The Determination of Customer Location as Human-Computer

Interaction in the Retail Trade: Potentials and New Business Models

Matthias Wißotzki

, Philipp Schweers

and Johannes Wichmann

Business Informatics, Wismar University of Applied Sciences, Philipp-Müller-Str. 14, 23966 Wismar, Germany

Business Informatics, Rostock University, Albert-Einstein-Str. 22, 18059 Rostock, Germany

Keywords: Indoor Location Based, Innenraum Navigation, Indoor Positioning, Indoor Navigation.

Abstract: The Customer Journey has to be better grasped and understood, so that enterprises will be able to exist at the

stationary trade regarding the future of digital competition. The seamless transition from outdoor to indoor

navigation and analyses of movement streams enable many new fields of application, which improve the

Customer Journey. The derivation of new fields of application and business models requires knowledge of a

market’s needs and potentials. The aim of this work is to determine the needs and potentials for the regulation

of indoor location as well as the derivation of new cases of application and potential business models. For this

purpose, interviews with experts from leading software and technology companies as well as specialists of

retail trade with many years of professional experience were conducted.

1 INTRODUCTION

Humans spend a large part of their time in buildings,

regardless of whether in the working or in the private

life. Location Based Services are, for many years, an

established expansion of the outside-living. There,

they have proved themselves as a driver of digital

innovation, for example the health, mobility and

logistics sector and also in the retail trade. Indoor

Location Based Services will extend the existing

spectrum in future and change our dealing with

products, enterprises and customers in buildings and

rooms.

The housing industry as well as the retail trade

and other economies in industry have a paramount

interest in the regulation of an indoor position (Conti

et al., 2016). Therefore, this paper focuses on the

retail trade, which offers a huge potential for applying

an indoor positioning system. In doing so, this

research is intended to identify specific needs and

potentials for the retail trade. As the best-fitting,

already available technical infrastructure for indoor

positioning, an ultrasonic-based solution is

determined. It contains the advantages that the

existing loudspeaker systems in the salesrooms can be

used for navigation and they do not need an extra

installation of hardware, which allows a particularly

fast realization of implementing the navigation.

Further, the system is able to communicate with a

lighting system, which allows a combined application

of Visible Light Communication (VLC).

The second chapter will describe the used

methodology of research, beginning with the

literature research about the preparation of the

interviews up to the analysis of needs and potentials.

Hereinafter follows the examination of the current

status of the research. The fourth chapter describes

the determined cases of application. The analysed

needs are derived from it. Afterwards, the potentials

will be considered. The work ceases with a final view

of all summarized results.

2 PROCESS OF RESEARCH

The paper answers the following research questions:

 Which cases of application can be supported by

the regulation of an indoor location?

 Which needs does the retail trade have in regard

to the regulation of an indoor position?

 Which potentials does the regulation of an indoor

location offer to the retail trade?

The research’s methodical attempt contains five

steps: first - literature research, second - execution of

a guided interview, third - derivation of application

Wißotzki, M., Schweers, P. and Wichmann, J.

The Determination of Customer Location as Human-Computer Interaction in the Retail Trade: Potentials and New Business Models.

DOI: 10.5220/0007618304250432

In Proceedings of the 21st International Conference on Enterprise Information Systems (ICEIS 2019), pages 425-432

ISBN: 978-989-758-372-8

425

cases, fourth - analysing of needs and fifth - potential

analysis.

2.1 Literature Research

The first step of the research procedure is the

literature research about LBS and the research’s

current status in relation to the regulation of indoor

positioning. Important publications are, among

others, „Progress in Location Based Services in

2018“ (Kiefer et al., 2018), Philipp Jäcks’ research

about the ultrasonic-based regulation of indoor

positions (Jäcks, 2016) as well as a survey of the ILA

about the regulation of indoor locations (Conti et al.,

2016) with specific cases of application in different

branches. The results of the literature research

represent the current status (chapter 3), are

fundamental and lead to the questions of the guide-

supported interviews.

