The rise of e-commerce challenges brick and mortar stores to innovate and find new ways to engage consumers. Digital location technology (GPS, WiFi and Bluetooth beacons) enables retailers to collect rich consumer behavior datasets and personalize the in-store shopping experience. However, many retailers find deploying such new technologies prohibitively expensive due to a lack of know-how and the relatively high cost of IT professionals . Swirl, the Boston-based micro-location marketing start-up, aims to bridge this gap by providing end-to-end solutions to retailers.
GPS, WiFi and Bluetooth beacons locate consumers at varying proximity to the store driving different use cases. Based on the consumers’ GPS signal, retailers can target consumers already in the neighborhood and convince them to enter the store. Once consumers connect to the store’s WiFi network, retailers can push targeted offers to them. Bluetooth beacons take this a step further by identifying the specific location of the consumer in the store, i.e. aisle or department. Beacons are small wireless devices placed around the store that emit signals the consumers’ smartphones can pick up via Bluetooth . By capturing detailed information on the consumers’ movement in stores and the time spent in certain locations, retailers learn more about consumer preferences and needs. The database built up based on these location signals can be used to target offers, attribute online purchases to in-store visits and more.
Exhibit 1. Example consumer information captured by Swirl:
Swirl’s value proposition 
Swirl makes it simple for retailers to get started with micro-location technology providing a complete mobile presence solution. Depending on the current capabilities of the retailer, Swirl sets up its own-branded beacons or connects the retailers existing location signal devices to its platform. The mobile presence data captured is pushed to the retailers’ existing customer databases to enhance omnichannel marketing. Additional Swirl modules focus on creating and optimizing in-store marketing campaigns delivering offers both via the retailers’ own app and that of its audience network partners, e.g. Twitter .
Delivering on the promise
The key differentiating components of Swirl’s strategy are the following:
- Swirl supports all location signals. Many competitors, for example Footmarks, are betting on Bluetooth beacons alone . Bluetooth beacons may appear superior technology given the more precise location. However, Swirl is approaching a broader consumer base with a more holistic offering supporting GPS and WiFi signals as well. This optionality adds complexity to the technology platform, but reinforces Swirl’s objective to provide a complete mobile presence solution.
- Swirl offers its own-branded hardware and modular software. Several competitors provide hardware only catering to retailers that have the knowledge and financial resources to deliver custom software in-house. For example, Target developed its own micro-location marketing solution . Developing hardware is challenging even for an established software company, as we have learned in our Valve case . However, to provide a complete mobile presence solution, it is important that Swirl developed its own hardware to offer retailers that do not yet have beacons set up.
- Swirl relies on strong partnerships for its audience network offering and database integration. Delivering offers via partner’s popular apps in addition to the retailers’ own app multiplies Swirl’s value. The ability to integrate the mobile presence data from Swirl into the retailers’ other consumer databases is essential for a multichannel proposition. Investing in these partnerships have been critical to Swirl’s success.
Exhibit 2. Swirl’s complete mobile presence solution:
Limitations and additional steps
Micro-location marketing solutions and Swirl face many challenges:
- Given the prevalence of mobile data, consumers may not connect to a retailer’s WiFi network any more. Furthermore, if a consumer doesn’t keep Bluetooth on, beacons will not pick up their location. Even if the consumer connects to Bluetooth, they may not have the relevant apps downloaded or running in the background. Essentially a consumer is unlikely to see offers from a retailer unless if they make an effort to see those offers. Hence the offers must compensate the consumers for sharing their information and keeping their connection on.
- Data protection regulations, particularly in Europe, are an obstacle to harnessing the full power of micro-location marketing. Customers must opt-in to receive location-based offers. Offering incentives to consumers to opt-in may be necessary, but this currently falls outside of the scope of Swirl’s work.
- Omnichannel is still a challenge for many retailers . As such, they may choose to address this problem first before even considering micro-location marketing. However, if consumers are not enticed to visit physical stores, e-commerce may take over without Swirl ever getting a chance to prove there is more value to be found in-store.
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 “The Ultimate Retail Marketing Advantage”, Swirl website, https://www.swirl.com/retail-marketers/ accessed on 14 Nov 2016
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 “Solutions: Secure Enterprise Beacon Platform”, Footmarks website, https://www.footmarks.com/solutions/ accessed on 14 Nov 2016
 “Testing, Testing, 1,2,3: Beacon Technology Arrives in 50 Target Stores”, Target website, 5 Aug 2015, https://corporate.target.com/article/2015/08/beacon-technology accessed on 14 Nov 2016
 Ethan Bernstein, Francesca Gino, Bradley Staats, “Opening the Valve: From Software to Hardware (A)”, HBS Case 9-415-015
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Exhibit 1: “The Ultimate Retail Marketing Advantage”, Swirl website, https://www.swirl.com/retail-marketers/ accessed on 14 Nov 2016
Exhibit 2: “The Retail Industry’s Most Advanced Mobile Presence Management and Marketing Platform”, Swirl website, https://www.swirl.com/products/ accessed on 14 Nov 2016