Free WiFi Quietly Becomes Widespread at Retail

Discussion
Dec 19, 2012
Tom Ryan

With little fanfare, Target, J.C. Penney, Kohl’s and Saks joined several other chains just before the start of the holiday season in installing free Wi-Fi access across their locations.

The introductions follow wireless rollouts at Macy’s, Sam’s Club and Sears last year as well as Nordstrom in 2010. Best Buy and Barnes & Noble also offer free WiFi, and Walmart reportedly does in some stores.

Access quietly arrived despite many stories this holiday around retailers combatting showrooming. The rollout also comes as customers have grown accustomed to free access at cafes, airports, fast food chains, hotels and elsewhere.

"It’s where guests are going and where we need to be," Eddie Baeb, a spokesperson for Target told Fortune magazine. "We love showrooming when we’re the ones booking the sales."

At Target, free WiFi helps provide better access for shoppers to the discounter’s mobile app, and also enables guests to redeem Target mobile coupons and scan QR codes throughout the store.

But Fortune found in visits to some chains in San Francisco that most aren’t loudly broadcasting those benefits. Some of Macy’s doors were affixed with "free Wi-Fi inside" stickers. At Target, a video screen at the entrance of the store flashed messages about free WiFi. Saks had no signage indicating the service.

To connect to the WiFi network, shoppers sign off on terms on their smartphones. These often disclose that the open network will track the websites customers visit and the type of devices they use.

Stores could potentially use such data to personalize deals to shoppers. Knowing what items a shopper is searching for can also help identify merchandise they should be stocking. But the stores contacted by Fortune indicated that they are not yet using information they collect to do anything except to keep out hackers.

Many larger grocers, again quietly, appear to have introduced the service in recent years, as well. In extending WiFi to all its locations this year, Big Y, one of the largest independently owned supermarket chains in New England, said access will help shoppers manage their profiles, view store flyers on Bigy.com, enter contests, and explore special savings.

Why aren’t stores promoting free WiFi access to a greater degree? In what ways, if at all, may free WiFi access become more critical for retailers in the years ahead?

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21 Comments on "Free WiFi Quietly Becomes Widespread at Retail"


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David Biernbaum
Guest
6 years 11 months ago

Providing free WiFi access today is almost an assumed no-brainer service the way pay phones used to be. Customers expect free WiFi pretty much wherever they shop. This is why retailers are not making a “big deal” about offering free WiFi. And by the way, we also offer free rest rooms, drinking fountains, and a couple of chairs if you need to take a rest.

Max Goldberg
Guest
6 years 11 months ago

How many consumers are going to take the time to log on to a retailer’s WiFi network, when they want to get into the store, shop and get out? Plus, their smart phones already have Internet access through their mobile carriers.

Offering WiFi in retail is different than offering WiFi at Starbucks or other coffee houses, where consumers sit for a period of time and may focus on their electronic devices, and where messages and offers are not pushed to them.

Paula Rosenblum
Guest
6 years 11 months ago

I imagine they’re just trying out available bandwidth, security and generally shaking down the system before promoting it. Also, if you don’t have it in every store, it’s not a great idea to promote the feature strongly.

A word of caution—our data tells us more than half of retailers still do NOT have WiFi in stores on the selling floor—not even for their employees or store managers. Obviously this has to change, but the pace of adoption has been really, really slow.

Adrian Weidmann
Guest
6 years 11 months ago

The availability of free WiFi access can be a double edged sword. The retailers invested in the WiFi infrastructure for a singular purpose—to support their specific business interests and objectives. On the other hand, free WiFi also provides…well…FREE WIFI!! How many people hang out at coffee shops for 2 hours enjoying that one latte and the free WiFi access?

The WiFi infrastructure will provide the connectivity backbone for future in-store applications. Retailers don’t need to advertise free WiFi as the WiFi is only there to support their initiatives—hopefully for the true value and benefit of their shoppers.

Dick Seesel
Guest
6 years 11 months ago

I agree with David: It’s a clear incentive to stay at a hotel where WiFi is free, instead of another hotel with excessive charges, because the guest assumes plenty of usage during an overnight (or longer) stay. On the other hand, a shopper may spend 30 minutes at JCP, Target or wherever with a clear purchase mission in mind.

