Philips turns LEDs into an indoor GPS for supermarkets

Philips believes that the days of endlessly roaming around a store looking for the right kind of balsamic vinegar may soon be at an end. The company’s lighting division has developed an indoor navigation system that enables your smartphone to direct you straight towards the Oils & Vinegars (Specialist) section. In addition, the technology helps to light everything up nice and bright, and save a bucketload of cash in the process.

Rather than using Bluetooth beacons, which others believe will being reliable indoor navigation for retail outlets, the company has swapped out the traditional lighting for banks of white LEDs above each aisle. Each bulb is equipped with visible light communication (VLC), enabling it to beam out a code that’s imperceptible to the human eye. When a user opens the corresponding smartphone app and holds it horizontally, the forward-facing camera reads the VLC. Once the software knows where you’re located, it’ll follow this overhead breadcrumb trail to get you where you need to go.

As you can see in the clip, the first supermarket to sign up to the project is France’s Carrefour, which is trialling the technology at its colossal hypermarket in Lille. In addition to providing hyperlocal indoor navigation, the company is also reporting that the tech has slashed its energy bills by 50 percent. Oh, and if you have any concerns that your movements are being tracked, the pair have already promised that the VLC system is entirely passive — so locals only have to worry about the national security forces.

P&G is widely considered to be a pioneer in shopper marketing, with former chief A.G. Lafley calling it “the first moment of truth.”

Shopper marketing may not be sexy, but it gets results. More evidence of this: Grey Group is setting up a new shopper marketing operation to work for client Procter & Gamble now that G2, the agency’s retail unit, is merging with OgilvyAction to create a bigger activation agency. The Grey launch underscores the importance of the retail discipline to mainstream agencies as something more than a tactical effort left to specialty shops.
Shopper marketing runs the gamut from displays, packaging and promotion to sales. It has been growing at more than 21 percent annually, according to Deloitte and the Grocery Manufacturers Association, with companies like P&G said to spend at least $500 million at point of purchase annually.

“There’s growing recognition that retail is the center of gravity in marketing. In all its manifestations, whether online, e-commerce, in-store or mobile, retail is in the center of everything a brand touches,” said Tim Manners, founder of retail marketing The Hub Magazine. “There’s also greater recognition of its potential as a marketing platform, not just a distribution channel. Retail is unique. It’s the one place where both sales and marketing happen at the same time.”

In the Hub’s newest annual ranking of the top 20 shopper marketing agencies and brands, it noted that marketers are placing more importance on the practice when ranking agencies. “Shopper marketing concept and understanding” rose to the No. 1 criteria among agencies, up from No. 9 in 2012. Another change: P&G regained the top spot among brands, bypassing Unilever, which was ranked No. 1 last year.

P&G is widely considered to be a pioneer in shopper marketing, with former chief A.G. Lafley calling it “the first moment of truth.”

Dina Howell, worldwide chief executive of Saatchi & Saatchi X, was the leading architect of those initiatives at P&G. Her first project was for Walmart in 1997. The retailer was frustrated because 70 percent of moms’ baby purchases were for lower-margin diapers and formulas. Howell oversaw creation of the first baby center where infant products, previously dispersed through the store, were organized in one aisle.

“It quickly got results that showed moms lingered longer and spent more money. It was more profitable for retailers and better for the manufacturer because they were able to have more of a dialogue with these moms,” Howell said. “It changed the way marketing happens with shoppers. A marketing plan is not complete without understanding how a shopper shops. People are in their final throes of getting ready to spend money, and they are very open to new information.”

Selling at retail has become more than sales promotion. It’s become a necessary part of a brand’s efforts to gain share and build equity, proponents argue.
“P&G was the first company to get into it and view it as strategic marketing,” said Chris Hoyt, a former P&G exec, of consulting firm Hoyt & Co. “Shopper marketing is really marketing today. Sorry we still consider it as a separate discipline.”

We snoop to conquer

4-23-2013 12-38-47 PMSHOPPING online is a revealing act. Websites know what catches visitors’ fancy, how long they linger and where to find them when they leave. Traditional shopkeepers are blind by comparison. Who enters their stores and how they behave are mysteries, which are only partly solved when someone buys something. A click from a finger means more than one from a stiletto heel.

Bricks-and-mortar retailers would like to change that. Stacey Shulman, technology chief of American Apparel, a clothes chain, craves “the same type of analytics in-store as I can get online”. In many cases the equipment is already there: security cameras watch out for thieves and Wi-Fi networks pick up mobile-phone signals. A “furious amount” of testing is going on to see whether such technology can help retailers understand customers better and thus boost profits, says Anthony Mullen of Forrester Research.

Cameras rolling in the aisles

Just knowing how many shoppers cross the threshold, and when, can be useful. American Apparel’s store managers thought they were busiest when sales peaked. They were typically off by two hours. Now the retailer gathers traffic data from cameras mounted above the doors and feeds that into its staff-scheduling software. When crowds come, the shops now have enough salespeople to serve them. As a result, sales are up “across the board”.

Traffic-counting is already fairly common practice. ShopperTrak has been providing that service to stores for 20 years. A newer breed of service providers, such as RetailNext, American Apparel’s partner, and Tyco, whose roots are in security, encourages retail chains to harness in-store hardware for more exotic purposes. Crime-fighting cameras guess shoppers’ sex and age and draw “heat maps” showing how they move around a store.

Gordmans, a Midwestern department-store chain, discovered via video that goods at a particular display sold especially well. It changed the wares from home furnishings to higher-margin fashion items. Mannequins made by Almax, an Italian company, look back at customers with camera eyes, noting sex, age and ethnicity. One noticed a contingent of Asian shoppers arriving at a shop at the same time every day, prompting the manager to post Asian salespeople to receive them.

Tracking mobile phones yields different nuggets: what share of passers-by enters a store, how many leave immediately (the “bounce rate”) and how many are repeat customers. At least half a dozen retailers are experimenting with tracking employees’ mobile phones to find out, for example, how long it takes to retrieve a pair of shoes from the stockroom.

Retailers need every advantage they can muster to cope with price-chopping websites and skittish rich-world consumers. But they risk giving shoppers the creeps. Pam Dixon of the World Privacy Forum in San Diego thinks using cameras for non-security ends “violates some very fundamental expectations and rights”. She fears that retailers will profile casual browsers by combining in-store tracking with data from outside sources. The risk will rise as the technology improves.

“There’s no expectation of privacy when you go into a mall,” retorts one shopper-monitoring executive. A better answer is that retailers like American Apparel are analysing groups, not identifying individuals. Cameras set up to do anything fancier than traffic-counting are confined to a few test stores. Mobile-phone trackers identify phones, not their owners, says Will Smith of Euclid Analytics. Still, Euclid recommends telling customers that tracking is going on. “Companies that succeed in this space are companies that address privacy correctly,” he says.