Customer Tracking

If you want to know where your customers are right now, there's no need to ask. What with GPS cell phones, Internet protocol addresses, Wi-Fi hot spots, and cell tower triangulation, there's plenty of information to go on -- enough to fuel a rapidly growing field of technology that's being dubbed location-based services.

On the Web

Online advertisers have long targeted ads by location, by matching the IP address of visitors' computers with a physical address. But recently, companies have started customizing the content of their websites based on users' locations. "It's really only been a trend within the last year," says Rob Friedman, co-founder of Digital Element, which helps websites glean information from IP addresses. "Companies realize they can determine where the user is coming from and show swimsuits to people in Florida or parkas in Alaska.", a Pennsauken, New Jersey, company that lets customers design their own T-shirts, recently had just such a realization. Since spring, it has customized its website for visitors in different locales, using technology from a Canadian company called Sitebrand. At first, singled out international shoppers, who make up 5 percent to 10 percent of Web traffic, and offered them free overseas shipping on large orders. Sitebrand, which charges a monthly fee starting at $3,000, helps track the customers' geographical locations, but must create the custom webpages. It now has localized pages for visitors from five states and two cities. If people in Chicago visit, they will see a custom greeting next to a picture of Wrigley Field and an offer for free shipping to Chicago. CEO Matt Cohen says the company has seen a 10 percent to 20 percent increase in sales conversions from customers who get the location-based offers.

Some companies are also using IP targeting technology to draw customers to local retail stores. Last year, Ace Hardware began tracking IP addresses. Now, when a customer visits, the company generates maps showing all the Ace stores in a 30-mile radius. "For us, it was about bringing the local store to life," says Dana Kevish, Ace Hardware's e-commerce marketing manager.

On the Phone

As more cell phones include GPS functions, it has also become possible to track customers through their handsets. However, creating location-aware mobile applications that are compatible with multiple cell phones -- and working with all the different carriers -- can be laborious. Even Trulia, a San Francisco -- based real estate site that is well aware of the importance of location, location, location, was wary about investing the effort. "We'd been thinking about doing something in mobile for a long time," says Trulia CEO and co-founder Pete Flint, "but we were a little skeptical about whether it was going to be a popular service." Then, this spring, Flint noticed that several thousand users were visiting Trulia's website from their cell phones each day -- with big spikes on Sunday afternoons. Flint realized the traffic was coming from people making the rounds at open houses or trying to find out about prices in the neighborhoods they were visiting. In August, the company launched new applications for the iPhone, BlackBerry, and Dash, a GPS device for cars. Now, with one click, users can find all the open houses around them -- wherever they are standing, without entering their location. On the day it launched, Trulia's free iPhone application was downloaded more than 6,300 times.

Companies can sometimes reduce development time for mobile applications by using a platform designed to work on multiple devices. Zipcar, a car-rental service headquartered in Cambridge, Massachusetts, recently decided to make it possible for its members to book reservations with their mobile phones. But instead of building applications for different carriers and handsets, Zipcar designed a widget for uLocate's Where application, a mobile platform that has already been programmed to work on a range of GPS cell phones from various carriers. Where launched for the iPhone 3G in July, and 335,000 people downloaded the free application in the first month, attracted by a selection of about 100 widgets, including Zipcar's. Now, without ever having to enter their location, Zipcar's customers can use their iPhones to find the nearest available Zipcar location and make a reservation.

On the Street

Some companies are using tracking technology to analyze customer foot traffic. Sense Networks, based in New York City, uses GPS information from mobile phones and taxicabs to watch how people move through a city. Using these data, companies can see things like where customers go before and after they visit a store. Sense Networks launched its service for San Francisco in August and hopes to offer national data next year. Another company, Path Intelligence, based in the United Kingdom, tracks customers' movements through shopping malls by using signals from their cell phones. "It's the 21st century equivalent of market research," says Sharon Biggar, the COO of Path Intelligence, which plans to expand to the U.S. next year. The technology helps companies understand how people move through shopping centers; this allows the companies to make better decisions about where to put what. "They're very interested in toilets at the moment," says Biggar. "Traditionally, they're placed close to the exit, which might make customers think it's a hassle to go back into the mall."

Certainly, some customers will bristle at the idea of their movements being recorded. Path Intelligence and Sense Networks say they protect privacy by tracking only users' locations and not cell phone numbers or other personal data linked to individuals. But more technology often results in less privacy, especially when there's money to be made using it. "In theory, eventually you could show ads that were extremely local -- like down the street," says Greg Sterling, founder of Sterling Market Intelligence, a research firm that covers location-based advertising. "The fantasy is the right ad at the right time and place. We're not there yet, but we're moving toward it."