Mobile Location Analytics: Changing the Game for Brick and Mortar Retail

A technology known as "mobile location analytics" gives brick and mortar retailers the ability to understand shopper behavior far beyond tracking credit card purchases and watching security camera footage.

November 2, 2015

For brick-and-mortar retailers, smart phones have taken on an entirely new role in customers’ shopping experiences. A technology known as "mobile location analytics" ("MLA") or sometimes, "indoor analytics," gives brick and mortar retailers the ability to understand shopper behavior far beyond tracking credit card purchases and watching security camera footage. Instead, MLA allows retailers to track and analyze shopper behavior in ways previously available only in e-commerce. The technology most widely-used by retailers utilizes the unique identifier known as a MAC address, which is found in mobile devices with Wi-Fi or Bluetooth capabilities. Whenever these capabilities are enabled, the device constantly broadcasts its MAC address, allowing sensors installed in stores and malls to track the device’s location. The signals reveal customer behavior such as the paths traveled in the store, length of a store visit, and displays on which a customer spends the most time. This information allows retailers to track the effectiveness of signage, store layout, and marketing strategies. If enough data points are gathered, it may even be possible to infer information about a customer’s gender or age.

Of course, all this information comes with its own set of privacy concerns, and the FTC has taken an interest. Consumers seem to be concerned as well: a survey of 1,000 consumers revealed that, "8 out of 10 shoppers do not want stores to track their movements via smartphone" and "nearly half (43%) of shoppers are less likely to shop at a favorable retailer if the brand implements a tracking program."1 It is not clear whether any of the 8 out of 10 are also shoppers who regularly post status updates to Facebook or take photos of their food for Instagram. Regardless, many retailers have taken steps to ensure privacy protection, including de-personalizing or "hashing" data immediately upon collecting it, complying with the MLA Code of Conduct, and providing an analytics opt-out or "do not track" website similar to the National Do Not Call Registry. 

So far, there seem to be two ways for a shopper to deal with MLA tracking: turn it off or embrace it. Turning the technology off is relatively straight-forward: because the MAC address is only broadcast when Wi-Fi or Bluetooth is enabled, simply turning these capabilities off allows a consumer to prevent tracking. Some retailers, however, have discovered a way to gather useful MLA data while improving their customers’ shopping experiences.

A great example comes from Illinois-based Neimann Foods, which has implemented MLA in all of its Country Market grocery stores and has invited its shoppers to download the myCountryMarket app. Using the app allows customers to have an ultra-personalized shopping experience through customer-specific offers, location-specific coupons, in-store maps, and sharable shopping lists, which are delivered to the customer’s smart phone while in the store. Inside the stores are beacons that use Bluetooth to connect with a shopper’s myCountryMarket app, allowing a shopper to visit the bakery and within seconds receive a coupon for cookies or visit the dairy section and instantly receive an offer on coffee creamer. This strategy is working: Country Market has reported positive results, including hundreds of new app downloads each week and approximately 15-20% growth week over week in shopper engagement.2 Although County Market has not publicly shared the lessons learned from the accumulated MLA data, it hard to imagine that the grocery chain has not learned quite a bit about its shoppers behaviors and preferences.

Whether a retailer uses a mobile app and offers coupons for cookies or silently tracks a shopper’s data, MLA will likely increase in importance as tool used by retailers to better understand consumer behavior. A survey of 288 senior marketing executives in the U.S. reveals that spending on marketing analytics is expected to increase from 6.7% to 11.1% of the total marketing budget.3 As retailers work to find ways to allay consumers’ privacy concerns, it is evident that whether shoppers choose to embrace or shun it,  MLA it isn’t going anywhere. It may just take some time to smooth out the wrinkles.

1 Soltani, supra note 6.

Id.

3 Maddox, supra note 13.

+ READ MORE - READ LESS

The articles on our website include some of the publications and papers authored by our attorneys, both before and after they joined our firm. The content of these articles should not be taken as legal advice. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views or official position of Robins Kaplan LLP.

Disclaimer

David Martinez

Partner

Pro Bono Chair, Los Angeles Office;
Member of the Firm's Diversity Committee
Member of Executive Board

Brittany Boren

Related Publications

May 24, 2022
Briefly: Seeking Fees and Costs While on Appeal
Eric Magnuson, Gregory Voshell - Minnesota Lawyer
May 19, 2022
11th Circ. Ban On Service Awards May Inhibit Class Actions
William Reiss, Dave Rochelson - Law360
May 13, 2022
Trademark Applications and the Murky Waters of Subject Matter Jurisdiction
David Martinez, Zac Cohen - Los Angeles & San Francisco Daily Journal
May 5, 2022
Antitrust Law As A Tool Against Privacy Abuses
Law 360 - William Reiss and Matthew Geyer
First Quarter
ANDA Litigation Settlements
GENERICally Speaking Hatch Waxman Bulletin
Back to Top