Connecting to retail’s future

Free Wi-Fi in-store allowing consumers to check rival prices while looking at physical products is not without its risks. However, it allows stores to drive sales by collecting data and sending targeted messages to customers.

foyles
Why Wi-Fi: Free data streams give Foyles (above) and HMV (below left) and opportunity to collect customer information

Despite widespread enthusiasm for mobile commerce, from both consumers and retailers, there has been a significant fly in the ointment to deter its wider uptake. Even using the latest smartphones, it can be something of a gamble whether shoppers achieve optimum connectivity when they are on the move.

Now retailers and property owners are taking the initiative by installing Wi-Fi networks, free for customers to use, in their buildings. And they are banking on using the systems to provide additional content and services to shoppers, who can have a better shopping experience in return for sharing information with the retailers. Shops themselves can also benefit – HMV says that just a 1 per cent improvement in the number of people engaging with the brand using wifi will make a sales difference.

The objective is not to simply provide a way for consumers to benefit from easy online access to rival prices, while checking out physical products in their local store but to add to the shopping experience in a mutually beneficial way.

Free customer Wi-Fi

hmv

Retailers are under no illusion that simply offering free Wi-Fi will attract more shoppers into their stores. “The reason most people are in our stores is that they want in some way to experience entertainment. Frankly, you can walk off the street and go to a coffee shop and get free Wi-Fi in pretty much every one of them now,” says HMV marketing and e-commerce director Mark Hodgkinson. “This is all about providing people with a much bigger entertainment experience than they could get just by being in-store without having access to that.”

The chain’s new Cambridge store will be the first to have free customer Wi-Fi throughout, a facility that is to be extended across the entire store portfolio. The service had previously been restricted to technology desks, where it was available to let customers try out the hardware on sale. “This will be fully open Wi-Fi and we will give people a dwell space. They can sit and have a coffee, they can use some of the tech that we have and they can use our Wi-Fi too. That is very much part of the journey we are on,” says Hodgkinson.

HMV plans to use this to find out more about its customers and to target messages to them more effectively. Like generations of music stores, HMV benefits from a constant stream of browsing customers and it is hoping that Wi-Fi will help to convert some of them to buyers.

Engaging with browsers

“As a retailer, we are not short of footfall but what we don’t do is actively engage with those customers when they are in our stores. Some of them are in there to purchase, others might be doing some research, making a price comparison, they could be doing a range of different things.

“At the moment we only know about those customers who purchase with us and are a member of our current loyalty scheme,” says Hodgkinson.

The aim for HMV is to find out what its customers are interested in from an entertainment perspective, for example looking at product ratings.

Combining a Wi-Fi network with relevant messages can also help drive sales. This summer, Unilever worked with O2 to drive people to outlets that sold its ice cream brand Wall’s – but only when the weather got to a certain temperature (see box). This helped the brand to track how effective its advertising was in certain areas.

Collecting data

HMV will also collect data on customers once they have registered to use its Wi-Fi. After they have done so, they will be given messages and options from the moment they next enter an HMV branch. The network will be branded ‘My HMV’ to emphasise the personal nature of the interaction.

As well as offering tailored promotions for products, My HMV will let customers know of public appearances at stores by artists they like and give them the opportunity to order forthcoming releases. “The more they tell us about themselves, the more relevant and valuable what they get back from us is. It’s not an invasive thing, if they are reluctant to say who they are and what games console they have got they don’t have to – but if they do we can tell them about the latest PS3 games,” says Hodgkinson.

But the retail sector has yet to come to an agreed standard as to how data, and in what quantity it will be gathered from shoppers using Wi-Fi networks. The cafe at Foyles bookshop has offered the service for some years and the company is looking to extend the facility throughout its shops, confirms head of marketing Miriam Robinson. But it will focus on the cultural interaction such a facility could provide rather than using it to amass data on customers.

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Thermal protection: Unilever and O2’s Wi-Fi partnership ensured customers could be reminded of the joy of ice cream during hot weather

“People have come to use the cafe as an unofficial ‘everything’. It’s a work place, it’s a meeting place, it’s a social space. So what we have tried to do is make an environment that is conducive to both work and leisure. But it’s easy to see that people would not dwell in the same way if they couldn’t do work there and if they couldn’t connect with their friends there. So Wi-Fi is integral in that sense,” she says.

“We feel very strongly that in order to survive as booksellers, we need to be a social and cultural space. And that’s what literature is for and we need to emulate that in every way, shape or form even if there is not a direct sales link,” says Robinson, who concedes that there can be an element of risk to installing Wi-Fi in stores.

“You do have a concern, a problem for bookshops in particular, where if you have Wi-Fi in-store people will simply scan the product [with a smartphone] and find the lowest price online. That’s very much an issue. The flipside is that, while people seem to see the internet as the ultimate in convenience, there is not anything that is really more convenient than standing in front of a bookshelf, finding the book you want and being able to purchase it there and then.”

Retaining trust

Being able to browse the internet in-store will also alert people to Foyles’ online site – which has 17 million titles – more than could ever be found in a shop, Robinson points out.

