ads as they stroll the aisles. But even more importantly, retailers can analyze real-time customer data to better understand what shoppers want.
The type of data retailers can explore from Wi-Fi networks includes location information, store traffic patterns, dwell time in certain areas, web destinations visited, and products researched online – offering a wealth of information about each customer’s in-store shopping behaviors.
Retailers are increasingly clear that analyzing “edge data” from Wi-Fi routers and mobile devices will be critical in understanding shoppers and delivering a more engaging shopping experience. In a recent Cisco study, 47 percent of retail companies agreed that “most data will be processed at the edge,” the highest percentage of any industry surveyed. To draw conclusions from this deluge of data, retailers are increasingly working with in-store analytics providers such as RetailNext and BrickStream.
“By identifying unique customers in a store through opt-in programs like guest Wi-Fi, retail store analytics can improve the effectiveness of marketing by quantifying and attributing marketing spend to a specific customer and transaction,” said Adam Silverman, principal analyst at Forrester Research, in a 2014 report titled “Analyze This: Web Style Analytics Enters The Retail Store.”
Analyzing customer data always comes with privacy concerns, but Wi-Fi is one of the more transparent ways to evaluate shopper data — as compared to GPS tracking, in-store video feeds, and location-tracking beacons, which are used in many retail stores without explicit customer permission. Guest Wi-Fi networks, on the other hand, are opt-in and require customers to click a box saying they agree to some level of anonymized data collection.
As one San Francisco shopper, a 27-year-old woman named Kyla said, she “almost always” connects to the store’s free Wi-Fi while shopping. “It just saves that extra little bit of data in my cellular plan,” she said. When asked if she knew stores were paying attention to her shopping habits through the Wi-Fi network, she said, “I hadn’t really thought about that, but if they think information about which cleaning supplies I purchase is interesting, I guess they can go ahead and collect it.”
Kristi Essick covered technology, business, and venture capital for more than a decade in San Francisco, London and Paris. She has served as a special correspondent in Paris for the Wall Street Journal Europe, where she wrote a weekly column on the European venture capital scene. Prior to joining the Journal, Kristi was the Paris bureau chief for the Industry Standard, leading coverage of the European startup sector, and covered technology as a senior European correspondent for the IDG News Service. Used with the permission of http://thenetwork.cisco.com/