Offering WiFi becomes a “nice to have” benefit but hardly something that is going to affect purchase behavior. On the other hand, using an app like Shopkick to engage the consumer with a smartphone when she is already in your store is becoming an essential tactic.

Lee Kent
Guest
6 years 11 months ago

Paula, as usual, is spot on. In general, retailers have never been known as early adopters. Putting in WiFi is a pretty easy and painless thing to do, and from there they can look at how they plan to use it to their advantage. Integrating touchpoints, closing exit points, generating interaction, etc. all to build the right customer experience for the brand.

Matthew Keylock
Guest
Matthew Keylock
6 years 11 months ago

There are multiple reasons for having WiFi in a retail store before you get to the consumer free WiFi benefit.

I agree with other comments that the needs for WiFi when shopping a retail store are not the same as sitting and working in a coffee shop.

Publicising WiFi to consumers might impact bandwidth/access and undermine the main drivers for installing it as well as annoy customers if it doesn’t work fast enough.

A soft introduction seems very sensible to me.

James Tenser
Guest
6 years 11 months ago

No need to promote this. Smartphones tell their owners when an open network is available. If the retailer wants to insert incentives, fees, terms or disclaimers, so be it. Shoppers may connect, or not, as they see fit.

I do believe that free WiFi access is now an expected service standard for many, if not most, shoppers. Retailers who don’t offer this amenity may (literally) be turning people off.

As shoppers get used to staying connected in store, they open a channel for communications, services and yes, tracking and surveillance. We don’t exactly know what retailers will do with all the data this generates, but it’s going to get big. Fast.

Kenneth Leung
Guest
6 years 11 months ago

I think free WiFi is becoming table stakes from a customer experience connectivity perspective. To an extent you don’t want to encourage “camping,” but the value add will be integrating the store WiFi with retailers’ mobile applications. That way shoppers who opt in can have their mobile device automatically update and receive promotions and relevant information when they are within range of the store’s WiFi. That is where you will see the value.

W. Frank Dell II
Guest
6 years 11 months ago

Free WiFi may be a fad. A retailer wants customers to shop, not web search. These new applications that do price comparisons are nice for a limited group of shoppers. Unless competing retailers are nearby, the drive for a couple of buck savings may not be worth it. Comparison shopping is more likely to occur before the shopping trip.

Shep Hyken
Guest
6 years 11 months ago

To use mobile marketing effectively, the store needs to make it easy for the customer to be online. Free WiFi is a way to do it. As much as it is a convenience to the customer, it is also about the ability to connect with the customer while they are in the store.

Roger Saunders
Guest
6 years 11 months ago

To all things there is a time and season …

Based on the BIGinsight Monthly Consumer Survey of over 8,500+, in January, 2011, 31.2% of adult respondents said they owned a smartphone. In October, 2012, 49.5% of respondents stated they owned a smartphone.

In the later survey, 33.7% of smartphone owners said that they planned to research products/compare prices on their phone; 15.1% said that they plan to purchase products via their phone; 16.7% said that they will redeem coupons on the device, and 24.4% said they would use their smartphone to look up retail information.

Not everybody is an early adopter of technology. Retailers have had their eye on the importance of making use of digital devices within their stores. They do have a few other items on their capital and IT agendas.

The industry is moving forward, and you can be sure that WiFi will play a more prominent position within stores in the coming months, for use with smartphones and other digital devices.

Craig Sundstrom
Guest
6 years 11 months ago

“The rollout also comes as customers have grown accustomed to free access….”

The article answers its own question (and if I were a store like Saks, I can’t see a promo like “as seen at Sears” as being much of a draw).

Martin Mehalchin
Guest
6 years 11 months ago

The Target executive quoted hit the nail on the head: “We love showrooming when we’re the ones booking the sales.” If you’re a competitive retailer, then for every customer that uses the WiFi to price check you, there should be an equal number or more who go online and find information that validates their decision to buy the item now rather than going home to think about it.

