The New Frontier of Customer Data: Tracking Physical Location by Phone
There are those who greet every new development in customer data tracking with fear and animosity. They might not exactly be luddites, perhaps they love their smartphone and their Xbox 360, but they simply don’t like the idea of marketers knowing quite so much about them. These fears may have some reasonable foundation, and we might hold a debate about whether or not we have a right to privacy, but the fact is that privacy has gone out the window. Companies have a pretty good idea about who you are and what you like, and they’re going to create, advertise and market accordingly.
With that said, an emerging field known, as “physical analytics” should help local and online businesses alike to create and market their wares more effectively.
Physical analytics refers to tracking where your user has been and what they’ve been doing, at least as far as you can tell by looking at where their smartphone has been in use (although the concept has also been put to use in such creative ways as seeing how frequently a cat uses a scratching post). A display at a convenience store could see that you’ve just been working out and it might tell you exactly where to find the sports drinks and water, for instance. The list of reasons why this is exciting for marketers and why it should be intriguing for consumers are nearly identical. Consider:
Advertisers Will Have a Better Idea of What You Don’t Want
Somebody who just left a heavy metal concert probably isn’t interested in buying the new Miley Cyrus CD. By knowing where you’ve been and when, advertisers and stores can waste less of their time, and less of yours, pushing onto you stuff that you simply don’t want.
Local Businesses Can Refine Their Shelves
If you run a small grocery store and you see that you’re getting a lot of people from the nearby yoga studio, then data will show you that there’s a big overlap between consumers who do yoga and those who enjoy organic food, so you can start stocking more all-natural products. Knowing where your customers are coming from, figuratively speaking, has always been key to running a successful business, now it’s literally true, as well.
Setting Prices
Not everybody shops in their own neighborhood. When you see that your thrift store is catering to a big market of middle class hipsters who shop there for vintage fashion, you can start fishing out the scarcer pieces and offering them in a special section at a slightly higher markup. Likewise, you can offer a budget model of a popular product when you see that not every one of your customers comes from the wealthier neighborhoods that surround you. People who have money don’t mind paying more, those who don’t tend to be more value-savvy. When you know where your customers live and hang out, when you see where else they shop, you can price your wares and services according to their income and how much they’re willing to pay.
Are there shady applications for this kind of data tracking? Could a predatory lender track a customer and know exactly what they’re spending their money on? Could a liquor store identify whether someone has just been to an AA meeting, and inform the clerk to tell them about their half-off six packs? For dishonest businesses, every type of data has shady applications, but physical analytics are no different than any other: some businesses will use them to improve the lives of their customers, others will use them to simply squeeze a few extra bucks out of every transaction without regard to long-term cost.
“The strongest long-term strategy for most businesses is simply to make their customers happy,” said technology expert Jason Hope, “and physical analytics are just one more way for businesses to do just that.”
Marketing considerations aside, physical analytics are one of the strangest and most interesting new developments in the so-called Internet of things. When you get home and your dog can smell another dog on you, they might get jealous or they might get excited, but that instant communication of where you’ve been now belongs not only to pets, but buildings, stores, restaurants, even hotels and houses. Beyond consumer products and services, it should be fascinating to see how this plays out in the fields of security, health, housing and beyond.
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About Author: Amy Taylor is a business and technology writer. Amy began her career as a small business owner in Phoenix, AZ. She enjoys writing about business technology trends. When she isn’t writing, she enjoys hiking with her Alaskan Malamute, Sam.
