Beacons - What Consumers Want
By: Jenn Reichenbacher
August 25, 2014
Beacons – we’re starting to hear more and more about them, especially for those in marketing, retail and payments.
What are they?
Beacons are simple, affordable devices that retailers and/or business owners can place within their respective stores, which enable wireless communication with customer smart devices. Using Bluetooth (BLE) technology, Beacons can detect visitors as they enter a retailer, for example, and immediately communicate with them.
Communications can range from promotional offers, discounts and coupons to loyalty program updates to personalized shopping or requests for sales assistance.
Beacons can also ‘track’ information and collect data on a customer’s activities as they move through the store, helping retailers deliver a more personalized and relevant experience in the future.
Like much of the mobile technology making its way into the shopping experience today, I feel that Beacons definitely offer value. I mean, it would be great to walk into a store locally and receive a notification on my smartphone with an exclusive discount or offer.
What value, especially if it’s for a specific product or service that I’m interested in buying. Personally, relevance is key, especially considering that the vast majority of the advertising messages I receive on a daily basis (some 5,000 per day) are completely irrelevant and uninteresting to me. In this way, Beacons are appealing to me as a customer.
On the other hand there’s the data collection. Even with the understanding that data equals knowledge equals relevance (something I value), there’s an element of information collection about me and my shopping habits that feels creepy. Will these all be permission based or will some businesses simply be able to track my personal habits because I have BLE enabled on my smartphone?
And, there’s the security, and privacy. BLE, while widely used in a variety of today’s smart devices from iPhone to Android, is still unconfirmed as a secure medium to consumers. In fact, a recent article on eMarketer.com, 51 percent of respondents surveyed noted that privacy was their number one concern around mobile, in-store location tracking. And, other concerns focused around the quantity of messages received along with relevance.
On the other hand, the same survey from PunchTab, revealed that 88 percent of those surveyed would consider coupons or special offers as acceptable uses for mobile, in-store tracking, followed by a shortened check-out time (72 percent), alerts around sales on products the customer is interested in (69 percent), and status updates on a loyalty or points program (58 percent).
In the end, early adopters of Beacons, or mobile, in-store location tracking, will be those consumers that value offers and discount potential over privacy. Of course, if the experience doesn’t live up to expectations, retails should expect a quick exit, even from their ‘loyalists’.
In order for Beacons to gain traction quickly, the businesses using them will need to remain focused on relevance and impact. If not, Beacons will become just another advertising medium, delivering irrelevant and non-impactful messages to customers who really aren’t interested.
By Lisa Cramer, InReality
Beacons. Last year they dominated the media waves. This year they will start to dominate the store, driving loyalty and sales. Why? As customers enter stores, smartphone in hand, beacons offer a low-cost solution to sending messages or prompts to these mobile devices, giving retailers and brands an irresistible opportunity—the ability to influence consumers and their path to purchase.
In fact, according to Business Insider, beacon-triggered messages could directly influence up to $4.1B of the total U.S. store sales this year, with that figure growing to $44.1B in 2016 (percent of total U.S., store sales). And, with shopping apps increasing more than any other mobile app category at an rate of 174 percent in 2014 (Flurry), the foundation for successful beacon implementations has been laid.
So how can you use beacons to increase sales and customer retention this year?
Here are 3 ways:
1) Enhance Success of Promotions/Coupons
Over the years, coupons have had a tremendous influence on overall sales volumes. In 2013, coupons drove $510B in retail sales. And, while these were coupons of all types, mobile coupons in particular have become the largest segment of the coupon market influencing sales volume.
So how can beacons help? As a customer approaches a certain product or even as they approach a store, the beacon can wake up the mobile app and present a personalized coupon for that specific product or for some in-store promotion. Additionally, if tied to shopping cart technology, a consumer can be presented a coupon when approaching a product in-store which they might have abandoned while shopping online (also creating that omni-channel experience).
2) Enhance Loyalty Programs
Beacons can also help to increase the value of loyalty programs. Through special offers and product insights only available to loyalty members, beacons will enhance the success and stickiness of these programs. And with loyalty, in theory, comes customer retention and even customer advocacy, The jury is still out on how much loyalty programs really affect customer retention, but the more beacons can increase the usage and improve the experience of loyalty programs with brands and retailers, the more likely the customer will stay loyal.
3) Implement Proximity Marketing
Proximity marketing refers to the ability to send marketing messages/advertising to consumers based on their location in-store or proximity to a product or department, made possible through beacons. The more specific a marketing message is to an individual (personalized), the more effective it is. According to JiWire, 57 percent of customers are more likely to engage with location-based advertising. Macy’s is one example of a retailer already using beacons to send personalized deals, recommendations and rewards to customers based on proximity marketing.
In 2014 we heard a lot about beacons and their retail potential. But, 2015 appears to be the year beacons will start to make an impact in retail. According to Swirl Networks, nearly 75 percent of customers who received beacon-triggered messages said it increased their likelihood of purchasing in store. And in the same study, it was also found that 61 percent of customers who received beacon-triggered messages said they would visit the store more often. The reality is, the use of beacons has already proven to increase both sales and customer retention, and retailers and brands alike will soon start their deployments. Is it time to figure out your approach?