2.2 Guide-supported Interview

The interview’s aim is to determine personal

information, knowledge and experiences. The

number of interviews is currently limited to five

selected experts. It is assumed, that already a low

number of interviews can determine the main cases of

application, needs and potentials. The literature

describes this phenomenon of data acquisition as a

saturation, which means that conducting more

interviews would not lead to new knowledge (Krüger

et al., 2014).

The qualitative analysis of the interviews occurs

in three steps: elevation, processing and analysis of

the material (Krüger et al., 2014). The elevation is

based on guide-supported interviews. The processing

is occurred by coding (Mayring, 2010). The analysis

takes place with the help of a quantitative and a

qualitative content analysis.

2.2.1 Preliminary Considerations

The interviews’ circumstances in relation to the

execution, the audio recording, the interview partners

as well as the validation are the result of the

preliminary considerations.

Form of Execution

One survey per company is conducted. Therewith,

experts behave more independent concerning

affiliations to the own company and their

competitors. Furthermore, it is easier to arrange

separate appointments for interviews, compared to a

large common appointment. It is expected, that

isolated interviews cause lower reworking costs

because statements are easier to allocate and thereby

facilitate an appropriate documentation.

Audio Recording

It is assumed that an audio recording would influence

the interviewees’ answers. If there is a consideration

between more accurate recordings and handwritten

notes, the decision is made in favour to the (then)

unrestricted interview partners. Concerning scope

and detail level of handwritten notes, they are

sufficient for an analysis. The constraint, that an

evaluation of emphasis or other linguistic aspects

subsequent to the interview is impossible, is known

and accepted.

Selection of Interview Partners

The interview partners are divided in two groups. The

first one is part of the technology sector and they were

selected by considering the underlying technological

infrastructure. The second group represents the

retailers as the customers of such technologies.

Communicative Validation

Creating notes always contains the risk that the

content of the notes may differ from what the

interviewed person has said (Krüger et al., 2014). To

counter this problem, it was decided to get the result

confirmed by the respondent afterwards. This so-

called "communicative validation" raises the validity

of the interview data (Krüger et al., 2014).

2.2.2 Evaluation

The content analysis represents an evaluation

procedure with consideration of the following

scientific quality criteria: traceability, repeatability

and reliability (Krüger et al., 2014).

Schmidt refers to a method of interview analysis

in five steps. First, evaluation categories are formed

initially, which are described subsequent to an

encoding guide (Schmidt, 2004). A description of a

category in the encoding guide is made out of four

parts: the description and definition of the category,

coding rules and examples (anchor and demarcation

examples) (Mayring, 2010). With assistance of those

evaluation categories, the interviews can be coded

and it is possible to create substantial overviews

(Schmidt, 2004). The coding’s aim is the

transformation of bullet points into data that can be

qualitatively and quantitatively evaluated (Krüger et

al., 2014). Finally, hypotheses of the individual inter-

views can be examined for the purpose of a deeper

interpretation (Schmidt, 2004). This research

represents the characteristic aspects of each

interview.

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2.3 Needs Analysis

The needs analysis starts on the demand side. In

addition to requirements, it also determines clusters

of people. In each cluster of individuals, the same or

at least very similar requirements to an ideal product

exist (Berekoven et al., 2009). The needs analysis is

based on the use cases of the interview partners. Some

needs are specific to a use case, others are deduced

from a group of use cases.

2.4 Potential Analysis

The established methods for potential analysis are

useless for the analysis of technologies, because they

are geared to companies and personnel.

In relation to the interviews, a question of the

guideline is directly targeted to determine the

potential of indoor positioning. Many potentials

result from the answers of the interviews and will be

examined more closely and also be classified in the

following.

3 STATE OF THE ART

Together with the Open Geospatial Consortium

(OGC) and the i-locate project, the InLocation

Alliance (ILA) conducted a survey for the

determination of indoor location (Conti et al., 2016).

The ILA was founded by the cellular mobile

telephone industry to accelerate the introduction of

solutions for indoor positions. These solutions

improve the mobile experience by creating new

opportunities for consumers and industry (InLocation

Alliance, 2018).