The store is working hard to reproduce the ‘discoverability’ that browsing in a bookshop or asking a bookseller for advice can bring. Its website hosts author Q&As and ‘curated by’ sections and these give clues as to future content that Wi-Fi users might be nudged gently towards.

“We have become relatively well acquainted with our customers as it is, so how you preserve that flow of information, which is based deeply on trust, in an online space is a big challenge and it’s one we are working on.

“I never want to greedily grab my customer’s data just because they are using our Wi-Fi. Again, in terms of the future of bricks and mortar, trust in a brand is incredibly important. There is literally no point to go into a place if you don’t trust them anymore,” says Robinson.

A difficult balance

The Interactive Media in Retail Group (IMRG) takes the line that many consumers view retailers as being ‘omnichannel’ institutions, whether or not the retailers actually live up to that billing. But IMRG head of communications Andy Mulcahy says the amount of information retailers require to let shoppers access their networks has to show some sense of fairness: “You want to make sure you are not prying into what they are doing, but at the same time you need to get something out of it. From a tracking perspective, a retailer is going to want to know if somebody has been online and then gone into their shop. It’s a difficult balance.”

Whether customers are prepared to accept the conditions that retailers offer, or not, will become clear fairly quickly, says Mulcahy. He adds that that the quality of extra benefits that the retailers offer will be key. “When things are really useful the rate of adoption is likely to really pick up,” he says.

NMA Explains: In-store Wi-Fi

Ronan Shields

Ronan Shields

In-store Wifi effectively lets retailers ‘digitise’ their bricks and mortar outlets. By using it, they can gain insight into a customer’s mindset as they go through a store.

But retailers need to make sure their customers are aware of the facility and adequately articulate the value trade-off involved with such a measure: how their data will be used.

Irresponsible use of the data pulled from using in-store Wifi networks such as sharing users’ phone numbers or what products they have been browsing with third parties could result in a customer backlash.

But what this also offers retailers is the opportunity to reposition their brand and business in response to the pressure posed by online retailers.

Centre-wide Wi-Fi

Westfield Stratford City in London offers free customer Wi-Fi throughout, was in the unique position of being the first shopping centre to act as the physical gateway to an Olympic Games.

With no precedent, it was virtually impossible to predict how many people might log on to the new Wi-Fi network. Figures available half way through the Games showed that 95,000 people had already done so.

“When we were building Westfield Stratford City we wanted to make sure the centre would be very well connected with the existing infrastructure,” says Westfield UK general manager of marketing Myf Ryan. “We provide that through things like interactive directories and the digital ‘find my car’ app. We have close to 900 Wi-Fi access points within the centre. And we also boosted the signal in the run up to the games time because we knew that we would have such a large influx of people who were going to be using their mobile devices to communicate, take photos and access Wi-Fi.”

A further acknowledgement of that demand has been recognised in the provision of free mobile phone charging points in Westfield centres. “They only came in prior to the Olympic Games. They are used pretty consistently throughout the day, as you can imagine. The plan will be to put them into the centres long term as an additional customer service,” says Ryan.

“One of the interesting things is that customers expect online services throughout our centres,” adds Ryan. “That’s always very much at the forefront of our thinking. We also know from independent global research that shoppers use a whole raft of digital technology to research and compare products, both when they are in-centre and when they are out of centre.

“So from our perspective, in terms of the digital innovation we put in-centre through free Wi-Fi and mobile phone charging points, interactive directories, find my car, it’s all about making the shopping experience that much more pleasurable and much easier for our shoppers.”

Within a shopping centre, it may prove far more convenient for customers to log on to one network, rather than to swap between different ones in each store, though retailers will not be in control of what data is requested from those logging on.

Cool solution for hot weather

solero

The hot August weather saw location-based and contextual marketing techniques used in tandem in a partnership between Unilever brand Wall’s Ice Cream and O2’s Wi-Fi Metro. Brands such as Magnum and Cornetto ‘owned’ all media placements on the welcome pages of smartphones on the O2 network, which is free to use in busy areas of central London.

A new concept in mobile messaging, ‘thermal targeted proximity messaging’, meant advertising messages were only triggered when the local weather temperature reached a set point. Consumers were sent messages saying ‘if ice cream makes you happy, click here’ which went through to a map showing the nearest outlets where they could buy Wall’s products.

Seven London squares and shopping areas benefit from the free Wi-Fi network, the result of a collaboration between Westminster City Council, the Royal Borough of Kensington & Chelsea and O2. It was launched in summer 2012.

O2 Media managing director Claire Valoti says: “It is great to see a company such as Unilever and its brand Wall’s Ice Cream exploring new ways of reaching the consumer. The partnership integrates O2 Media and O2 Wi-Fi to deliver something that consumers love – free Wi-Fi – but places a Wall’s Ice Cream right in their path when the sun shines. We have big plans for thermal messaging because of the increased accuracy in terms of delivering the right message to the right consumer and the ability to message a consumer based on the British weather, something we know many of the brands we work with are interested in.”

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