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What Every Retail CMO Should Know About Beacons and Proximity Marketing

What Every Retail CMO Should Know About Beacons and Proximity Marketing

Have you ever wished it was possible to personalize, like… really personalize the experience for every shopper coming through your doors?

Would you like to personally invite passers-by to enter your premises, address them by name and appeal to their consumer impulses?

If so, beacon-driven proximity marketing is one act you’ll need to get in on, because it offers a way to connect with shoppers on a whole new and deeply personal level.

Time to Take a Closer Look at Proximity Marketing

Bluetooth Low Energy (BLE) beacon technology is one of the latest and most innovative trends in business-customer interaction—and one that epitomizes what the Internet of Things (IoT) is all about. Sometimes billed as the indoor answer to GPS, Bluetooth beacons are really all that and more.

While proximity marketing is still in its infancy, the combination of in-store beacons and a new genre of contextually interactive apps is beginning to connect mobile users even more closely with the environment around them.

For retail enterprises, beaconing, as it’s becoming known, offers a myriad of marketing possibilities and practically useful functions. It’s hardly surprising then, that some of the world’s leading retail enterprises are sitting up and taking notice of this prime example of the IoT in action.

A Welcome Approach to Improved Profitability

Indeed, according to a report by Business Insider, the end of 2018 will see 3.5 million BLE beacons operating in US retail business premises. However, this figure can be even higher if word gets out that small and medium retail enterprises can benefit just as much as the big league players like Lord & Taylor and Macy’s.

US Beacon Installed Base

Source: THE BEACONS REPORT: Growth Forecasts For The Most Important Retail Technology Since The Mobile Credit Card Reader

You don’t have to be a mega-retailer to implement a proximity marketing strategy. In fact, it seems BLE might be especially good news for small to medium-sized retail companies, which, according to the 2017 Proximity Technologies in Retail report, can expect to achieve more than 350% return on investment in beacons and custom apps.

Getting a Sense of Beacon Benefits

As a result of web and mobile app development using proximity technology, personalized alerts can be pushed to anyone coming into the operational range of beacons, which are simply small, unobtrusive wireless sensors. These sensors can be located anywhere inside a retail store, shopping center, or mall.

Once these diminutive beacons connect with shoppers’ devices, they can awaken mobile apps or even activate digital wall displays to tempt the device owners with information tailored to their interests and preferences—all after welcoming them to your retail outlet as if they were long-standing customers.

In fact, the beacons are so small that they can be placed right in the midst of displayed merchandise. This is important, because apart from personalizing the shopping experience, beacons can detect where consumers are located and direct them to displays which may be of interest.

Customer Experience Starts Outside the Store

With an effective signal transmission range of up to 70 meters, navigational guidance can even be provided to shoppers outside your store, perhaps in the concourse of the shopping mall where your outlet is located.

Once shoppers are inside the store, beacons and mobile apps continue to work for your business. For example, as shoppers come into proximity with beacon-equipped displays, they can be presented with product descriptions and promotions to encourage them to stop and take a close look at what they might otherwise walk straight past.

Beacons use low-energy Bluetooth signals to communicate with any smartphones in range and are equipped with temperature and motion sensors. They can be attached to walls, furniture, and even to retail inventory. Apps can be built to respond to beacon signals in just about any way you might imagine.

Custom Apps are a Current Constraint

As it stands right now, taking advantage of BLE beacons requires retailers to provide custom apps for mobile users to download. Therefore, to get started with beaconing, you’ll probably need to engage a software provider specializing in beacon-compatible mobile app development services.

While this is currently a constraining factor in the value of retail beacon technology, manufacturers are working hard on enabling beacons to communicate with no custom apps needed. This is most likely to be achieved by creating beacon “networks” or partnering with publishers to give beacons access to widely used apps.

In the meantime though, a custom app is necessary. If you can successfully market your app and get shoppers to download it, you’ll gain access to a wealth of opportunities to engage them in your brand and turn them on to your product ranges.

Not Just a Digital Meet and Greet

In case you’re wondering if it’s really appropriate to become so intimately familiar with shoppers in your stores, consider the results of the research conducted by Accenture in 2016, which found that the majority of shoppers (56%) feel more disposed to walk into a store that recognizes them by name.

Accenture_news-05-v2

Of course, beacons offer a lot more than the ability to be on first-name terms with store visitors. To give you some ideas for exploiting this technology, here are a few ways in which retailers are currently generating results from their BLE investments:

  • Offering personalized deals to customers (Macy’s, Lord & Taylor, Duane Reade)
  • Notifying customers of in-store events and promotions (Apple, Walmart)
  • Helping customers to navigate store aisles (American Eagle, Carrefour, Galeries Lafayette)
  • Gathering data on customer behavior/merchandising effectiveness (Hillshire Brands, Apple)
  • Sending product recommendations to customers (Apple, American Eagle, Aerie, Macy’s, Waitrose)

These are examples of how beacons are being used right now, but with many brick-and-mortar retailers seeking to digitize customer experience and compete with online brands, a little more development of the technology could introduce limitless possibilities for proximity marketing and location-aware digital services.

Proximity Marketing: The CMO’s Imperative

As you have probably noted by now, beacons are mostly used to improve customer experience. This is completely understandable considering the need for brick-and-mortar retail operators to push back against online consumerism.

Retail CMOs could do a lot worse than applying digital technology to reengage shoppers with the in-store experience. Of those that have already implemented proximity marketing, more than 40% cite customer experience as the foremost priority, according to recent discoveries by market research firm Vanson Bourne.

Customer centricity may be one of the most important drivers for beacon technology, but retail stores will also benefit from using beacons as utilities, whether for intelligence gathering or streamlining of in-store processes. As hardware and software improves, it will likely become the norm to integrate beacons with retail management solutions such as POS and CRM.

There is also speculation that beacons may become a mainstream enabler for cashless and contactless payments. A number of beacon-based payment solutions are already in development, and a number of contactless payment trials using BLE technology have taken place over the last couple of years.

How Close Are You to a Beaconing Strategy?

If this article has given you some insight into the possibilities offered by BLE beacon technology, now is a good time to make a decision.

What will it be? Will you implement imminently, or ignore it indefinitely?

Perhaps none of this information is news to you, in which case we’d love to know your thoughts on proximity marketing and its benefits, or drawbacks. Does your enterprise already have a beaconing strategy in place? If so, what have your experiences been like so far?

From the consumer perspective, most evidence suggests that proximity marketing is putting some life back into the shopping mall—and that has to be welcome news if traditional walk-in stores are the basis of your business.

Ekaterina Pioryshkina

Kate Pioryshkina is a sales manager at Iflexion. She has over eight years of experience in IT, negotiating countless development projects and an eye for bottlenecks in development that modern businesses struggle to overcome. This skill allows her to identify specific business pain points and allocate the most appropriate resources from iflexion’s talented pool of developers. ‘Exceeding expectations’ is her professional motto. She has the global experience necessary to understand cultural nuances of any project: locale, target audience, and goals. When it’s ‘go time’ there’s no stone left unturned. But outside of work, she loves to travel, explore new destinations, ideas, cultures, and technologies. She’s also a film buff who enjoys a good movie.