Traditional commerce is undergoing unprecedented change due to, among other reasons, consumers using smartphones nearby and inside physical stores to comparison-shop brands, look up product availability, compare features, select options and more.
While online retailing has become mainstream, monumental growth can be achieved through point-of-sale digitalization and connectivity. Despite only accounting for 10% of total ecommerce sales, mobile technology influences one trillion dollars (!) in transactions, including $689 billion in the United States alone, according to Deloitte Consulting.
The insights in this article are taken from a keynote presentation by Daniel Dreymann at the latest Digital (in) Store show in Paris as part of Retail Week.
Mr. Dreymann is an expert in connected commerce, m-commerce and beacons and gave a presentation about the use of mobile and beacons in POS’s in the United States.
Beacons lighting the way for localized experiences
An increasing number of retailers are adopting marketing strategies that are rooted at the local level to create localized experiences. In giving freedom to operate to store managers, they increase business agility and are able to test one-off, localized promotions, such as campaigns that tap into hyper-local news, such as a local team winning a big game the same day of the promotion. This way, they build strong, fresh and real-time connections with their customers and achieve more personalized and targeted marketing objectives.
Dreymann mentioned the use of bluetooth beacons and GPS by McDonald’s. The brand used the technology to push notifications to residents of the Seattle area with messages cheering the Seahawks during the Super Bowl. It used the company’s mobile app and Surprise Alarm app, which the brand uses to publish different content every day – a proverb, a coupon, a song on iTunes, a joke, a chance to win $500, etc.
Another case Dreymann highlighted, involved the Charlotte Russe clothing retail chain, which leverages FOMO (Fear Of Missing Out) to encourage its customers to keep their smartphones’ bluetoothon on at all times . This results in 90% of the customers using the app activating bluetooth and receiving notifications sent via beacons.
The range of use cases that are enabled and supported by beacon technology is wide, including for example:
- Welcoming customers entering a store or a specific area of a department store or venue;
- Retargeting customers online via email upon certain conditions, for example having visited a fitting room but not having completed a purchase in the store;
- Sending a push notification when in the vicinity of a store if an online cart was previously abandoned;
- Redirecting customers waiting in a busy queue to a larger store or a less-busy cash register before they put down their baskets and leave;
- Testing a new concept during actual shopping experience, asking panelists to answer questions as they make their way through the various areas of the store;
Some of the most dynamic and innovative companies using beacons include: Sephora (using beacons to pinpoint customer preferences), Westfield and Simon Property Group, Macy’s (sending offers to customers as they enter the store and helping them to find their way around the store), Walgreens (linking its customers’ prescriptions to the Walgreens mobile app and steering them towards the optimal production options), McDonald’s (if customers stay in the restaurant for over 15 minutes they get a coupon for a coffee).
How beacons work
A beacon is a BLE (Bluetooth Low Energy) transmitter with an average range of 25 to 40 meters. While beacons can transmit data, they cannot receive data. Therefore, beacon technology per se does not pose a threat to users’ privacy, to the extent that there is no way for a beacon to “know” if a user is in the vicinity. Beacon chips are packaged are available in a variety of sizes. The largest and most durable beacons with the best range are designed to be used outdoor. They track users in the proximity of the store and use the brand’s apps to entice customers to enter the premises, by highlighting in-store events, a deal-of-the-day promotion, the availability of new limited-edition products, and so on. Medium-sized beacons with shorter range are typically installed in the various store departments so that customers can be informed about a specific product they are in the vicinity of. The smallest beacons are used near cash registers or fitting rooms.
There are several advantages to using in-store beacons:
- Smartphones receive the signal bluetooth signal even if the brand’s app is not open;
- Transmitters only detect customers that are in the store or within its vicinity;
- They pinpoint location with much more accuracy than GPS;
- They consume very little energy with a single battery lasting up to 24 months;
- Beacons are cross-platform and compatible with iPhones as well as Android and Windows devices.
Implementing and deploying beacon technology
Generally speaking, to ensure the beacons can be used as part of a localized marketing strategy, in most cases the consumer must first complete three actions:
- Install the brand’s mobile app;
- Activate push notifications (or not have them disabled);
- Activate Bluetooth.
It is therefore important to create and advertise incentives to customers to meet the three conditions using for example in-store displays or with email campaigns and digital loyalty programs or prompts from the store sales staff.
It is also possible to combine beacons with other solutions such as payment terminals to calculate ROI easily in terms of converting visitors into buyers or combine them with CRM and social profiling tools to conduct even more personalized omnichannel marketing actions based on a customer’s purchase history, online activity and social media interactions.
Finally, successful companies put the store manager and staff at the center of their in-store mobile and beacon strategy. In order to raise awareness about the use of this new technology, it is important to involve in the strategy, planning and execution process those who deal with customers on a daily basis. Often they are the ones who can generate the best ideas to grow foot traffic during sales, pop-up events, etc.
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