How to Securely and Profitably Leverage In-Store Wi-Fi

Mobile technology is changing the way we do business. Consumers are constantly connected, literally inseparable from their phones, laptops and tablets as they crave an incessant fix of online interaction. This wireless culture presents businesses with new opportunities and challenges -- but many convenience store owners and operators are trying to decide exactly how to leverage and capitalize on their customers' reliance on mobile devices.

There are numerous factors to consider, from objectives and resources, to operations and infrastructure, to everything in between. The current landscape of convenience retailing also plays a large part in this decision-making process. As c-store operators steadily move toward integrating foodservice operations into their locations, they are presented with various opportunities to tap into mobile to further connect with their customers.

While most of the industry chatter has focused on mobile payments, mobile wallets and mobile applications (apps), which are certainly worth evaluating, Wi-Fi networks deserve their fair share of attention due to their enormous potential to create value for c-store operators and their customers.

If You Build It, They Will Come
Getting customers in the door, or to the pump, is often a primary challenge for operators, especially in light of increased competition, rising fuel prices and narrowing margins. Given these circumstances, the most successful operators are always on the offensive, continually evaluating their service and product offerings, and improving them whenever possible.

The blending of foodservice operations into traditional c-store environments is a perfect example of the type of innovation that increases customer convenience and operator revenue. Offering customers Wi-Fi access is another. While common at hotels and foodservice establishments, this is a fairly new concept for c-stores. By catering to the customers' need for connectivity by providing Internet access, operators can create another point of differentiation to not only lure customers away from their competition, but also increase the amount of time they stay at their location while grabbing a sandwich or smoothie.

A Gateway for Customer Loyalty
Offering Wi-Fi connectivity is more than enabling customers to get online -- it is a valuable gateway for fostering customer loyalty.

In order to gather the necessary customer data, it is important for operators to require customers to sign up for Wi-Fi access, even if it is offered at no charge, or at least be sure that they can capture an Internet Protocol (IP) address and some identification so they can be recognized when they return. By asking customers to provide basic information, such as their names and e-mail addresses, and register their preferences for e-mails and/or text messages, operators can lay the foundation for building more meaningful relationships through ongoing communications.

To encourage Wi-Fi sign-ups, operators should consider offering an additional incentive for registration, such as a coupon for 10 percent off their in-store purchase. Another value-added option is to have Wi-Fi users' browsers default to a website that features deals and coupons they can redeem in-store or at the pump.

This cursory step sets groundwork that can be expanded upon through the integration of traditional loyalty programs. Equipped with customer e-mails, cell phone numbers and opt-in permissions, operators can trigger targeted marketing campaigns designed to increase foot traffic or encourage specific purchase behaviors.

These loyalty and marketing functions can also be consolidated into a mobile application with additional features such as mobile payment capabilities, push notifications, the ability to check and compare gas prices, and more.

Beyond these tactics, new retail analytics intelligence is taking customer loyalty to new heights. This next-generation technology provides more insight into shopping behavior and buying patterns than ever before. When a customer is connected to the store's Wi-Fi network, operators can determine what apps they are using, what websites they are visiting and what they are doing there, all while comparing that activity with sales to formulate an action plan to encourage specific activity.

For example, if customers are frequently comparing the cost of an item at a retail location with prices on Amazon or Google and ultimately do not buy the item, operators may glean that their pricing is not competitive with online sites. To address this and drive sales, the operator can adjust prices on certain items or offer customers coupons to account for the difference.

Infrastructure Strategy & Security
While offering customers Wi-Fi clearly has its benefits, it is hardly as easy as setting up a Wi-Fi router and calling it a day. The network needs to be structured and managed strategically for operators to maximize its value and avoid dangerous pitfalls.

First, bandwidth issues are common as Wi-Fi networks frequently serve double duty, being used by operators and their staff for day-to-day operations, as well as by customers for their personal use. Networks are also frequently abused by "bandwidth hogs" that slow the system down and "poachers" who are not actually customers but are physically close enough to connect to the network.

Second, security weaknesses can pose a host of threats. One of the most common Wi-Fi schemes is called a "man in the middle attack" where hackers set up a Wi-Fi network designed to trick customers into thinking it is the store's network, then capture and exploit their sensitive data. Failing to protect against attacks like these not only puts customers at risk, but also risks the business' reputation.

These are just a few of the primary considerations to address when implementing a Wi-Fi network, but others abound that depend on the specific nature of each location. For this reason, many c-stores and other businesses are choosing to outsource the management of their network services. With advanced technology, third-party providers can cost effectively help with network segmentation, data security and network monitoring.

Looking Forward: The Future of Wi-Fi
As with any investment that specifically affects customer experiences and the balance sheet, being diligent with research and building trust with a Wi-Fi or network service provider will help c-store operators make the best decisions.

Wi-Fi standards are changing frequently, and there will soon be offerings supporting one gigabit per second throughput. Additionally, cellular off-loading -- wireless carriers off-loading their cellular network onto carrier approved, local, high-throughput, in-store Wi-Fi network capacity -- is also becoming a point of discussion with the major carriers.

The final determination of market direction is still undecided, but if c-store operators are prepared with the latest standards while having a platform and an internal network that are flexible and scalable, that would improve their position for revenue sharing with the carriers.

Michael Youngkin is senior director of network solutions for Heartland Payment Systems, the nation's sixth largest payments processor and provider of electronic payment and managed network solutions for petroleum and convenience store operators. For more information, visit www.heartlandpaymentsystems.com and www.SmartLinkPro.com.

Editor's Note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.