The New Beacon-omy: How Retailers are Adopting New Proximity Marketing Initiatives
Digital technologies are transforming business in every industry, from social media to mobile to big data to the “Internet of Everything”. This change relies on the combination of digital and physical elements to create new forms of value together. Some have call this phenomenon phygital or digical. And this is what retail proximity marketing together with beacons is doing; marketing consumers at the right place, at the right time, with highly relevant and personalized notifications.
There is no doubt that beacons have become a buzz
–word, 2015 has been crowned by many experts as the year of the beacon. According to Business Insider, beacons will directly influence $4 billion in sales at top retailers in 2015. It expects that number to increase tenfold to about $44 billion in 2016.
These numbers are promising, and many industry experts are of the opinion that proximity marketing with beacons could be one of the most effective tools that can help brands generate higher ROI with ease.
“Beacons may be the most dominating marketing trend of 2015”
So, what are the benefits of mobile beacons for both customers and retailers? First of all customers get highly targeted promotions or additional product information that they are interested in, and retailers can then collect valuable data on their customers’ buying habits. This technology has an enormous potential to enhance the shopping experience, and not just in driving more sales. For example, imagine that customers are welcomed while walking into their favourite store, or VIP customers get automatically identified and assisted according to their preferences. Imagine while walking inside a store, an app on your mobile app is guiding you through the products on offer according to your previous purchases or taste. These examples can definitely enhance the in-store shopping experience and drive more sales sideways, while engaging customers and fostering long-term relationships between the customer and retailer.
But are retailers ready for this? A study by Forrester consulting to Zebra Technologies corporation highlights that 96% of retail decision makers are ready to make changes required to adopt IoT. In fact, we can find many examples of early adopters, some of them top retail leaders like Macy’s, Walmart, Carrefour, Coop or the leading Spanish retail banking Caixabank, among many others.
However, not all the initiatives are enjoying success, and thus retailers need to pay a lot of attention to the challenges that early adopters are facing if they want to be successful in implementing beacons in their stores. Let’s mention some of the challenges: the first barrier is the customer’s privacy concern (don’t start collecting customer data without their consent), the need to generate valuable messages that match customers´ interest, (in contrast to overloading them with irrelevant data), the need to download an app (imagine if you as a customer need to download one app for each retailer whose promos you want to enjoy) or the mobile and bluetooth dependency.
“To Enhance Relationships, Brands Must Translate Value and Foster Trust”
The last barrier to mention today is what we call the “data integration challenge”: without the infrastructure to consolidate the data coming from heterogeneous sources (CRM, website, loyalty program, supply chain, store, etc.) retailers won’t be able to provide a user experience much different than the existing one in digital media. Beacons are one piece of the experimental puzzle, without integration, they will only add to the noise. But when integrated, beacons provide insight from ‘in-store’, from ‘mobile’, and from ‘online’, domains that today are disconnected due to limited integration.
Retailers thus need to be armed with the right technology platform that can help them unify disparate data sources across their organizational silos — a massive challenge we must say — while remaining flexible, with their options open for future challenges.
Have you experienced retail proximity technologies? What do you think from a retailer or customer point of view? Do you believe they will be as disruptive as experts are forecasting?