The OGC® is an international industry

consortium with 519 companies, government

departments and universities, which are participating

in a consensus process to develop publicly available

interface standards. The OGC® standards support

interoperable solutions that make web, wireless and

LBS, as well as current IT, location-based available

(Open Geospatial Consortium, 2018).

The i-locate project was founded by the European

Commission within the Information and

Communication Technology Program (ICT-PSP).

The project's aim is to create a public geo-portal to

gather and provide information about publicly

accessible buildings as Open Data, as well as an open

source toolkit for integrated hybrid (indoor-outdoor)

LBS to locate and track objects and people (i-locate

project, 2018).

Altogether, 153 survey replies from 33 nations

were collected and evaluated in the survey. The

participants were composed of one-third of users and

two-thirds of system developers for the determination

of an indoor position. All participants are directly

involved in the determination market of an indoor

location and are aware of its dynamics.

The majority of the survey participants are users

of systems for the determination of an indoor position

and work in the healthcare sector or provide services

for the elderly. Only a small proportion of the

respondents are within the retail market. Even more

important is the fact, that the developers of systems

for determination of an indoor location recognize

more than 20 different industries at the same time as

their target groups. This demonstrates the broad

applicability of solutions for determination of an

indoor position.

The survey’s aim was to create a broad overview

of requirements and cases of applications for the

determination of an indoor position. Furthermore,

trends, challenges and opportunities should be

gathered.

In the following chapters the requirements,

interests and cases of applications of determination of

an indoor location will be represented.

3.1 Requirements

The evaluation of the survey revealed the following

requirements:

 Privacy as a whole is regarded as the most critical

barrier because of its social (concerning the user

perception) and legal implications.

 The current level of interoperability is considered

inadequate. The increase of interoperability

would lead to cost minimisation.

 As seen from the software perspective, the

developments in future should focus on platforms

that permit the use of several location

technologies.

 Hardware developments should focus on

technologies that gather data in a passive system

with low latency and small energy demand.

Furthermore, the solutions should be easy to

configure.

 Two requirements have turned out clearly: good

position accuracy and long-lasting site

infrastructures that can be used for a variety of

different applications.

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3.2 Users and Providers Interests

The described survey shows a high agreement of

interests at the determination of an indoor position by

users and providers of localization systems (Conti et

al., 2016):

 Localization of People

The evaluation resulted in two possibilities of

localization: Determination of the position in the

mobile device or via network environment. The

first category implies a major interest in

navigation, orientation- and real-time position

determination, which is necessary for pathfinding

and visitor interaction applications. The second

category contains analytics, geo-fencing,

approach recognition and other functions related

to setting up context sensitive environments. The

interest in Location Based Marketing (LBM) and

Location Based Social Network (LBSN) is very

low.

 Localization of Objects

Two interests stand out clearly: tracking and real-

time positioning. In comparison to systems for the

localization of people, there is a low interest in

analyzing the location of objects.

3.3 Explicit Cases of Application

The following section describes specific cases of

application, which were compiled by the participants

of the aforementioned survey. The core topic of this

work is a special focus on the retail trade. The cases

of application were reduced and sorted in a

descending order from the point of view of the

content-related closeness to the retail trade:

 Retail Trade

The survey participants mention the following

cases of application: localization of a product in a

salesroom, navigation to Point of Sale (PoS)

terminals with contactless payment, location

determination of people and the provision of

targeted advertising. Referred to marketing, the

participants mention the Location Based

Marketing (LBM) and the Location Based

Advertising (LBA). Retailers can use precise

location determination to increase their profit

margins, to manage warehouse replenishment

more efficient, to avoid empty shelves and to offer

custom-made advertising (Giaglis et al., 2002).

 Ambient Intelligence

With the identification of approaching and

distance measurement between objects and

people, the participants describe two basic

functions of the ambient intelligence. A utilization

is the information transmission of street lighting

by VLC.

 Facility Management

The evaluation is especially interesting for facility

management. Within this, the survey’s

participants are interested in functions like e.g.

monitoring the passenger flow in the interior

space, object tracking, security and

authentication. As another aspect, the analytics

are mentioned. Here, the usage data can be used

in different granularities (buildings, floors or

individual rooms) to develop a comprehensive

spatial database of the interior space.

