Foursquare’s Analytical Pivot: Retailer Data

Foursquare is making the most of data acquired from social media to apply to retailers. Learn more about this organizational pivot here.
Founded in 2009, Foursquare has built a solid reputation as everyone’s favorite location-based check in app. For users, it’s positioned as a way to keep track of the many places you go in a city and check out where your friends and peers are going too. It’s a perfect example of the so-called quantified self, sharable with friends.

Foursquare the Physical Representation

However, that may be changing. In a not entirely surprising move, Foursquare just announced new functionality for a different type of user: brands and brick and mortar stores. With the release of Foursquare Analytics, it looks like the company is making a play to be, as Fast Company put it, the “Google Analytics of the physical World,”.
The feature will be a dashboard for brands and retailers to track their foot traffic, and it will be available to retailers of all sizes. As TechCrunch reported, “Retailers will be able to use the dashboard to see foot-traffic data across metrics like gender, age and new versus returning customers — on a national or citywide scale. Retailers also can compare their foot traffic against a set of competitors and their category as a whole.”

Organizational Pivot

To hear Foursquare’s CEO Jeff Glueck say it, the decision to roll out the analytics platform came from a classic case of the Silicon Valley pivot. As he wrote in a Medium post:
“Oftentimes a company sets out to solve one particular problem and builds technology to do it, and then later realizes that the solution has much wider applicability. That’s what happened here. We realized that being able to recognize when phones walk in and out of 93 million public places worldwide created an incredible data set for aggregate and anonymous analytics. It turns out, this capability can solve many business problems outside of our own.”

Risk vs. Reward

On a business level, it makes sense that Foursquare has made this move; in fact it’s likely they had planned to make this move all along. After all, there is a massive business opportunity to be found from “leveraging its database of check-ins at nearly 100 million public places.” But a question does arise when you think about whether Foursquare’s 20 million users are going to be happy about this pivot. They may have checked in more than 2 billion times, but they may not be thrilled about those check-ins being used to sell them more stuff.
The truth is, Foursquare was selling analytics data to major retailers already—it was just doing so on a case by case basis. Now that it’s opening up that capability to more brands, it remains to be seen if users will resent the move and leave the platform en masse. If that were to happen, Foursquare Analytics would suffer as it wouldn’t have a large database to draw from, rendering its core offering essentially worthless. And while it’s true that only the data from users who have opted into always-on location sharing can be used, there’s no guarantee this pivot won’t cause those users to switch that permission off.
As Engadget wrote, “The company relies on users to opt in to its granular location data services, so the app must have enough interesting features to motivate folks to install and use it. At the same time, it has to have rock-solid security and anonymization features, as it essentially knows your precise location at any given moment.”
For Foursquare’s part, the company insists the data is “all aggregated, anonymized and on a monthly basis.” But public trust in this kind of “metadata” has been majorly harmed by past incidences and users are becoming more protective of the permissions they allow in general. So, while Foursquare might have a solid business proposition to offer brands and retailers, it remains to be seen if they will alienate their core usership in the process of rolling it out.

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