5 Things You Didn’t Know Free Wi-Fi Could Do for Your Business
Installing free Wi-Fi in a retail establishment brings the potential for valuable customer data and higher conversion rates for purchases.
For years, retailers such as Panera Bread, Staples, and Starbucks have been offering free Wi-Fi to customers in an attempt to get them to stick around in their stores. Sure enough, experts say that offering in-store data provides vital benefits to businesses that they may not have previously enjoyed. This includes data from the comparison shopping that customers do in-store or information on personal preferences they provide when logging in to a free Wi-Fi service. But before you start collecting data from customer sessions, you’ll need to have a user agreement in place to have customers opt in to be tracked.
“The rules are that you have to opt in to being tracked in the retail store with your device,” said Greg Buzek, founder and president of research firm IHL Group. “You can’t be tracked by name or by person unless you opt in, in some manner.”
The data shows that you have a good chance at having customers opt in to provide data over a Wi-Fi network. Although free public Wi-Fi can present security threats from hackers, 81 percent of people connect to these networks according to a survey report from OWI Labs, a division of market intelligence and strategy firm One World Identity. OWI Labs had partnered with Lucid to survey individuals in the US, France, and Germany about their use of public Wi-Fi networks. In addition, according to IHL Group, 58 percent of retailers plan to use in-store Wi-Fi to track customers and provide a personalized experience.
“Wi-Fi is pretty much a necessity at this point,” said Dan Rasmussen, Senior Vice President for Enterprise Business at Hughes Network Systems, which offers equipment such as firewalls and Wi-Fi access points. “If I’m going to walk into an establishment, I’m going to assume that Wi-Fi is there.”
There’s valuable data that retailers can gain by collecting analytics from customers’ Wi-Fi connections. Retailers may require data for both their brick-and-mortar businesses as well as their e-commerce operations. Here we explore five things that retailers may not know they can get out of free Wi-Fi.
Personalize Deals Based on Customer Interest
From the traffic patterns in a store gained through Wi-Fi analytics, retailers can send coupons via email, text messages, or a store’s mobile application, based on the customers’ preferences. In addition, you can send coupon deals to customers who travel down the produce aisle compared with the bread aisle.
“You can watch the behavior of individual customers as they go through the store,” Buzek said. “Then, based on that, you can provide them incentives to go through another row or another lane on future trips.”
By using Wi-Fi analytics, you can also offer customer rewards based on the products a customer is looking at in a store. The rewards can be sent in real-time or at a later date, Buzek noted. Geolocation data from a phone’s GPS functionality also plays a part in this capability.
When customers log in to the Wi-Fi by using social media credentials, the retailer can collect demographic information, such as whether they’re male or female and what their shopping patterns are. This is especially true if the customer downloads the retailer’s app, Rasmussen noted. Once a retailer learns about the customer’s preferences, the store can push a discount and thank the patron for buying their tenth grande cafe latte of the month, Rasmussen said.
“I can push the customer a quick ad that provides a discount,” Rasmussen said. “It’s that engagement that’s kind of the holy grail of what people are looking for, because now I know exactly what [the customer] has done. I have rewarded the behavior, and I’m getting [the shopper] into the establishment on a repeatable basis based on loyalty.”
Reprice Products Based on Customer Comparisons
A key task for which customers in retail stores use free Wi-Fi is to comparison shop for products. Retailers can track the websites customers visit and can compare the pricing for products on those websites with what they have in the store. If customers go to Best Buy to shop for external hard drives or wireless routers, such as the Asus ROG Rapture GT-AC5300, then they can log on to the free Wi-Fi and comparison shop at other retailers, such as Amazon. The retailer can see which webpages customers are visiting, how long they stay on those webpages, and what prices their closest competitors are offering. The stores can then adjust their pricing strategies accordingly. Not only is this data valuable for ongoing marketing campaigns, but over time this visibility also helps retailers better understand the fluctuating relationship between pricing and loyalty.
“What they’re able to do is better isolate who the customers are that are loyal to them, and those customers who are only price-oriented or very price-sensitive,” Buzek said. “There’s going to be a certain part of the population that’s just going to go for the best price; they’ll come in and ask all of the questions and then buy it elsewhere. Then there’s others that will feel guilty about coming in and asking you all of the questions and not buying it from you.”
Track Store Traffic Patterns
By using smart analytics to monitor customers’ free Wi-Fi activity, you can get a sense of what marketers call “dwell time.” This is where store operators use traffic analytics (often proprietary to specific network monitoring or WiFi marketing tools) to see how long customers linger in a certain section of a store. For example, if you have an end cap display of skin cream at the end of an aisle, you can gain data on whether customers purchased skin cream after they linger in that area.
This data helps you evaluate the effectiveness of store displays. You can also compare dwell time in a certain aisle with the type of products that customers might put in their shopping cart.
“Dwell time tends to be more valuable to retail stores [than coffee shops],” Rasmussen explained. “For example, shoppers in a midsize retailer may come in and browse for a while. There could be a mechanism to send them a coupon or special offer after a certain amount of time in the store to spur a purchase.”
Retailers can use heat maps to show where customers dwell. A heat map is a graphical representation in which colors illustrate the values being studied. These maps can pull data from customer Wi-Fi activity. Although only 21 percent of retailers are using heat maps now, 51 percent plan to use them within the next two years, according to IHL Group. Tracking store traffic patterns using Wi-Fi is a location-based marketing strategy, and 58 percent of retailers are increasing their investment in this area, IHL Group revealed.
