The pros and cons of in-store WiFi

This week, my CBC tech column is all about in-store WiFi, as predicted by Deloitte Canada. The column is now up at cbc.ca/technology, and reposted below for posterity. You can listen to the audio below, or download the MP3. [audio:http://blip.tv/file/get/Dmisener-20110118_misener_instorewifi_1596697361.mp3]

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Canadian stores are starting to offer free WiFi to make it easier for customers to comparison shop, but people need to be aware that open wireless connections come with security and privacy issues.

This happens to me all the time: I’m browsing through a store, I see something I like, and I start to think about buying it. But then, from somewhere in the back of my head, a tiny little voice shouts, “Don’t buy it, Dan! That book/DVD/shirt/sports car is probably cheaper at another store. It’s definitely cheaper online. Plus, free shipping! Don’t do it, Dan!”

Then I leave the store, empty-handed. Sound familiar?

This morning, Deloitte Canada released a new report that talks about one tactic retailers are taking to combat that little voice in my head. In its annual Technology, Media, and Telecommunications Predictions report, Deloitte says there’s going to be a real trend towards free in-store WiFi to help customers comparison-shop. Rather than wonder about prices elsewhere, people will be able to use a smartphone or other mobile device to compare prices.

It seems a bit counter-intuitive. If I run a store, why on Earth would I want to help my customers compare my prices to the competition?

Retailers have realized that customers are going to comparison-shop, whether the stores like it or not.

To find out, I talked to Duncan Stewart, who co-wrote the Deloitte predictions report. He told me that until fairly recently, retailers didn’t want their customers to comparison-shop using mobile devices. But now, retailers have realized that customers are going to comparison-shop, whether the stores like it or not. And retailers would much rather have you do that research in their store, where you’re actually in a position to purchase.

When it comes to the bottom line, Duncan’s research suggests that “when shoppers do in-store comparison shopping, the likelihood of purchasing appears to go up, not down.” In other words, even if I find out I can get the shirt I want for $5 less across town, I might be willing to pay that extra $5 if it means I don’t have to spend 25 minutes driving there. Or, if the store has a price-matching policy, I might ask for it.

Right now this trend is more prevalent in the U.S. than Canada. Stewart gave me a few examples from south of the border, at both ends of the retail spectrum. Sam’s Club (think Walmart’s version of Costco) has announced plans to roll out in-store WiFi, as has Nordstrom’s, an upscale department store chain.

For retailers, I believe this has the potential to be a great source of consumer research and insight. If I ran a large chain of stores offering free WiFi, I could monitor and track what people do with that WiFi. What sites are they going to? How long do they spend on a competitor’s website? What types of products are they looking for? As a store owner, I could respond to browsing behaviour, offering coupons to customers who found better prices at a competitor’s site. From the store’s point of view, I can definitely see how that would be attractive.

But as a consumer, I find the potential for tracking and surveillance just a little bit creepy.

We’ve certainly heard a lot of stories recently about the dangers of unsecure, open WiFi. Activity can be monitored, and email and social networking accounts can be hijacked. All of the risks associated with open WiFi in coffee shops and airports and hotel lobbies apply to open WiFi in retail stores, too. Personally, I wouldn’t do anything on a store’s WiFi connection that I wouldn’t want that store – or the whole world – to know about.

There are risks on the retailer’s side, too. Stores probably don’t want customers using their WiFi to download illegal content, deface Wikipedia pages, or send threatening messages to the Prime Minister. Of course, stores can block access to certain sites and services, but this is the kind of thing that really needs to be closely monitored.

So, the next time you’re in a store, check and see if there’s WiFi available. I would love to hear about places across Canada where this is happening. But if you find open WiFi, be careful. Connecting to DANS_BARGAIN_BASEMENT might be handy to do some in-store comparison shopping, but I’d be very, very cautious about logging into your email account or your Facebook profile while you’re at it.

Now, if you’ll excuse me, I’m off to the mall.