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Chow Tai Fook beacon program generates more than $16M

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April 14, 2015

Chow Tai Fook's mobile-optimized Web site.

Chow Tai Fook’s mobile-optimized Web site.

Chinese jewelry retailer Chow Tai Fook leveraged a combination of beacon-supported location and proximity marketing with the WeChat mobile text and voice messaging communication service to generate sales of more than $16 million, pointing to the potential for retailers and brands to accurately communicate with customers in the physical space through their phones.

The jewelry brand worked with beacon-provider Sensoro to deploy the low-energy, low-cost transmitters in 237 Chow Tai Fook stores in four cities in China through Tencent’s WeChat. The campaign, which distributed e-coupons to users who had activated a “shake” feature on phones in stores that had installed beacons, highlights the advantages of working within an app instead of requiring consumers to download a retailer’s brand application.

“This program did an excellent job of combining location/proximity with an application Chinese consumers are already using everyday, WeChat,” said Matthew Ramerman of Vehicle. “Instead of requiring consumers to download the retailer’s brand application, Chow Tai Fook worked within an app their consumer were already using, layering in proximity prompts derived from beacons near the point-of-sale.

“Proximity and location are major factors in mobile program success,” he said. “However, beacons’ effectiveness is limited to the reach of the paired application. The challenge for retailers is to make a proximity connection that has significant enough reach in order to drive meaningful return for the marketing investment.”

Proximity icon
During Chinese New Year, from Feb. 6 to March 13, 237 stores in Beijing, Shanghai, Shenzhen and Guangzhou deployed beacons. The coupon was delivered to customers using a “shake” feature on their smartphone.

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Mobile Web home page.

Next, the users launched WeChat and entered a shake page. When the user neared a beacon, a proximity icon appeared in the bottom left corner. When the customer shook the phone, a coupon button with the jewelry chain’s icon appeared. Then, by clicking the button, the discount page appeared.

During the program, 32,712 customers participated, performing the shake action on average 4.76 times for a total shake count of 152,325. Among users, 37.2 percent performed the action once, 37.2 percent two to four times, 15.6 percent about nine times, 9.9 percent between 10 and 99 times, and the remaining 0.1 percent more than 100 times.

The jewelry market is an interesting testing ground for beacon programs. Many customers first do their research online, then go to a store to try on or view a product, and might go back online to continue their research before completing the purchase.

Bridging gap
Beacons can help bridge the online/offline gap, by continuing the dialogue via communications based on preference indicated through proximity technology.

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In-app interaction beats downloading, for customer convenience.

“Unacast works with Sensoro as well as most of the bigger proximity companies worldwide, so we are not surprised by the positive results,” said Thomas Walle Jensen, CEO of Unacast, a global media platform which allows online retargeting based on offline data. “In fact, we’re seeing these kinds of response rates globally in the US and in Europe too.

“What is exciting is demonstrating the huge power of this approach when done well at the right locations,” he said. “Beacons and proximity are more than just a new technology. It represents the first time retailers and brands can accurately communicate with their customers in the physical space through their phones, measure the effect and adjust accordingly.

“The implications of changing several hundred years of unmeasurable and imprecise customer communication are bound to be substantial,” he said. “And this is just the beginning.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York

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