This data can be a big help with product assortment around the store and space planning. If customers dwell but don’t purchase anything, retailers can then take a look at the reasons why, like evaluating if a price is too high. Along with dwell time, retailers can monitor footfall patterns, which measures the number of people entering a store.
Some of these measurements are available to retailers even if customers don’t fully log in to the store’s Wi-Fi. If customer devices are configured to actively scan for available access points (APs), then those APs can simply pick up the user’s frame and perform basic tracking, though they won’t have access to the more detailed personal information you’d get with a full login. However, even basic tracking is enough to build some valuable heat maps for store operators.
“[Heat maps and location data] take a little more analytical thought and the analytics have to be pretty thorough, but it’s an area of optimizing your space that I don’t think a lot of smaller retailers think about,” Rasmussen said. “Your bigger retailers are now leveraging those tools to understand how people come through so they can optimize their space. But it hasn’t moved into the small to midsize business (SMB) market just yet.”
In addition to shopping, Wi-Fi analytics in retail aids the staffing efforts of human resources (HR) departments. If retailers see people entering the stores and surfing on their Wi-Fi on the weekend versus on a Tuesday, then they’ll know to add more workers on that day of the week. As mentioned earlier, heat maps show retailers how many customers are in the store and where they’re located.
“Because [they track the] path as well as the numbers, you can see where people are at what times,” Buzek said. “For example, does the deli need more staffing?”
Rasmussen noted that the Wi-Fi data is particularly valuable in larger retail stores with many aisles. Retailers can monitor traffic by day of week or time of day to help them decide on staffing needs.
“When retailers know their peak times, they know when they need more staff,” Rasmussen said. “Over time, the data becomes even more valuable as businesses record month-over-month and year-over-year fluctuations.”
Integrate Contact Data With Your CRM Software
Once you gain the contact information from people logging in to your Wi-Fi network, you can add the contacts into your customer relationship management (CRM) software. CRM applications let you collect customers’ contact information and keep track of how you know them and the history of your interactions. Each time customers opt in to be tracked when they log in to Wi-Fi, you’ll be able to import this data into your CRM software. Products such as Apptivo CRM and Zoho CRM can capture leads from websites.
To get customers to agree to the data collection or to enter their email address on a Wi-Fi log-in page, retailers should offer something in exchange. An incentive can include a coupon deal, valuable blog content in email newsletters, or rewards in a loyalty app, according to Rasmussen.
“The best way to link data from free Wi-Fi to a customer database is by using a loyalty app,” Rasmussen said. “When a customer opts into a loyalty program, they understand that the retailer will save certain information such as a name, address, phone, birthday, and email, as well as sizes and preferences, previous purchases, and so on. With this kind of data already collected, it’s easy for a retailer to link an email that a customer uses to access in-store Wi-Fi back to the customer record.”
In exchange for a customer’s contact data, retailers should go even further than offering promotions and offer access to an exclusive area in a store or a VIP checkout line, according to Rajashree Ramakrishnan, head of the Retail Solutions Group at Tata Consultancy Services (TCS).
“Many retailers are starting to do that now. They are trying to curate a consumer journey for a tier-one loyal customer versus somebody who’s just walked in anonymously,” Ramakrishnan said. “Are there areas in the store that only I’m allowed to go? Are there previews that only I’m allowed to get? Will I get a personal shopping assistant just because I’m a gold member? What is it that happens to me because I tell you who I am?” she asked. “To me, that’s very important.”
Track Conversion Rates
A difference between the data retailers collect from a point-of-sale (POS) solution and that of Wi-Fi analytics is that Wi-Fi can let businesses track conversion rates. With POS software, a store tracks purchases, but when monitoring Wi-Fi data, a retailer can track customers that did not make a purchase, Rasmussen noted.
“From a conversion rate, if I had 10 people walk in the door, then the POS [software] may tell me about the two people that actually bought something,” Rasmussen said. “The Wi-Fi will tell me about the eight people that came in, checked things out, potentially comparison shopped, and then walked out of the door without completing a transaction.”
Retailers can use the free Wi-Fi connections to push those conversions up. If a couple goes shopping together one holiday weekend, one person may be looking at clothes while the other is sitting in a chair surfing the web using the free Wi-Fi. The person not actively shopping might get motivated to shop after getting pushed a coupon for clothes of that shopper’s taste.
“That’s an opportunity to present a coupon to me — something that may spark me…to look for my own stuff, [telling myself that] ‘Oh, I can get 20 percent off a shirt for myself,’” Rasmussen said. “It’s an opportunity potentially to get better conversion out of somebody who’s walked into your establishment.”
A potential obstacle to collecting Wi-Fi data is customers’ use of a virtual private network (VPN), particularly if they’re doing serious work in a coffee shop. However, that won’t eliminate all opportunities for data collecting, Rasmussen noted.
“If they have a VPN, I may not see the [detailed] traffic,” Rasmussen said. “But I can still see that this person was connected, how long [he or she] dwelled, and if [he or she] stayed in a particular area or not.”
So, if you’re a retailer, offering free Wi-Fi can be a very enlightening move and one well worth the technology investment. While it’s still more valuable to large retail outlets with lots of floor space, even small retailers can get some benefit and forge closer relationships with their customers as a result.
Originally published at https://www.pcmag.com on August 13, 2019.
