Philips offers LED-based location technology as a monthly service

AMSTERDAM - So you've heard about these new lighting-based indoor positioning systems that might help engage customers inside, say a retail shop, a rail station, or a museum; but you're not sure how you might pay for one?

Lighting giant Philips has an answer: buy it as a monthly service.

That's how Philips is structuring 'visible light communication' (VLC) installations such as the one in northern France where a massive Carrefour hypermarket is using LED ceiling lights to beam location information to smartphones and thus direct in-store shoppers to products and discounts.

LED-based indoor positioning systems send invisible codes to a smartphone's camera that correlate with the the LED's location and thus with the location of a particular product or offer. The 8,000 square metre Carrefour location in Lille, as well as two Target retail shops in the US, have recently pioneered such systems. Carrefour is tapping Philips, while Target is deploying technology from another vendor that it so far declines to reveal.

Retailers and other implementers would have to purchase LED lights that are equipped with the ability to transmit data. In Philips' case, the lights themselves cost virtually the same as LED lights without that capability, Philips business leader for indoor positioning systems Gerben van der Lugt told a group of journalists here late last week.

'Our business model is to sell this to retailers as a montly fee for the service,' he said. 'It's a recurring fee. So if they install the light, if they don't want to use it (the location feature) they still have good light... As soon as they activate the service, we will start charging them for the service. And if they want to stop with it, we stop charging.'

While Philips provides the location technology, each retailer or end user would develop their own smartphone app, which customers would download and use to access location-based services. Many retailers already have apps that could easily incorporate new features based on location.

Retailers also have the option to tie customers' shopping history and loyalty cards into the system and thus help deliver on-site information tailored to a particular customer, van der Lugt said. For example, a shopper who purchased pasta the last time in the store might receive a ping for promotions on sauce, or might get a reminder that he or she might once again need pasta.

But such tie-ins to personal data would only happen if the consumer opts in via the retailer, van der Lugt said. Such data would probably travel via WiFi or mobile phone networks, and not through the lights (Target has visions of embedding sensors in customers' homes that detect when supplies are running low, and then reminding the shopper in-store).

Like many new features for smartphones, the Philips VLC system at the moment eats noticeably into device batteries. In the course of about 12 minutes during van der Lugt's demo, the battery on his phone declined from around 95 per cent full to around 84 per cent.

'We're looking into battery drainage,' van der Lugt said, noting the drainage is comparable to what happens when people use phones for outdoor GPS-based location services, and that he expects improvements soon. The drainage relates both to processing power and the phone's use of its camera to receive the signals.

Philips claims that its system can pinpoint a product's location inside a store to within 10 to 30 centimetres. Its benefits will include reducing the need for staff to guide people, improving conversion rates on promotions, boosting cross selling and engendering customer loyalty, van der Lugt said.

Other lighting-based indoor positioning system vendors include Acuity Brands, PureVLC and GE, which claims to have two installations in Europe and two in the US, but which will not identify them publicly.

The technology has enormous potential not just in retail, but wherever users can benefit from indoor positioning (GPS technology has a reputation for being unreliable indoors). Museums and the rail industry , for example, are considering it.

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Photo is  a screen grab from Philips Carrefour video

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