Cisco Brings Location-Based Big Data To Shopping

Nov 15, 2012 (07:11 AM EST)

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Cisco on Thursday announced new location-based analytics technology intended to help retailers better understand consumer behavior and deliver more compelling experiences, including personalized advertising. The new offering is also designed to help businesses and institutions capitalize on existing infrastructure by transforming the Wi-Fi networks they already maintain into revenue-generating vehicles.

In an interview, Prashanth Shenoy, senior marketing manager for Cisco's Enterprise Wireless Network Group, said retailers could use the new tools to "replicate the online world in a venue world." That is, a website such as Amazon is able to intelligently engage customers because it can access information from those customers' respective purchase and browsing histories -- data to which physical stores have, at best, incomplete access. Cisco aims to change that, promising real-time analysis that could allow businesses to transmit a coupon for a given product to a user's smartphone in the same instant that the customer is investigating that product in the store.

The technology isn't limited to increasing the number of impulse buys, however. Shenoy said Cisco can empower businesses to make more surgical staffing decisions thanks to better tracking of traffic flows within a given space. He also described augmented reality applications as another potential attraction.

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The process relies on HotSpot 2.0 technology to seamlessly transition a user's cellular signal to Wi-Fi as soon as he or she enters a given location, such as a shopping mall. Shenoy said that many applications currently use GPS to provide location-based services but countered that such approaches only work well outdoors; because GPS can't reliably triangulate a user's position within indoor venues, a different tactic is required. He suggested that 4G technology could provide more extensive insights into user behavior once it's widely adopted but emphasized Wi-Fi as the primary bridge between Cisco's analytics engine and the smart devices customers carry.

He also stated that the process will be bolstered by a partnership with Qualcomm. The semiconductor giant will include a Cisco software client on its mobile handset chipsets that is designed to provide more accurate location data. Once the aforementioned bridge has been established, Shenoy said, anonymized information can be collected for aggregate statistics. This content could not only improve staffing efforts, but also help advertisers to refine their approach. It could be valuable to know, for example, where people tend to linger within a given space, or which marketing displays compel passersby to stop and investigate.

But this is only part of Cisco's vision. Depending on the services for which the user has opted, HotSpot 2.0 will also instantly authenticate the user's identity for given on-device apps. If utilities such as customer loyalty apps have already been activated, information from the user's profile, such as his or her purchase history, can be married with the location data, allowing personalized offers to be automatically deployed. Shenoy said Wi-Fi can be harnessed to pinpoint a person's whereabouts to within five meters, which is impressive but not precise enough for businesses to act on location alone. Knowing that a person is in a given sector of the mall is one thing, but knowing that the customer has previously expressed interest in products within that sector is another.

But there's a challenge, according to Shenoy; many business's apps have been downloaded by hundreds of thousands of people but are used relatively infrequently, with only 1% or 2% of the installed base qualifying as active users. The burden thus falls to developers, who will have access to a Cisco SDK, to use location-based data for more engrossing in-venue experiences. Shenoy suggested this could include anything from turn-by-turn directions to help people lost within particularly large spaces, such as casinos or airports, to augmented reality overlays that provide additional information and rich media content to supplement the in-person experience.

As an example, Shenoy said the Fernbank Museum of Natural History in Atlanta is rolling out a new app in conjunction with Cisco's announcement. Most museum attendees who want in-depth information have to rely on guided tours, or on pre-recorded presentations that they listen to on rented headsets. These approaches limit how the museum experience can unfold, but with the app, a visitor can roam as he or she pleases; as the visitor moves, the app can instantly discern where that visitor has gone and conjure related content.

The Fernbank app additionally offers customized capabilities based on individual preferences, allowing visitors to modify the experience on repeat visits. Additionally, it allows Fernbank to promote a given service, such as food or a gift store, as a user wanders into its proximity. As a result, said Shenoy, the Fernbank case illustrates how the free Wi-Fi networks that most venues already offer can be turned into marketing engines that promote services while also -- if the app developers do a good job -- enhancing the user experience.

If a user hasn't elected to activate services, the network can still collect anonymous data. Moreover, if the user has a smartphone equipped with Qualcomm's chip, an unobtrusive icon will appear on his or her device's screen. The icon is a link to not only useful information, such as venue maps or event schedules, but also to the apps that allow individual user profiles to be correlated to real-time location data. In this way, Cisco hopes to inspire more frequent use of these oft-neglected apps by letting developers turn them into interactive retail experiences that combine the best of the online world with the visceral immediacy of a physical location.

Recent acquisitions foretold that Cisco was planning something like this, particularly the September purchase of ThinkSmart. Shenoy confirmed that ThinkSmart tech has been integrated into Cisco's Mobility Services Engine (MSE), which is itself part of the company's recently unveiled Unified Access platform. MSE, he said, is doing all the behind-the-scenes work that makes the real-time analysis possible.

Cisco's announcement arrives with Black Friday, the biggest shopping day of the year, imminent. Although businesses won't have time to act on new location-based tools this year, such resources could play a role in the future. Currently, stores such as Best Buy have instituted price-matching policies to keep customers from fleeing to Amazon and other online vendors. Although this approach might work, it has been criticized as rife with opportunities to backfire, and for misunderstanding that sales are not always driven by pricing alone.

Some future combination of a specific user's shopping history and his or her current location could help retailers alleviate these concerns. Discounted prices could be intelligently offered on a user-specific basis, rather than a global one, for example. Better customer service could also result, either through improved understanding of customer behavior, or by simply merging the online world's information onslaught and rich media opportunities with the physical world's tactile experiences.

If any of this sounds more disquieting than intriguing, Cisco is sympathetic. The tech, after all, veers close to the mall scene in Minority Report, in which advertisements call out to shoppers by name, citing previous purchases and touting new sales. Shenoy said Cisco understands the privacy implications of location-based big data, and is also mindful that the enterprise could collapse if some businesses try to spam users with a barrage of unwanted offers. As a result, he said, all personalized services are opt-in, leaving ultimate control with the user. He said that the SDK and APIs, meanwhile, would guide developers toward successful integrations of the analytics engine -- though the ultimate execution still comes down to businesses and their respective app-builders.

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