At an indoor shopping mall in downtown San Francisco recently, a few developers from a startup called IndoorAtlas walked around several stores using a smartphone as their guide.
Aaron Liao, the company’s “director of developer evangelism,” carried an iPhone like a compass, as if he were lost in the woods. Following a blue dot and a path outlined on the screen, Liao and a group went into Bloomingdale’s, where he found the watches he wanted.
Then, a promotion popped up on the screen from Godiva chocolates. We trooped over to Godiva and got a little box of chocolates after Liao showed the salesperson the promo code on his phone.
The indoor positioning system IndoorAtlas was demonstrating is the company’s bet to make a mark in the tough arena of retailing and indoor navigation, which are converging as retailers experiment with technologies to combat online shopping and “show-rooming.” The sector is fragmented with a host of different location-based technologies that hope to garner consumer attention by sending them offers, coupons or other options while they are in proximity of a product in a store.
“The same way that the best websites offer some of the top attributes of physical stores, the best stores can behave like websites: making recommendations, offering special deals, and giving access to ratings, reviews, and detailed product information,” said Liza Kindred, founder of Third Wave Fashion in New York and author of “How We Buy Now, the Third Wave of Commerce.”
Beacons have been one of many weapons retailers are trying amid the advent of show-rooming — consumers looking up a product they see in a store on their phones, and often buying it at a lower price online. Beacons are low-powered radio transmitters that send signals via Bluetooth to smartphones in close proximity, using Apple Inc.’s AAPL, -1.66% iBeacon or other similar apps downloaded on users’ smartphones. Some stores, such as Canadian department store chain Hudson Bay Co. HBC, -2.32% are experimenting with iBeacon in some of its stores.
The use of beacons among consumers, though, is not as popular as some have estimated, primarily because the consumer has to willingly download an app and agree to receive messages and offers, and to be tracked by the retailer.
“That’s due in part to the fact that we’re trying to teach them new behaviors,” Kindred said.
Adam Silverman, an analyst at Forrester Research, said that customers who are looking for something in a store find it easier to just ask a sales associate, rather than installing an app.
“Although it makes sense on paper, the customer hasn’t been fully engaged in some of these beacon-based technologies, mainly because it doesn’t make their shopping easier, or more engaging,” Silverman said.
The indoor positioning system developed by IndoorAtlas solves a hardware problem, but not the software issue, as users still have to download an app. Retailers, though, do not have to install beacons, routers and radio access points for WiFi and Bluetooth, and still receive precise geographical coordinates. Using the compass in smartphones to detect anomalies in the earth’s magnetic field, IndoorAtlas can pinpoint locations with an accuracy of one to two meters using an existing WiFi infrastructure.
“It enables you to build these kind of Google Maps for indoors, for shopping malls, airports, campuses, and people can use the apps to discover what is around them,” said Janne Haverinen, IndoorAtlas’s chief executive and founder. Haverinen spun the company out of the University of Oulu in Finland in 2012, where he was an acting professor and researcher.
But just as Google Inc. GOOG, -2.27% sends out cars all over the world to create its digital Street View service, IndoorAtlas and the developers who use its platform need to create digital maps for any indoor spaces for navigation.