Technology drives innovation, and for most retail companies, the “Transform or Die” motto still rings true. Retailers are always experimenting with the latest tech innovations to reshape the customer experience to alter their expectations both in physical stores and online.
But simply following every hot trend in the industry because of the fear of missing out (FOMO) is one of the most common mistakes retailers make when adopting emerging technologies.
The retailers who thrive in their respective markets are the ones who learn how to implement technologies that deliver the highest return on investment (ROI) from Gartner’s hype cycle for emerging technologies.
Augmented Reality (AR) technology has been used in the retail sector for years, mostly for selling items through a virtual try-before-you-buy model.
In the early 2000s, research was conducted using AR as an indoor navigation system. But at the time, it didn’t catch on due to different technological limitations.
Today, that’s changing. Advances in AR development driven by tech giants like Apple, Google, Microsoft, and others have made AR-based indoor navigation a desirable possibility for many retailers.
What Does This Mean for Retailers?
Brick and mortar retail stores are large. Shoppers often find themselves looking for new products they saw in advertisements and promotions. Real-time in-store navigation can have a profound impact on the customer experience by simplifying how customers find these products.
According to A.T. Kearney’s 2019 Consumer Retail Technology Survey, 61% of respondents said technology reducing the time spent navigating around a store would be most valuable.
Providing shoppers with an enhanced navigation experience contributes to brand loyalty. Combine that with a virtual catalog and personalized real-time offers based on data analytics—and indoor navigation technology can act as a value-added service that extends far beyond just helping lost customers.
In-store navigation solutions are not a novelty. Large retailers like Target, Walgreens, The Home Depot and others have leveraged various kinds of indoor navigation systems to improve the customer experience.
Indoor Navigation Technology Overview
Let’s do a quick recap of what navigation solutions are now available. The measure of success for a wayfinding app is determined by how timely and precisely a user can reach their final destination.
A user’s final position is dependent on the accuracy of their initial positioning. Most users are willing to accept an accuracy within five meters for outdoor navigation provided by a GPS module found in a smartphone or another navigation device.
Indoor navigation poses a unique set of challenges. GPS signals are often distorted indoors, which makes accurate positioning impossible. Retailers can choose from a variety of solutions to help them overcome this problem. These solutions include:
- Bluetooth low energy beacons
- Wi-Fi Positioning System (WPS)
- Visual Positioning Service (VPS)
- AR marker-based visual positioning
The biggest challenge retailers face is choosing which one is best for their unique situation.
Bluetooth Low Energy Beacons
The majority of early in-store navigation solutions for shopping malls were implemented using Bluetooth technology. This technology was initially sent to the market as a proximity marketing mission.
That explains why beacons are great at detecting the device of an approaching shopper and sending an offer or coupon code to their device. However, they do have limitations when they are required to determine the precise positioning of shoppers.
Beacon technology is a popular option that has seen adoption from many large organizations. A 2,000 beacon navigation solution was installed at Gatwick airport. Meanwhile, some US retailers like Mall of America and Target also decided to implement beacons.
Is This the Best Solution, and What Else Is Available?
Beacon-based indoor positioning reaches an average accuracy of five to six meters, which is acceptable when walking between gates at an airport but can lead to frustrating experiences when navigating a store.
Accuracy for these types of navigation systems relies on overall beacon density. The multilateration sets of three and more beacons must repeat every 10 to 20 meters to maintain accuracy.
According to Mike McNamara, Target’s CIO, an average-sized Target store has roughly 1,000 beacons. These beacons cost $10-20 per unit and require routine battery replacements. For a large indoor space, the combination of beacon quantity, combined with installation and maintenance efforts, can significantly increase a company’s operating costs.
The recent update of Bluetooth specifications to Bluetooth 5.1 is capable of bringing enhanced and more cost-effective navigation solutions to the market with a positioning accuracy of less than a meter. However, businesses that are currently using beacons for indoor navigation will need to update their hardware infrastructure to adopt the new protocol.
Wi-Fi Positioning System
The weaknesses of beacon-based indoor technology were one of the main reasons why some large airports decided to implement Wi-Fi positioning systems (WPS) instead. This solution uses the pre-existing Wi-Fi infrastructure and has an accuracy of 5 to 15 meters. However, the actual accuracy is dependent on many factors.
Apple introduced its Wi-Fi-based indoor mapping technology in 2014. Now, it’s seen mass deployment across major airports and shopping malls in almost 300 cities around the world throughout the United States, Europe and Australia.
Business owners provide layout information for their spaces, and visitors can pinpoint their position within the venue they walk through, manually selecting the floor that applies to them.
Since 2011, Google has mapped major airports, shopping malls and museums. However, this feature also requires manual selection of the floor by visitors. Like Apple, Google relies on Wi-Fi fingerprinting adjusted by mobile tower networks and accelerometers in mobile devices to help visitors navigate indoors.
Big changes are on the horizon for WPS technology. Just like Bluetooth 5.1, Wi-Fi positioning systems may see improved positioning accuracy of up to two meters when they adopt the new Wi-Fi RTT protocol.
This adoption will still take time due to the limitations of both consumers and infrastructure providers. Wi-Fi RTT is only supported by Android Pie devices, and technical infrastructure will require additional updates.
Visual Positioning Service
Google was one of the pioneers in developing Visual Positioning Systems (VPS). This platform is powered by computer vision technology. Walgreens and Lowes took part in a pilot program to leverage Project Tango technology to implement in-store navigation through product aisles and to augment the customer experience with virtual shopping features.
But this solution is far from perfect. Compatibility limitations were the biggest problem with it only being compatible with two devices. The project was canceled in 2018 and replaced by Google ARCore, which is already contributing to the evolution of AR technology.
Augmented Reality-Based Indoor Navigation
AR-based indoor navigation is capable of overcoming many of the weaknesses that the other solutions encounter. It also provides ultra-accurate positioning for users. Apple and Google are actively working on improving their AR software development frameworks ARKit and ARCore too.
The current technology is capable of figuring out indoor visitors’ locations with an accuracy of several centimeters within a store, and can even create virtual paths and arrows to help with navigating in the store.
This method relies on placing visual markers at the store entrance, which are scanned by shoppers using their mobile device’s camera. The markers display as poster-like images on walls or floors and help the AR software to pinpoint the shopper’s location. The software then shows the fastest route to the selected department or product, and may even improve the shopper’s experience by creating an AR effect.
This technology can even contribute to the enhancement of internal store processes by helping staff with navigating around offices and warehouses.
In May 2019, the number of AR-enabled devices in the world reached 1.05 billion. This gives retailers more freedom when it comes to device compatibility and is encouraging them to leverage the technological benefits AR navigation platforms offer.
AR technology, when adopted efficiently, can even help struggling businesses improve. Toys ‘R’ Us is one example of this. Despite its ongoing bankruptcy, the company digitized its indoor space across the store’s chain, and the company acknowledged that augmented reality technology was a key reason for its turnaround.
AR technology may still be under development, but the solutions needed to improve AR-based indoor navigation accuracy are already known. Implementing them is the next step for retailers who want to improve the navigability of their stores. Combined with data science and machine learning—it may help to optimize product placement according to store traffic data and create sales prediction models based on that information.
With the push for personalized shopping experiences, the future looks bright for AR technology.
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