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Businesses tap in-house WiFi to engage customers

Rochester Business Journal
April 10, 2015

As consumers’ patience for traditional sales pitches wears thin, more retailers are interacting with customers through in-store WiFi. Businesses entice shoppers to use their in-house networks in various ways, including sending check-in messages to their smartphones and offering discounts only to those who log in.

Yet despite the rise of WiFi in commercial settings, many businesses have just begun sifting through the nuggets of information about consumer behavior that the technology reveals.

A decade has passed since free public WiFi first gained traction among laptop users at cafes and libraries around the world. Smartphones, mobile applications and social media now have catapulted the technology to a new level of importance.

“Especially for service and retail-type places, it’s almost critical to have WiFi,” says Lee Drake, president of Rochester-based OS-Cubed Inc., which specializes in software and website development, hosting services, and computer and server technical support.

He adds: “Now you may say, ‘Well, people can always use their data plans,’ but a lot of people have very limited data plans because they’re so expensive, and they’d much rather post photos and things like that using a WiFi (connection).”

Retailers already rely on the Internet for processing credit cards and handling other point-of-sale transactions, so adding WiFi “is not a big deal,” Drake says.

Businesses looking to attract Generation Z—generally defined as individuals born in the mid- to late 1990s or later—should be particularly committed to in-store WiFi because that cohort is “digitally overconnected,” says Donna McLaren, associate vice president of brand and marketing communications at Roberts Wesleyan College.

Fast casual restaurants even have barstool seating that caters to Generation Z’s interest in poring over their mobile devices while they eat, she adds.

Gen Zers also “change brands easily in search of higher quality,” says McLaren, an adjunct instructor at Roberts Wesleyan who teaches a graduate-level course on consumer behavior. “So … providing the opportunity for them to be connected would be key, and that might help build some brand loyalty with them.”

Recent research supports the contention that offering WiFi boosts customer engagement.

According to survey results released in January by EarthLink Holdings Corp., 82 percent of midsize to large retailer respondents offered WiFi to customers, and 28 percent of retailers overall gained increased customer loyalty due to the technology. Thirty-four percent of retailers also cited plans to update their WiFi this year.

Maximizing WiFi’s benefit, however, means pairing the technology with analytics, says Greg Griffiths, vice president of product marketing at EarthLink Inc.

“The best way to keep customers loyal and engaged with a brand is to understand their motivations and behavior so future offerings can be tailored to them,” he says.

Among Earthlink’s survey respondents that analyze WiFi data for meaningful patterns, most tracked how many mobile devices entered their stores in a given period, how long guests used the wireless connection on average, which hotspots inside the stores attracted the most traffic, and what type of mobile devices customers used.

Still, many businesses have yet to tap WiFi data for insight on consumer behavior, says Griffiths, who is based in Washington state but travels to Rochester’s EarthLink office regularly. Retailers that take the leap have an easier time identifying repeat customers, providing adequate staffing during peak shopping times and improving overall productivity, he says.

Current WiFi technology also can let retailers know if, for instance, “30 percent of the bandwidth is being used for Facebook and 10 percent is being used for YouTube and 15 percent is being used for streaming video from Vimeo,” Drake says.

He adds: “And the advantage of that, of course, is now you know where to direct your advertising, right? If your customers are spending 30 percent of their time on Facebook while they’re in your store, well, then you want to make sure your Facebook presence is well-built and that it supports the types of activities your customers may need when they’re on that site.” 

In the Rochester area, Wegmans Food Markets Inc. was among the first large retailers to offer public WiFi. All 85 stores in the locally based chain currently offer the technology.

“The most important way it improves customer service is that it gives our customers the ability to use our Wegmans app while they are shopping to check off items on their shopping list, look up Wegmans recipes to find ingredients and add them to their list, (and) look up individual products to find specific info about that product,” says Jo Natale, spokeswoman for Wegmans.

While large retailers regard in-house WiFi as a point of difference, some small businesses simply offer it as a convenience.

“In our experience, people come here anyway and just use (the WiFi) while they’re here waiting for their food and eating,” says Andrea Parros, chef and owner of The Red Fern, a vegan restaurant that opened in Rochester in 2013. The eatery does not track or analyze diners’ use of the technology.

Parros adds: “It’s the same WiFi we use to conduct our own business, so it doesn’t cost us any extra to offer it to customers.”

While consumers should not cast aside every concern about WiFi security and the implications of data collection, the technology has many practical upsides, McLaren says. Using WiFi to access an application that organizes a shopping list by store aisle helps customers save time, thereby sparking goodwill for a brand.

“So I think WiFi enables those connections to the business,” she says. “It’s kind of like part of the attraction.”

Sheila Livadas is a Rochester-area freelance writer.

4/10/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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