In-store localization: a new world for the retail industry


Iimagine going to a grocery store and instead of picking out the items you want and going to ask the staff for help or going to the cash register to pay, you get personalized information sent straight to your phone and pay all automatically when you go out. With the use of in-store location tracking, that future is getting closer. Let’s take a look at what a typical retail experience might look like in a few years and which companies you should pay attention to.

Types of in-store location tracking

Tracking technology is developing every day, but these are some of the most relevant today.


Geofencing involves communicating directly with customers who are within a certain geographic area, such as a store premises. This is achieved using GPS signals and Bluetooth radio waves, which organizations can now obtain easily from smartphones.

Customers simply need to log into the relevant app and give their consent for that app to take their data. Then the app sends out Bluetooth signals when it’s near “beacons” placed in the store (for example, on the dairy aisle), in addition to GPS data.

There are multiple uses. For one, customers can access useful data on where to find certain products instead of having to ask staff in addition to other queries. Meanwhile, retailers can collect consumer behavior data, send push notifications to customers based on their activity, and even share the information with their partners. This can be used to increase income.


As if it wasn’t futuristic enough for retailers to know exactly where a customer is in a store, stores can also add sensors. 3D optical sensors, which can be placed on site to give a 3D bird’s eye view up to 1,000 square feet around. Thus, retailers collect valuable data on a customer’s precise journey through a store.

A more affordable alternative are cross-beam sensors, which detect movement and send out a beam of light (which humans can’t see), letting them know who has entered or left a store. It doesn’t provide such sophisticated data, but it’s anonymous and can be useful for tracking simple metrics like the number of people visiting a store in a day.

Token-based analysis

An alternative to tracking people in a store is to track their carts. In this case, electronic devices known as tokens are spaces on shopping carts, which transmit data about a customer’s destination. Again, this provides more anonymity while improving understanding of consumer behavior, although the data is not as rich and may exclude some people.

Leading companies

At first glance, this technology may seem futuristic, but there are already many examples of its implementation. The most advanced example is Amazon (AMZN). The e-commerce giant launched Amazon Fresh (formerly Amazon Go) a few years ago and has been working to create a digitized and streamlined experience. Some stores are now offering a “Just Walk Out” service, which means customers can walk in and out without even having to checkout. This is made possible by sensors and trackers, which track what customers put in their cart and then charge them through their Amazon account.

Amazon also sells technology to other retailers.

But it’s far from the only retailer venturing into the world of in-store localization training. Walmart (WMT) conducted a trial using beacon technology to track customers’ movements and send them push notifications and discounts. Nisa and Target (TGT) have also tested the technology, so interested investors should keep an eye out for all of these retailers.

Will in-store location tracking be widespread?

Just because you can doesn’t mean you should. To determine if it is a good investment opportunity, you need to know its effectiveness as a sales and marketing technique.

On the one hand, it can provide customers with a better experience by reducing typical barriers (like queues or asking retailers for directions), which makes brick-and-mortar stores a rival for e-commerce. If the benefits to customers are clear enough, the trend is likely to grow and retailers implementing the technology will benefit.

The benefits for retailers are also crystal clear. As the data is collected, they can modify their stores in ways that encourage customers to spend as much as possible. For example, they may find that customers spend more when they place the snack aisle near the liquor aisle.

However, the convenience of location tracking for customers can be offset by concerns about consumer privacy, which could harm a retailer’s reputation and therefore their revenue. There are also practical concerns – the technology is expensive and tools like geofencing may require a way to differentiate employees from customers.

big brother is watching

The technology is here for a whole new kind of grocery shopping experience, and many big names in gaming are vying to capitalize on the potential of these tools. That could be retail’s saving grace, but investors may want to wait to see what customers at Amazon’s Just Walk Out stores taking their data think before betting everything on the innovations.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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