Metro Group Media Markt Tests LED-Based Instore Navigation
Metro Group’s electronics store operator Media Markt is testing instore navigation with LED lights from Philips in a few stores in the Netherlands and Belgium, Lebensmittel Zeitung reports. The LED ceiling lights transmit information to help smartphone-equipped shoppers to find their way to different goods. The visible light communication (VLC) connects via light waves, invisible to human eyes, with the customer’s smartphone camera.
The system is able to navigate the shopper to an area with 30 cm accuracy, compared to one to three metres with previous technologies. The service is available for any smartphone system; customers just need to download the retailer’s mobile app.
Frauke Vor dem Berge (Retail Analyst)
Opinion The Fine Line Between Benefit and Annoyance
Media Markt is not entering new realms with the introduction of instore navigation. The electronics specialist Media-Saturn already tested this in its Saturn flagship store in Ingolstadt (Southern Germany). However, in the past the retailer used two different technologies: beacons with Bluetooth and a system that uses the earth’s magnetic field. With these systems, tests showed that stability and accuracy were insufficient. Other instore navigation systems using Wi-Fi have also been shown to be susceptible to outages.
The advantage of the LED-based system is most importantly its accuracy. Another benefit is that retailers do not need to invest in additional infrastructure, as with beacons and Wi-Fi triangulation systems. Even though LED-based technology needs to be installed, the system can use the existing lightning infrastructure – and obviously it provides the light source a store would need anyway. As with every technology, there are downsides. What can be complicated is the need for constant line of sight.
Instore navigation not only makes sense in electronics stores; grocers are also on the front line. French retailer Carrefour already trialled the LED-based system in a hypermarket in mid-2015. In a store as big as a French hypermarket, instore navigation can definitely add value to the shopper experience, avoiding straying between never-ending aisles while searching for one product. This service might not be as relevant in smaller stores. Of course, by letting customers know the exact location of all items on their grocery list, the retailer could be missing out on impulse opportunities. To balance this out, Carrefour sends promotions to the customer’s mobile during the shopping trip, although this risks customers feeling annoyed as they are bombarded with unnecessary messages. Using the customer’s shopping history and favourites could help to customise these offers, although data privacy concerns might put shoppers off.
In the case of Media Markt, we think that instore navigation is a useful tool as customers usually have only one or a few products in mind and do not want to wander endlessly around the store. Higher ticket goods make impulse buys not as much of a concern as in a grocery store. This may be why Media Markt is to date not sending promotions via its instore navigation system, although it does not exclude introducing this in future.
Lighting-based instore navigation has been slow to take off. Many of the installations are at single stores such as those introduced to Edeka and E.Leclerc a few months ago. Only US retailer Target has dared to roll it out to 100 stores, as European retailers continue to carefully assess whether there is any real added value in wider roll-out of the technology.