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How some beacon programs are missing the mark

August 11, 2014

blog_ibeacon3_optMost marketers are not ready today to deliver the kind of real-time contextualization necessary for beacon engagements that customers will find valuable, according to a recent brief from Forrester Research.

Interest in beacon technology among retailers is huge, according to the brief, “The Opportunities And Challenges Of Beacon Marketing.” However, marketers should be careful to not overhype the opportunity and forget to put the customer at the center of their strategies.

“The biggest mistake that some marketers are making is using beacons as a technology gimmick or for the ‘gee whiz’ factor,” said Maya Mikhailov, executive vice president and co-founder of GPShopper. “Some retailers are using beacons solely as an alternative form of couponing.

“While delivering relevant deals upon your customers visit is certainly a viable use for beacon technology, couponing is just a small part of a much larger initiative when implemented correctly,” she said.

“Marketers should think beyond deals and discounts and focus on engagement and personalization.”

Avoid advertising messages
The reason why interest in beacons is so strong is because of the technology’s ability to influence shoppers at the point-of-sale, to transform the in-store experience and bridge the physical, digital divide.

However, many marketers are still confused about what they are, according to Forrester. There is not a lot of intelligence in the beacons themselves. Instead, they are a piece of hardware that communicates location information that can be interpreted by mobile applications.

To use beacons intelligently, marketers should resist temptations to simply push advertising messages and instead look for ways to contextualize their offerings in real-time, something that could be a challenge for many marketers still.

Zatarain’s pushes dinner suggestions to customers when in-aisle

Limited reach
In order to use beacons effectively, marketers should keep in mind that reach is still limited today. With implementation reportedly still complex on Android, this means that reach is concentrated around iPhone users.

Also keep in mind that beacons are just one of several technologies that facilitate proximity marketing. Near-field communications and beacons can be complementary, with beacons acting as a push mechanism while NFC tags are a pull mechanism.

Beacon programs should be developed with customer needs as the focus. This means making sure data and privacy policies are clearly articulated.

macys beacon_opt

Additionally, experiences need to contextualized and personalized based not just on location but also by taking into account customers’ preferences, tastes, past purchases and motivations. Integrating location data from a beacon program into campaign management, CRM and marketing systems can facilitate this.

Forrester also recommends marketers work with experienced vendors to launch pilot programs.

Growing influence
Marketers have quickly embraced beacon technology this year and are using it to engage consumers in their mobile moments via in-app interactions. Leveraging the technology, marketers are able to identify customers in a specific location through beacon transmitters, enabling them to initiate a conversation by sending real-time content, services and promotions.

Beacon technology is also being used to improve the customer experience beyond a simple marketing promotion. For example, hotel chain Aloft is testing beacons to eliminate the check-in process while malls, airports and exhibition centers can provide mapping to guide people through their venues.

One of the other ways that retailers can leverage beacons is by tracking users through anonymous and aggregated location data to gain meaningful insights into customers’ behaviors in the real world.

Beacons can also help marketers attribute mobile marketing to offline performance by matching back data on mobile ads and in-store purchases.

The role of beacons is likely to grow in the future.

“This year, many major retailers will roll out pilot programs in their flagship stores, but they’ll still be in the experimental stage,” Ms. Mikhailov said. “Marketers are still gathering key data points and identifying ways to boost engagement and in-store sales.

“By Holiday 2015, beacons will be everywhere and retailers will be doing amazing things with their well-strategized programs,” she said.

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York

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