I agree with Paula and others that retailers should make sure the experience of signing on and staying connected is painless before they promote the service. Once WiFi is in place and being promoted, they should quickly move to capitalize on the consumer insights that they can glean from the browsing data.

Peter Muratore
Guest
Peter Muratore
6 years 11 months ago

With retailers looking for ways to increase loyalty, providing WiFi in-store can certainly be a great way to get shoppers to want to return based on their perception of good service. Our research data tell us that over 40% of those using their mobile in stores are using them to read product reviews and to find coupons. These numbers will only grow. So if retailers want to stay up with shopper trends, not offering WiFi is not an option.

Ed Dunn
Guest
6 years 11 months ago

Smart phones can switch to WiFi automatically and save the customer on data rates. If the customer is providing augmented services such as QR code lookup or self-checkout from a customer mobile phone, then there is a no-lose solution providing free WiFi.

Ralph Jacobson
Guest
6 years 11 months ago

It’s a good thing to brag about… if you have it… and if it’s reliable in-store. Otherwise, lay low.

Vahe Katros
Guest
Vahe Katros
6 years 11 months ago
When big smart companies with access to smart people invest in infrastructure, it’s strategic—we know that. When I worked on a project with Melville, the portfolio of opportunities from implementing a wide area network (Hughes) was very detailed. So, what’s going on here? Here are some nuggets: 1. “the use of the iOS apps from both Best Buy and Walmart by over five times both on Thanksgiving and on Black Friday. Not too far behind were Target, Kohl’s, and ShopSavvy. Notably absent from this data was the use of the Amazon application.” 2. Target has put QR codes on top toys3. Walmart is partnering with Mattel4. And this from today’s job posting for Walmart jobs at the silicon valley development location: Mobile devops team is all about frameworks that operate in a high-scale, distributed, multi-tenancy environment. Engineers in this team will begin their engagement by understanding components that make up the mobile.com, one of the highest trafficked and transactional mobile eCommerce web sites in the world. Within the next year a variety of new technologies… Read more »
Chandan Agarwala
Guest
Chandan Agarwala
6 years 11 months ago

Good thing is that accepting the WiFi is at the discretion of the shopper. It is akin to Amazon using web analytics to track shopping behavior online. Or Facebook using likes to endorse product advertisements. Retailers can use the data to provide customized offerings. It can support private label brands promoted by stores.

This data can help to identify lost sales due to out-of-stock products, or brands.

The tracking data can also help the retailers to make the store more friendly to the shoppers. Bottlenecks in aisles and complicated shelf arrangements can be identified, too.

Advantage of WiFi in comparison to the Wireless services used by the shoppers can be reflected in quality of services in terms of availability across the store (telco networks are not accessible in many parts of the large retail stores), and no cost to the shopper. Also, retailers may choose to support laptops and iPads, which can work only on Wifi.

Alexander Rink
Guest
6 years 11 months ago

Internet connection is becoming like air: we need to have it, wherever we are. WiFi is a convenient way of ensuring that shoppers feel comfortable in your environment, with access at all times to the information that they want. One could argue that they could always use their cell phone data plans, but WiFi access tends to be more reliable and faster, even as we evolve to a future of unlimited bandwidth plans.

I literally will consider leaving the store, if I cannot get an Internet connection to get more information on products, such as reviews, before buying. Free WiFi does open the risk that shoppers may showroom, but my view is that they will price compare in any case, and retailers are best off focusing on being right-priced, and making the environment more inviting for the shopper.

John McNamara
Guest
6 years 11 months ago

Call me old fashioned but this is a gimmick most customers and retailers couldn’t care less for.

The only reason I as a customer pull out my cell phone while in a store is to see if I can get a rebate on things I’m already intending to buy.

In countries such as Germany it also makes the retailer liable to illegal music and film downloads, let alone take the customer’s focus away from shopping.

There is a reason why casinos in Vegas don’t have clocks or windows. Maybe they’ll eventually encourage playing slots on a cell phone but in 2012-2013 I think for a store that is merchandised and decorated well, in store WiFi is more a distraction than a service.

Maybe things will be different 5 years down the road, but before a retailer installs WiFi, a mobile charging station would be a much bigger help to the technophiles out there.

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