 Security

In the security area, geo-fencing and person

tracking are examples for cases of application.

Another case is the reference of emergency exits

or safe areas, even if the lighting breaks down or

smoke reduces visibility.

 Corporate Offices

One way to use the determination of indoor

positions in an office is a virtual reception of

visitors and their navigation to the desired

destination. Another example is the official

tracking and work control. Thereby, the duration

of staying and movement patterns of people and

objects in and between different institutions can

be gathered.

4 INTERVIEW EVALUATION

AND DERIVATION OF THE

CASES OF APPLICATION

In this section, the first research question is answered:

Which uses of application can be supported with the

determination of an indoor location?

4.1 Qualitative Analysis

The qualitative analysis investigates the mentioned

cases of application per interview.

First Interview

The first interview partner describes a difference

between analyses with and without additional data.

Personal data about the customer’s profile as well as

items in the shopping basket are mentioned as

additional data. Without them, applications like

navigation, surveys, and location-based advertising

can be implemented anyway, by using information

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from the paths and residence times. With additional

data in form of customer profile and demographic

information, it would be possible to build cohorts and

to compare them among each other. Furthermore,

correlations from the shopping basket to the

customers’ path, to articles and residence times could

be analysed. By using the data per costumer, one

could considerate the comparison of branches,

locations or industries. Besides to the analysis, the

navigation to products and the retrieval of product

information were mentioned as cases of application.

Second Interview

When asked about the cases of application, the second

interview partner mentions analyses, product

navigation along a shopping list and location-based

advertising. For the employees, it could be possible to

use the determination of indoor locations as a path

optimization in the pick-and-pack-navigation at the

warehouse. Another case of application affects the

advice. Here it is conceivable that a customer calls for

an employee instead of seeking for one.

Third Interview

The third interview partner divides the cases of

application into the following four groups: customer

campaign, customer friendliness, employee

efficiency and analysis. The customer campaign

includes location-based actions. The group of

customer friendliness contains the navigation to

products and path optimization along a shopping list.

The group of employee efficiency comprises the

navigation at shelf stocking and the pick-and-pack

navigation. No specific examples are mentioned for

the analysis.

Fourth Interview

The interviewee focuses on the navigation: from the

employee to the customer, from the customer to the

employee as well as from the customer and employee

to the product. The interview partner mentions the

measurability of the return on marketing activities

and investments as a current problem. He would like

to be able to analyse the effectiveness of brochure

advertising. The determination of indoor positions

represent a solution, from his point of view.

Fifth Interview

The interview partners of the fifth interview define

the completeness audit of guests on board as an case

of application: The determination of indoor position

can be used to equalize a return to the last harbour

because of the apprehension of forgotten guests. An

analysis could represent a location-adjusted view of

the shop assortment. It is impossible to represent

every product at a prominent place on the shelf.

Consequently, this means that the sales figures of the

same product in two various attractive positions can

be different. Therefore, it may appear the conclusion

that because one product sells less often than another

and it therefore should be taken out of the assortment

may be wrong, if the position was not considered. The

aim of the location-adjusted view would be to

determine the effect of the product positioning inside

the shop.

4.2 Quantitative Analysis

The analysis is the only case of application, which is

mentioned by all interview partners. Thereby, two of

the interview partners mention that hot spots,

residence times and A/B tests are specific aims for an

analysis. Four interview partners declare themselves

in favour of location-based advertising and

navigation. Two interview partners indicate that

customers could be navigated to the products along a

shopping list. It would also be possible to route

employees to customers or vice versa. Figure 1 shows

the four most frequent cases of application.

Figure 1: Frequencies of applications.

Respectively, application cases with one mention

are surveys, the demand for product information, the

position recording of products on the shelf and

notifications.

5 NEEDS ANALYSIS

In this section, the second research question is

answered: Which needs does the retail trade have in

regard to the determination of an indoor position?

