Beacons for Location-based Advertising

Nearly 40% of consumers make purchases inside a physical store at least once a week, compared to just 27% who do the same online, according to PwC’s annual consumer survey.

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The same research found that more than 60 percent of consumers said that visiting a brick and mortar store allows them to buy an item immediately. These numbers are a great indicators for brick and mortar stores, as it shows that despite the ease of buying online, customers prefer buying in-store.

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Offline retailers can build on top of this momentum using tactics such as location-based advertising to target customers at the right place, at the right time with the right offer in store. With today’s ever connected customers always searching for that ‘nearest’ restaurant or a shopping outlet while on the move, location-based mobile advertising does seem to be the first thing retailers should invest in this year.

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The latest and the most promising tool in a retailer’s repertoire for location-based advertising is iBeacon technology. Beacons, as the hardware devices are called, open doors to engage customers where it matters the most, benefiting both the customer and the business.

While we talk about using beacons for location-based advertising, we often fail to understand a customer’s perspective to such advertising: are consumers comfortable with push messages? Do they prefer push method or pull for advertisements? Asking these questions will help you put together a customer-centric location-based marketing strategy.

In this post we will look at the best ways to implement a location-based advertising strategy using beacons:

1. Win customer confidence: Most consumers have a natural tendency to shy away from location-based services. It is, thus important to provide clear opt-in instructions. Explain as quickly and clearly as possible to your prospects and customers about how to opt in to your location-based marketing program. It’s also very important to let customers know how the information they have shared while enabling your location-based service will be used.

2.Test your campaign on a limited, unbiased audience: A good practice is to start with a beacon pilot project targeted at a limited set of people, at a few locations. The best way to do this is to choose a maximum of hundred users who could experience how your app works, and how it interacts with beacons. Creating a ‘closed’ project will help you manage the project better. Also try varying the ‘messaging intervals’ to understand the optimal time interval for sending subsequent messages.

If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help!

3. Measure and optimize campaigns: Measure the effectiveness of your campaign in real- time by using data analytics as a tool in your campaigns. Metrics such as footfalls, visit frequency and recency, heat maps etc., can help you understand if your campaign is working or if it requires tweaks.

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4. Engage and not annoy your customers: This is the most important part. Make sure you are not annoying your customers with too many push notifications. It’s best to cater to consumers at their ‘moment of truth’. You could selectively push a time relevant (limited period offer notification), preference based ( sea facing/ hotel facing room offer at a hotel), or circumstantial (shortest path to the security gate at the airport) message to customers to let them see the real value in your app.

This is critical, as according to a recent study by inMarket, too many irrelevant push notifications, or an overload of messages, nudged consumers to stop using the app or uninstall the app. The study also reported that, overwhelmed by in-store marketing, most consumers ended up checking their beacon apps three times less frequently. Thus, with every other push notification that is delivered per store visit, you risk a whopping 313% drop in app usage.

5. Offer add-on services: You can also offer features such as “reserve-in-store” and “click to collect”. These features let online shoppers reserve the item they wish to buy in a store nearby (the nearest store is suggested based on their GPS information) so they can pick it up instead of having to wait for the item to be shipped. This will make you stand ahead of your competition and deliver quality service to your customers.

Two ways to do beacon-enabled location-based advertising:

Push Messaging

In December last year, fashion e-retailer Dafiti one of the leading e-retailers in Latin America, started placing beacons in public places around São Paulo, Brazil, as part of an experiment in location-based contextual targeting. They placed beacons across bars, restaurants, parks, news stands and popular shopping streets.

Although Dafiti is an online retailer, they realized the importance of being close to their customers and maintaining an effective communication channel with them.

Customers who have the app installed and push notifications turned on – are pinged with messaging, content and offers based on where they are as they move throughout the city. Users can automatically save any discounts or coupons they receive on the go through an integration between the Dafiti app and Apple’s Passbook.

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Pull Messaging:

GameStop stores across New York require users to ‘ask’ to be beaconed. Instead of pushing messages to game shoppers based on their location in-store, GameStop wants its shoppers to bring their phone near the beacon, if they want additional product information. On bringing their mobile device near the beacon on the rack, the proximity-detection device will trigger the relevant messaging in the GameStop app.

Thus, location-based advertising can play a big role in your brand’s revenue generation. It’s for the same reason that location has been termed as the ‘new currency of marketing’. Are there any other best practices you can think of? Let us know in the comments below.