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Beacon deployments fail to leverage the technology’s full potential

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July 1, 2014

Retailers must not implement beacons for the sake of tech trends alone

Retailers must not implement beacons for the sake of tech trends alone

While a growing number of retailers are embracing beacon technology to deliver hyper-local content in stores, no one yet appears to be leveraging the full potential of the technology by pairing it with existing customer data to guide offline purchases.

Winning the path to purchase is becoming more difficult for retailers as they attempt to angle and predict the ebb and flow of consumers who are now the leaders of omni-channel trends. Location intelligence offered by beacons can tell retailers customer wants and needs in the moment and by pairing this information with customer profiles, retailers can create a holistic experience.

“Beacons have a tremendous amount of potential for any business that is willing to take the plunge, and retailers have barely scratched the surface,” said Chris Losacco, mobile strategist at Punchkick Interactive, Chicago.

“At some point, someone is going to link their customer database with a well-conceived application, offline location mapping, a creative trigger strategy, and a mobile payments network to create the first fully connected offline purchase experience that cycles back to bolster the database from which the prompt originated.”

“There can be limitless opportunities for collecting data and finding ways to apply it towards actionable results that can greatly shape events, retail, and any human-to-brand experience,” he said.

Inspiring new behavior
The most powerful feature of beacons is their ability to deliver the position of a specific mobile device user in the moment.

Macy's uses a surprise and delight function delivered via beacons

Macy’s uses a surprise and delight function delivered via beacons

“Beacons are relatively cheap; you buy 3 for less than $100, and are based on generally accepted technology used by all mobile device manufacturers,” said Hans Willems, chief marketing officer at Blueconic, Boston.

Most marketers are excited about this because beacons grant them the agency to better communicate with individual customers and inexpensively create personalized experiences that guide the purchase process with reviews, offers, information or associate help—something they could not do easily before.

A retailer with a database of consumer information based on browsing habits, past purchase and demographic information cannot harness these valuables once the consumer puts their phone in their pocket.

For example, a department store that knows a 25-year-old consumer has just entered would not want to notify him of a sale on women’s blouses unless historical purchases indicate buying preferences for a significant other. However, the retailer would want to let that shopper know about the sale on men’s suits.

“With beacons, as soon as a customer arrives, we already know who they are and what they tend to like by way of their profile on our app, and can suppress certain triggers for them at various points in their experience,” Mr. Losacco said.

Apps can be configured to ignore parts of a beacon network given a user’s needs, but retailers have to know who they are in order to tailor the experience. If they can add relevant value to a user’s shopping experience, they can disrupt the previously untouchable offline interaction using online tools.

Beacons afford marketers a platform to execute effectively in this space, while tracking the success rate of every single interaction along the way, and practitioners such as Blueconic see the potential for more than just short term purchases.

“In May 2014, Virgin Atlantic launched iBeacons in London’s Heathrow airport to let customers check in without going to a desk,” Mr. Willems said.

“Now, imagine if your flight was delayed and you got a text message offering you a drink around the corner? This is where we get value as a consumer – it goes beyond a transaction and creates an excellent customer experience.”

Building individual knowledge
A recent study by inMarket  found that beacon deployments which complement users’ preferred experiences lead to more in-store usage, brand engagement and app retention.

Over a 30-day period in April-May 2014, 25,000 shoppers using inMarket’s Mobile to Mortar enabled apps interacted with advertised products at an increased rate of 19 times when receiving a beacon message.  Moreover, in-store app usage was 16.5 times greater for users who received a beacon message and those shoppers were 6.4 times more likely to keep an app on their phone, versus those who did not.

The end result is consumers will need to spend less time figuring out what the best purchase decision is, and showrooming will be now an opportunity to convert interest and intentions to purchases while in the store.

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

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

Assuming companies are capable of building in-depth individual knowledge and understanding the consumers individual wants and needs, consumers will experience that the communications with companies will be more relevant and valuable.

They are willing to buy more, become loyalists and refer the brand and its products to others.

“Shoppers aren’t really aware of how this could change the game, just yet,” Mr. Losacco said. “However, in the same way that social media changed how we engage with one another and smartphones changed the accessibility of information, beacons have the potential to be disruptive for the consumer as well as the retailer.”

“It’s been the tact of technology to change how we look at things, and while I don’t expect anything but overt disbelief when beacon implementations start flooding the market, I am confident that once technologists learn how to execute, there will be no turning back,” he said.

In terms of benefits to retailers they can spend their ad budgets much more specifically while becoming smarter in the process. Advertising spend has long been considered a 50/50 proposition in that 50 percent tends to flop, however the real problem is that marketers rarely know which half worked because there is really no way to determine whether someone bought a shirt in-store because of a billboard or a TV ad or a Web banner or an email campaign.

If marketers could actually track every single point of contact and compare the effectiveness with the user’s demographic and past purchase info, they would save money and know where to allocate campaign budgets to affect legitimate upticks in sales.

“The technology is cheap and widely available but it’s also a matter of adoption and reception by consumers,” Mr. Willems said. “Creating compelling individual experiences using beacons is the first step to convince consumers to opt-in and use it.”

Equipped to gather real, live data to inform store layouts, target market penetration, and brand partnerships, retailers can constantly improve using viable information about real consumers and harbor information at an unprecedented rate and without the hassle of validating third-party research or demographic targeting conclusions.

“This can be accomplished with the right infrastructure and execution, and the first company to pull the trigger will find themselves with an absolutely unfair advantage in their market segment,” Mr. Losacco said.

Final Take
Michelle is editorial assistant on Mobile Commerce Daily, New York

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Michelle Saettler is editorial assistant on Mobile Commerce Daily and Mobile Marketer, New York. Reach her at michelle@mobilemarketer.com.

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One Response to “Beacon deployments fail to leverage the technology’s full potential”

  1. Paul Sheedy Says:

    The article just reinstates what we have been trying to get through to retailers, this for the vast majority of retailers is technology for technology’s sake. There will be no impact, not for many years by jumping on the latest technology options in the latest mobile phones, but as retailers keep chasing the next shiny technology they are failing to ask themselves some key questions. In our view those questions are (a) will this really deliver for the majority of my customers and (b) what am I really going to deliver on my bottom line. Reward Technology used these types of questions to deliver the only digital solution that enables retailers to communicate with every single type of mobile phone on the market, with the right rewards, in the right place and at the right time. Our completely closed loop process makes every step of the solution, hassle free for the customer and seamless at the EPOS. Beacon is part of what we offer but we are clear that it is for the tech-savvy, and only part of our roadmap to deliver digital to every one of your customers now.

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