Within the needs analysis, some people clusters

are determined, which have the same or at least

similar claims to an ideal product. These groups of

customers are partly derived from the interview

partners and include the following stakeholders:

 Hardware and software developers for the

determination of an indoor location, derived from

the technological perspective as well as

The Determination of Customer Location as Human-Computer Interaction in the Retail Trade: Potentials and New Business Models

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 Employees, retailers, and costumers in operative

business. According to the interview partners, the

customers and employees most urgently need the

navigation or rather the path optimization. On the

other hand, the retailers have a great interest in

analytics.

The following paragraphs describe the derived

needs for each case of application. The section ends

with a short summary of the needs.

Navigation

To realize the most appropriate navigation, not only

the aim but also the knowledge of possible barriers is

necessary. Walls, shelves or locked doors are

examples for typical obstacles. The generated

database is dedicated to calculate the route. Since the

system navigates people threw buildings, a

distinction between floors is necessary to reach the

targeted place.

When using the navigation system, the targeted

product has to be visible within a few centimetres, so

that it could be found in a large amount of products.

One claim also refers to the frequency of the

positions’ determination. It has to be sufficiently high

to detect slight position changes. In addition, the

orientation of the customer is helpful, so that it could

be distinguished, whether the person faces the

product or he or she is adverted.

To navigate along the shopping list, the

calculation of the shortest route is necessary. If a

customer calls an employee for advice, the location of

the customer must be visible to the employee.

Surveys

This case is triggered by certain events and schedules

to fill out a survey by the customers. Events for

inducing such surveys can be a long residence time,

leaving or entering a business. The reliable

determination of such entry events can be derived as

a need. In addition to that, the respondent needs an

input device.

Product Information

Similar to the navigation section, the products have to

be distinguishable in this case of application as well.

It is not very helpful for the customer, if he or she is

in front of a shelf and all products within a radius of

one metre are displayed on his smartphone. In this

case, the customer would need a possibility to

determine the product for which he or she needs more

information. Therefore, the position of the

smartphone, the viewing direction and the centimetre-

precise location of the products are necessary

features.

Data Acquisition of Products on the Shelf

In this application case, a high precision in a three-

dimensional space with an accuracy of a few

centimetres is required. While of scanning a product

in the shelf, the position of the scanner is captured and

stored on the product.

Location-based Offers/Advertising

Two characteristics of this case of application are

conceivable, depending on the personalization: one

possibility without and another with profile data of

the customer. In both cases, data about offers have to

be available. The trigger for displaying an

advertisement could be: entering an area (geofencing)

or approaching a product. The grade of accuracy

about the position determination depends on the

trigger.

Notifications at Approaching Reduced

Products

As in previous cases of application, the accuracy of

location determination has to be high enough to

reliably identify a convergence to products. The

notification has to be transmitted to the customer.

Check Completeness of Guests on Board

The checking of completeness should make a

turnaround of the boat because of the apprehension of

forgotten guests unnecessary. To encounter this

requirement, a high degree of reliability is needed to

implement this solution in the envisaged

environment. There must be no difference between

the systemically determined and the indeed

completeness.

Use of Personnel or Energy Usage according to

Capacity

In this case of application, the reliability is very

important as well. Here, the specific needs can be

derived to be able to reliably determine the workload.

Analysis

The hot spot analysis requires the least amount of

data. It is sufficient to evaluate superimposed location

determinations. For the analysis of walking routes,

the measurement data must at least be clearly

assigned to the measuring device, but not to an

identified person. The analysis of customer interests

in relation to the residence time next to a product or

in different departments needs a clear identification.

Furthermore, it is interesting to generate precise

predictions about the tendencies of customers out of

measured data. From A/B tests, no general need can

be derived. The compared situations before and after

a change or at the same time in two different areas are

too different to determine concrete predictions. For

the comparison of locations, branches or companies,

the measured position data have to be clearly assigned

to one of these perspectives. The analysis of residence

times requires the definition of a radius, in which

several measured values are assigned to the same

place in order to aggregate residence times. Only

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then, the staying is distinguishable from a minimal

movement. Sales and shelf positions must be gathered

at the selling time, so that revenues can be analysed

in a location-adjusted way. The requirement is to

connect the position data of products with their sales.

