Swarm Tracks Your Customers Like Bees to the Honeypot

How many customers walk into your shop each day? What are your busiest days and times of day? How long do they stay? How many of them are repeat customers and how often do they visit? What is your percentage conversion rate from store visitor to purchaser?

If you knew the answers to all of these questions on an ongoing basis you could then measure the effect of marketing campaigns, staff training and various other changes that you might like to test to improve your bike shop’s profitability.

But until now it has been impossible to affordably gather the data that would accurately answer each of these questions.

Bicycling Trade recently became aware of a start up software developer from California USA named Swarm that already has a large number of bike shops in the USA and elsewhere including a few in Australia using its technology to better track their store visitors.

Swarm, which describes itself as a retail analytics company, is headquartered in San Francisco with offices in Los Angeles, New York and Sydney. It was founded in San Francisco about two years ago and has been in Sydney since late August 2013.

We interviewed Sydney based Edward Welsh who is Co-Director of Swarm Australia & New Zealand. We first asked Ed to explain exactly how his company gathers this data.

“We deploy a small wi-fi device in retail stores which tracks customers by their smartphones to gather useful analytical data,” he explained.

“Every phone has a ‘MAC-id’ associated with it which is a random array of numbers. (MAC-id is a generic identification system that applies to all devices, not just iPhones and includes laptops, tablets etc) The phone itself is constantly pinging for a wi-fi connection and we can pick up on that.

The phone needs to be switched on and the wi-fi needs to be turned on. In metropolitan areas we see a very high penetration rate of smart phones.”

So that’s how they gather the data, but it sounds rather like Big Brother. Surely there would be privacy issues?

Ed does not think there will be, saying, “We’re not actually gathering any personal information about the individual. We can just recognise that a phone has come in store, how long they’ve stayed there and whether they’re a repeat visitor or not.

But we can also offer free wi-fi in store and then gather personal data (with permission) if they opt in to that service.

“We see ourselves as the first movers in Australia (in this field). It’s our job to educate not only the retailers, but consumers about our technology and the fact that we’re not gathering any personal data.” (unless they opt in to a service).

Ed then gave a few examples of how the data could be used to help a bike shop owner.

“You can look at rostering. We can see trends. Which are the busiest times?

Staffing is one of the most expensive costs for retailers, so we can combat that issue. When should be take breaks? Should we be opening at different times of the day?

“If we run a marketing campaign, did we see an increase in foot traffic? In repeat visitors?

“The store owner or manager is not always on site. They can log online and look at the store traffic. If staff are saying ‘we had a very slow day’, you can look at the numbers. You might say, you had 20 people come through but the average dwell time was only 10 minutes. So we might look at how we’re training our staff and how they’re interacting with the customers. We can use that as an index when we’re looking at the overall function and development of the store.”

Of course the next question any bike shop owner remotely interested in this new technology would ask, is, ‘How much?’

The wi-fi device itself is $199 and it’s $45 per month for a 12 month contract to use the software which is ‘cloud based’ meaning that you access it via the internet every time.

“We also do free 30 day trials,” Ed said. If you look at traditional thermal door counters they cost about $1,400 then you need to have a specialist come and install it.

“At the moment, we’re working on doing heat mapping, but it’s not available yet.”

That would allow the software to show what parts of the store are most heavily frequented by customers, so that over time you could measure the impact of changes in floor layout, new merchandise displays and so on.

The system also measures ‘Walk-By Foot traffic and Window Conversion.’ This means that it can sense how many people are walking along the footpath past your store, so it can calculate the percentage that actually come into your store.

There are a range of other features, so if you want to see more information you can visit www.swarm-mobile.com

Obviously, this technology is not just for bike shops. A search of the internet soon reveals that Swarm does not have this potentially huge global market to itself. There are at least three other USA companies and one from Finland that all appear to be developing competing products. They all appear to be receiving millions of dollars in seed funding from IT venture capital companies. No doubt the market place will decide which solution provider takes the biggest market share. Regardless of this and any future privacy issues, it looks like this new business management tool is here to stay.