Location-aware customer service may bring the benefits of ecommerce to the physical world

Thanks to GPS-enabled smartphones and status updates on social networks, it is now not uncommon for people to broadcast their precise whereabouts to the world at large at regular intervals.

And while exploiting that information commercially might seem sinister to some, retailers in the US are already making use of customers’ location data thanks to a service called ShopKick.

ShopKick offers consumers discounts in exchange for granting its partners (which include Target, BestBuy and Macy’s) permission to detect their phones when they are in one of their stores.

This kind of service has two benefits for the retailer. Firstly, as Altimeter Group’s Susan Etlinger explains, it allows them to find out more about their customers’ preferences and tastes: “Retailers have an incredible treasure trove of information about their customers when they’re online, but they don’t have that in store. With services like ShopKick, the retailer gets a stream of data about a shopper that is similar to what they get online.”

Secondly, it opens a channel through which to offer customers personally tailored offers just when they are considering a purchase.

“Using these services in combination with analytics, you could make targeted offers to customers through their smartphone while they are in your shop,” says Tony Morgan, chief innovation officer for IBM’s outsourcing division, which is working with a number of UK retailers on ‘location aware’ projects.

The success of this kind of service relies on consumer uptake. ShopKick said it had 750,000 users as of February 2011, just five months after launch. This is not proof the technology will go mainstream, but shows that some at least people are happy for retailers to know when they are in store.

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