Therefore, it is necessary to differentiate between

clothes inside and outside of the changing room, to

gain information about the situation and whether it is

a possible sale or just a fitting. For that, a high

accuracy is required. In order to investigate the

complaint subsequent to marketing approaches, it

must be distinguishable whether visits by customers

were induced by those approaches or not.

Summary

Derived from the cases of application, the following

requirements are determined: identification of a

person, connection to external data sources,

orientation of the navigated person, differentiation

between floors, high reliability of the position

determination as well as a high spatial and temporal

accuracy.

6 POTENTIAL ANALYSIS

In this section, the third research question is

answered: Which potentials does the regulation of an

indoor location offer to the retail trade? The database

dedicated to answer this question consists of

potentials for the determination of indoor position,

which were named by the interview partners. In the

following segments, the individual potentials are

named and their frequency of mention is presented.

Afterwards, they will be divided in four groups.

The most frequently mentioned potentials are the

increase of comfort and the path optimization. In the

latter case, two interview partners named incoming

Figure 2: Frequencies of potentials.

goods and pick-and-pack. Revenue growth, increase

of customer satisfaction, improvement of advice,

LBA precision enhancement, process optimisation

and employee efficiency, as well as the appeal

improvement for a store visit were also mentioned

twice. Figure 1 shows the most common potentials.

The optimisation of product placement,

gamification, cost savings because of capacity-

controlled energy use and the support of multichannel

marketing were only mentioned once.

The analysis results in the following four groups

of potentials and gamification.

Economy

Here, the interview partners recognize the following

potentials: reducing personnel deployment, saving

energy by product placement according to the amount

of margins. Furthermore, they mentioned the increase

in revenue as a potential.

The fifth interview partner describes an

economically negative aspect of navigation.

According to him, the number of visited touch points

would be reduced. In addition, the following of a

route reduces the potential that customers buy

something that they coincidentally see, because their

attention pertains to the route.

Efficiency

The path and process optimization are potentials in

the field of efficiency. Superficially is the employees’

daily tasks optimization in the retail trade.

Marketing

The potentials are the increase of the accuracy of

location-based advertisements, the increase of the

appeal for a store visit and the support of

multichannel marketing. An identifying

determination of an indoor position could reduce

friction losses between online and offline analyses.

Convenience

In addition to improve the consulting, the increase in

comfort and customer satisfaction were mentioned.

7 CONCLUSIONS

Digitalization is currently one of the main drivers of

economic growth. As a consequence thereof, the

management in stationary retail trade has to think

about additionally and new digital services because of

an increasing digital competition and omnipresent

access technologies, as well as dynamic customer

requirements. One possibility is to analyse streams of

motion for a better understanding of the customer

journey and a seamless transition from outdoor to

indoor navigation dedicated to the detection of

products. Varieties of new fields of application arise

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431

out of this context, which have been explored more

closely in this research.

To determine those applications, interviews with

experts from leading software and technology

companies were conducted. The interview notes were

evaluated both qualitatively and quantitatively. The

analysis of the customer journey, the determination of

an indoor position including navigation and location-

based advertising belong to the most frequently

mentioned cases of application. According to the

experts’ opinions, they have a great potential for

increasing customer comfort with regard to path

optimization. Additionally, location-based

advertising generates completely new context-related

upselling potentials for the stationary trade.

Furthermore, the evaluation showed that the experts

still ascertain potentials especially in the fields of

efficiency improvement, digital marketing

approaches, promotion of convenience and

gamification.

The derived experts needs include the

identification of a person, the connection with

external data, the orientation of the navigated person,

the differentiation between floors, a high level of

reliability and a large degree of spatial and temporal

accuracy. Based on those needs, the further research

should validate the findings, as the number of five

interviewees does not claim to be indisputable in

relation to scientific correctness. Furthermore, it

could concentrate on the comparison of available

technologies, the increasing of representativeness and

the legally exploring of data protection to enlarge the

knowledge of location based services and their

possible implementation.

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