Start-up’s ‘indoor GPS’ solves huge retail dilemma

With smartphones everywhere, retailers have begun using location protocols on phones to recruit customers. It’s a great idea — unless your store is indoors, like in a mall, where location services don’t work. One Israeli company claims to have the answer, and a large shopping center in Moscow agrees — with the mall installing the “beacons” location system made by Israeli start-up WiseSec.

One of retailers’ greatest dreams for mobile is to recruit the location services on smartphones in the service of selling things to customers. Imagine, retailers say, if they could automatically send out coupons to customers who are walking or driving by their store, tempting them to come in for a special deal and, hopefully, recruiting new customers?

If only GPS worked everywhere, it would be the perfect advertising solution for retailers. Using location software, cellphone companies distribute coupons and messages on behalf of clients to potential customers driving by gas stations, fast food restaurants, and other retail outlets.

But not all retailers can take advantage of GPS location-based promotions; specifically, stores inside malls cannot, because GPS generally does not work indoors, because there is no “line of sight” to the GPS satellites that determine location. Cellphones equipped with GPS chips notify servers of their locations by sending signals to GPS satellites that respond with their latitude and longitude coordinates, which are then forwarded to the cellphone service providers, who respond by sending offers and information for customers. With a little effort, the system can send details to customer cell phones precisely as the are passing by a business –but only if they’re walking or driving down a street or highway.

For indoor businesses – like stores in a mall – there is no solution as good as GPS. Location technologies that work indoors, like NFC (Near Field Communications) and Bluetooth require very close proximity to data sources in order to work — not practical for a retail environment where a customer and a data point could be hundreds of feet apart. And of course there’s regular text messaging, but as that is controlled by the cellphone service provider, sending out messages to thousands of customers who are inside the mall (and who may be far away from the specific store) can be very expensive.

Enter Haifa-based WiseSec, with one of the few indoor location-based technologies not based on GPS. WiseSec offers a sort of indoor GPS solution — a proprietary solution actually based on the Bluetooth beacons protocol — but requiring a lot less outlay for equipment that a Bluetooth or wide-ranging NFC solution would require. WiseSec installs its communications devices throughout a building or mall, and when customers sign in with an app (such as a coupon app offered by the mall), they sign in to a location network for the building, allowing for transmission of coupons, offers or messages to customers. It’s far cheaper than using standard Bluetooth equipment, said WiseSec.

The Moscow Mall, home to some 5,000 stores and one of the largest in Europe, agrees. “We have one of the biggest commercial centers of Moscow,” said Mr. Mihail Voronin, a manager of the mall. “We deliver over 35,000 shopping trips every day, and with the WiseSec location-based capabilities we can now ensure more convenient shopping trips for our customers.”

“Today’s consumers are empowered by online mobile connectivity as they shop, with their mobile devices becoming an effective shopping companion, enabling them to make informed decisions. While this reality increases retailers’ challenges in the face of an ever-growing stream of information and competition, it also presents a huge opportunity,” said Asaf Toledano, WiseSec VP of Business Development, Marketing, and Sales. “With our solution, the Moscow shopping center and its retailers will be able to deliver an insightful, contextual, and a uniquely tailored mobility shopping experience to each of their customers.”