Article

Understanding the Mobile Location Analytics Code of Conduct

Retailers can comply with best practices for customer privacy while still ensuring the best holiday shopping experience.

November 26, 2013

By Jim Riesenbach, CEO, iInside

In October of this year, The Future of Privacy Forum (FPF), Senator Charles Schumer and our industry's leading location analytics companies joined forces and came to agreement on a practical code of conduct to help ensure consumer privacy and responsible data use for retail location analytics.

The agreement was as historic and innovative as the advanced retail technologies it is intended to address and clearly demonstrates that analytics companies, retailers and consumer advocates can work together in the best interests of the retail consumer. I am proud to have been a part of the committee that forged these best practices.

And, as we approach what promises to be another winning holiday season, the timing of this agreement could not be more ideal. From the perspective of the retailer, however, the obvious question is "Now what?" Retailers remain committed to ensuring the privacy of their customers, yet want to ensure they can properly gather and employ analytics for their primary purpose — to ensure the customer has the best possible shopping experience and is inclined to remain a loyal, returning shopper.

Managing the Code of Conduct

Let's begin with the steps retailers can take to best comply with the code of best practices and ensure the privacy of their customers.

Know the code. The complete code of best practices is available online from the Future of Privacy Forum: http://www.futureofprivacy.org/issues/smart-stores/. Retailers should ensure that all appropriate store personnel fully understand its requirements.

Make sure customers are informed. Retailers are asked to post conspicuous notices of their privacy practices via in-store signage and technology displays informing consumers about the collection and use of shopper analytics. These notices will also instruct shoppers where they can find additional information on the store's policies. Also, retailer websites should include significant detail about data collection policies and consumer options as described in the complete code of best practices.

Provide customers with options.Retailers should provide consumers with the ability to decline to have their mobile devices used to gather analytics services. This is done by providing consumers with clear, easy instructions for opting out of the service via the locations analytics provider's website.

Limit the data collected and how it is used. Location-based data can only be collected for business intelligence related to aggregated customer shopping patterns. Retailers cannot collect consumer data for purposes of determining eligibility for employment, credit, health care, insurance or related matters.

Ensure responsible data transfer. Any company that shares analytics with a third party should ensure that party contractually agrees to use that data in compliance with the code.

Limit data retention. Retailers should establish strict internal policies for how long data is retained and when it is deleted. It also helps to share this policy with customers.

Work with the location analytics provider. If retailers have questions about how best to ensure compliance with best practices, they should speak directly with their location analytics provider. We are well versed in these new guidelines and eager to work with retailers to ensure the best possible experience for their customers.

With adherence to the code established, retailers must also understand ways to optimize the locations analytics process in ways that best serve the needs of their customers. The incredibly rich data that can be extracted from location analytics can help ensure the best possible shopping experience for consumers during the busy holiday season and beyond.

And there are several applications for indoor location analytics that make the most sense for ensuring happy customers during the hectic holiday shopping season:

Align product mix. The right location analytics helps retailers identify where customers spend the greatest amount of time within the store and, ultimately, which products carry the greatest appeal for their customers. Careful analysis of this data will enable retailers to align the right mix of products with shopper interests.

Identify most appealing offers.Historical traffic data will measure the impact of special product offers made through external marketing and in-store campaigns. This data can serve as the playbook for determining what types of promotional strategies will maximize sales during the holidays.

Ensure staff availability and expertise.Traffic analyses will uncover peak shopping times or "power hours" when sales opportunities are at their greatest. This data helps retailers plan the ideal ratio of sales associates to shoppers at different times, as well as determine when the most experienced sales personnel should be on the floor to take the best possible care of shoppers ready to buy their products.

Reduce the time shoppers spend in line. The speed with which customers pass through the checkout queue or customer service counter can make or break the shopping experience. In some cases, it can negate the sale and negatively impact customer loyalty. Queue analytics enable retailers to predict when additional checkout lanes will be needed and ensure the "last mile" of the customer experience is a good one.

Create comfortable environments where customers want to be.When retailers understand in-store traffic patterns, they are able to eliminate areas of decreased flow, bottlenecks and other factors that can cause shopper frustration and impede the purchase process. Dwell time analyses indicates where customers tend to gather or linger, and where the store layout should ensure they have enough room to do so. This same data can also spot the best locations for a quiet place where customers can relax for a minute or two before getting on with their shopping.

Provide access to mobile location tools.Retailers with locations enabled, branded store apps can further improve the holiday shopping experience for their customers. "Find it" features, for example, can help shoppers use their smartphones to find their way to the products they seek. Additionally, location enabled push notifications can reach the customers with promotions when and where they are most effective.

As U.S. retailers prepare for the busiest shopping time of the year, it is imperative that we all work together to ensure that critical location-based analytics safeguard the privacy of consumers. At the same time, however, it is equally important that retailers take full advantage of the advanced technologies that make it possible to ensure holiday shoppers have easy access to the right products for the right price, at the right time with the right amount of support and service.

Let's make it a great holiday season.

Jim Riesenbach has served as CEO of iInside since 2012. In previous roles, he served as president and CEO of Autobytel Inc., senior vice president and GM of AOL's Search and Directory Division, and numerous senior leadership roles with AOL Inc. Prior to joining AOL in 1996, he spent six years with Comcast Corporation. Photo by Ayanami_No03.