Why Does Nordstrom Offer Free Wi-Fi?
In Houston, just about every foodie bar, bike store, and coffee shop offer free wi-fi. It’s expected. Everyone’s on a mobile device. Everyone’s connected doing something. It makes sense to offer Wi-Fi if you are a Houston business.
In 2012, the retailer Nordstrom started offering free Wi-Fi in it’s Houston locations, and even Home Depot jumped on the bandwagon too.
No one, at least not me, goes to Nordstrom to fire off some emails. If you do, don’t worry we won’t judge.
So, do stores offer free Wi-Fi to be nice?
It turns out that offering free Wi-Fi helps Nordstrom’s profits quite a bit. To understand this, let’s first look at how Wi-Fi works.
How Wi-Fi Works
When you turn on Wi-Fi on your phone, your phone sends out a radio signal to find nearby Wi-Fi hotspots (also referred to as routers). Hotspots let your phone connect to the Internet. The radio signals your phone emits out include a unique code that’s embedded in the phone, called the MAC address. So, whenever you connect to a Wi-Fi hotspot, the hotspot’s owner, let’s say, Nordstrom, can see your MAC address. If they keep your MAC address on file, they can remember you if you reconnect.
Retailers like Nordstrom realized they could track which Wi-Fi hotspots customers were connected to and using that information pinpoint customers locations — within a few feet!
Pretty useful information, right?
Nordstrom can monitor where customers go in the store. They can also discover which days and times are the busiest and adjust the number of salespeople accordingly. It also helps Nordstrom know which window displays, specials, clothes racks are the most effective by how long a customer stays at a specific location within the store.
So, why do companies like Nordstrom offer free Wi-Fi?
It provides BIG data.
If you’re shopping for men’s shirts on nordstrom.com, you could, in theory, get a coupon for men’s shirts as soon as you walk into a Nordstrom store. How? Because Nordstrom has your MAC address on file which they obtained when you requested their free Wi-Fi.
But what about your customers?
Gaining A Competitive Advantage
Love it or hate it, tracking customers with tools like Wi-Fi is profitable. Having this type of data could help stores provide a better shopping experience by getting rid of unpopular products and ensuring there are enough salespeople on the floor at the best times. If stores know how often you came to shop, perhaps they could start offering loyalty programs that would help you out. And the targeted coupons could be precisely what you are looking for at a bargain price.
Whatever you think of Nordstrom’s free Wi-Fi, you’ve got to admit that it’s a pretty shrewd business move.
Does your business use Wi-Fi to gain a competitive advantage?