Notes from an indoor location/retail technologies business trip

Having just returned from a whirlwind of company visits with a host of technology companies, a couple of things have struck me about the indoor location and retail technology markets.

Firstly all bets are off in terms of the companies set to be involved in this space. The opportunity is so big with room for so many success stories that companies I couldn’t have imagined launching a solution are now seriously considering their best entry strategy.

Another major trend is how indoor location is going to penetrate into every vertical of both retail and enterprise. ABI Research looks at adoption across 13 retail verticals, but I was still surprised to hear about a major fast-food chain currently trialing technologies. For me, the customer was already in the door, indoor location could bring little additional benefit. However, if that chain can reduce waiting line times by a few percentages each day, it translates into millions of dollars. Queue management alone more than justified the costs.

A couple of big barriers are now approaching that need to be solved. Firstly, as discussed in ABI’s recent report on location-based sensor fusion, the ability to crowdsource RF mapping will become tantamount to this market scaling up rapidly. The company that solves that problem elegantly (and someone will) will make a lot of money. My bet is that sensor fusion and SLAM technologies will be at the core of it.

The other barrier is APIs and the ability for proprietary systems to play nice and integrate with a host of other solutions such as people counting, back-end, smartphone application, CRM systems, etc. At the Wi-Fi access point level, this will be vital for the likes of Motorola, Cisco, Aruba and others to solve. In the same way that we have seen these companies acquire the analytics and application development companies to fill the gaps in their offering, there will be interest in companies that can help them to integrate with the rest of the value chain.

The longer the week went on, the more convinced I became that carriers can become a great Google alternative for retailers that see it as a competitor. In some countries this may involve carriers realizing that their biggest threat is no longer themselves (e.g. WEVE initiative in UK), but they are one of the few entities with similar reach, ubiquitous location capabilities and customer relationships that Google has. They lack the customer facing applications and services necessary to really drive advertising revenue, but from an analytics perspective there is huge potential. But carriers need to act now and start deploying technology to win some of the land grab-they cannot afford to wait for smartcells/het-nets, etc.