Why Wi-Fi location analytics can lead to more efficient retail operations

Location services are among the most powerful capabilities of mobile devices, enabling every use case from dating apps to rewards programs for safe driving.

And if you’ve ever temporarily disabled Wi-Fi on your phone to save battery or simply use a faster available cellular connection, you might have later gotten a notification to the effect of “turn on Wi-Fi for more accurate location services.”

Wi-Fi, along with GPS, Bluetooth Low Energy (BLE), cameras and Internet of Things sensors, is a core component of modern location services, and it may integrate with those other technologies for generating sophisticated analytics.

How Wi-Fi provides highly accurate location data

A device doesn’t have to be connected to the internet via Wi-Fi for it to broadcast its location to nearby access points (APs). Its Wi-Fi-derived location markers can then be used by applications that have been granted access to location services, such as those from retailers.

Here's how it all works on a more technical level:

• Wi-Fi APs continuously receive probe requests and IEEE 802.11 data frames, including a timestamp, from nearby wireless devices such as smartphones and tablets.
• Those devices transmit these markers to APs whether they’re logged on to the network in question or not, as long as Wi-Fi is enabled and an AP is within range.
• Probes are sent one or more times per minute, depending on if the screen is off or on. As such, location data is regularly refreshed, especially when users are active on devices.
• Via software, a server can process these locations and timestamps from APs and generate data about where their device users are moving in a designated area.
• An API can export this information to key business applications such as CRMs and warehousing platforms and also put it into visual formats like graphs and heatmaps.
• All of this happens in the context of a larger platform such as a managed Wi-Fi system, which the service provider installs, oversees and updates for maximum convenience.

Retailers in particular can integrate such location analytics into their operations to gain valuable insights into customer behavior.

For example, a merchant may analyze this data to inform their strategies on matters such as staff management (i.e., where would team members be best deployed), merchandise layouts in stores and customer loyalty programs. The investment in Wi-Fi analytics can pay off in the form of more efficient store management as well as higher customer engagement.

According to MarketsandMarkets, the overall Wi-Fi analytics market was worth $5.3 billion but is projected to expand at a compound annual growth rate of 26% between 2019 and 2024, ultimately bringing its value to nearly $17 billion. Retailers are helping drive this growth as they incorporate Wi-Fi location analytics more deeply into their stores.

The major use cases for Wi-Fi location analytics in retail

 Knowing how customers move through stores has always been important in retail.

Are people consistently turning in a certain direction upon entering a retail outlet and in turn missing merchandise that is displayed elsewhere? Or are they going to areas where few or staff members are likely to be nearby to provide assistance?

Wi-Fi analytics can provide answers to these questions and many others. Let’s explore some of their main use cases in retail today.

1. Understanding store capture rate

The capture rate for a store is the percentage of all pedestrians in a mall or on a street that actually enters that store. A low capture rate is an indicator that it is struggling to entice customers through the doors.

Wi-Fi location analytics enable granular tracking of nearby pedestrian traffic, for more accurate calculation of overall capture rate:

• A managed Wi-Fi solution with built-in analytics can track the signal strength of devices near the store entrance.
• Using this information, it can then segment devices into a “passerby area” and a “visitor area,” based on low and high signal strength, respectively.
• At the same time, the managed Wi-Fi platform can also keep tabs on time spent in a location, to see if someone is passing by (just one short connection to the AP) or engaging (multiple connections over time).

It all adds up to a better understanding of how many people are entering the store, and for how long. Combining this Wi-Fi data with camera analytics provides an even fuller picture of capture rate and if a retailer should modify its strategy for attracting customers.

2. Determining staffing distribution and levels

In a 2019 survey from REPL Group, 70% of retail workers said that the checkout counter — where many of them were stationed — was no longer the section of the store most important to customer retention or value generation. Moreover, these employees felt like there wasn’t enough room to perform value-added activities, as a result of inefficient staffing.

But where exactly would it best to position workers in a store, and at what staffing levels? Wi-Fi location analytics can provide reliable answers here, by helping retailers visualize traffic patterns based on AP data.

The Telesystem managed Wi-Fi solution can aggregate data from Wi-Fi-enabled devices, regardless of their connection status to the in-store Wi-Fi network, and use it to create a heatmap of store traffic. This visualization in turn is useful for seeing the most common dwell areas and then cross-referencing them with where staff are deployed.

If a certain sector is being heavily visited but has few employees in or near it, workers can be redistributed. Alternatively, staffing levels can be altered to align with how shoppers are moving through the premises.

3. Improved offers and rewards

Wi-Fi location analytics let retailers get a clearer sense of the specific areas and products that customers are looking at, and integrate that data into their CRMs. Accordingly, they can tailor their promotional offers and loyalty program incentives more precisely than if they did not factor in location at all.

Some of the possibilities here include:

• Targeted promotions: Is a particular device user repeatedly visiting one segment of a store, based on their Wi-Fi transmissions? If so, it might make sense to sense a targeted notification to them about the items in that area, via app, email and/or text message.
• Loyalty campaigns: Similarly, repeat visitors or ones with long dwell times may be promising targets for loyalty campaigns that can incentivize signups by offering savings on, and rewards for, their purchases.
• Site-specific offers: Retailers with multiple sites can use location data to determine if a device is a good candidate for offers that are tied to a particular outlet. This level of location awareness can make customers feel like the retailer understands them in a way that a store offering a one-size-fits-all promotion or an online sale wouldn’t.

Making the most of location analytics with managed Wi-Fi

Telesystem managed Wi-Fi uses a cloud-based architecture to gather, aggregate and deliver location analytics that are easy to integrate into traditional CRMs via our API. The real-time data from our solution also supports the evolution of customer engagement initiatives, through superior understanding of traffic patterns and shopping preferences.

To learn more, check out our managed Wi-Fi solution page or contact a member of our team directly!