The revenue from Location-based services market is expected to reach $43.3 billion by 2019, as stated in a report titled “Mobile Context & Location Services: Navigation, Tracking, Social & Local Search 2014-2019” issued by Juniper Research. The report also highlighted that over two-thirds of the total revenue, i.e. approximately 71%, will be driven through highly targeted and contextually aware ad-supported apps. Brick-and-mortar retailers are already ramping up and using such apps to compete with ecommerce by using proximity marketing to drive customer acquisition and retention.
Various stores such as Target, Macy’s, Urban Outfitters, and more, are implementing iBeacon technology for numerous purposes such as hosting interactive promotions, automating customer check-ins, gathering customer information, and adjusting merchandising strategies. This is because beacons are relatively inexpensive, easy to deploy, and highly effective tools for consumer engagement. The technology’s indelible impact is visible on numerous industries like retail, tourism, home automation, banking, entertainment, and many more. As experts note, most use-cases of beacons exist within the domain of proximity marketing and it’s not without rationale.
Despite huge popularity of iBeacon technology among retailers, a recent survey mentioned that 54% of retailers have not implemented beacons and have no current plans of doing so. One of the major reasons behind this is lack of awareness about the benefits that beacons hold. Let’s take a look at five major reasons that make it essential for you to beacon-enable your digital marketing strategy:
1) Connect to a customer at multiple points of sales
This has been a huge factor in drawing the retail industry towards iBeacon technology. Brands are growing their presence by using beacons to create multiple touchpoints that will in turn help them implement proximity marketing and earn customer loyalty by providing personalized services to their customers.
For example, Avocados From Mexico recently announced that they are converting 1,000 branded grocery displays, all over U.S, to feature beacons that will help the company promote its iAvocado app and register devices that download it. The company is currently leveraging an in-app mobile campaign to aim ads at people based on the sales data collected. For instance, a consumer standing outside a supermarket, is served with an ad reminding him/her to buy avocados. Later when the same consumer enters the supermarket, he/she will receive an ad message explaining how to choose an avocado.
2) Increase success rate of coupons/promotions and loyalty programs
A consumer can be presented a coupon upon approaching a product in-store. This will both inform the consumer about the offers available in-store and increase the chances of the product being bought. According to Shopkick, half of beacon-triggered messages are some or the other form of coupons. Beacons also elevate the value of loyalty programs. Special offers only available to loyalty customers can help in customer retention and aid the success of loyalty programs.
Image source: Macy’s
Macy’s is planning to use the same strategy for its Thanksgiving sale this month by offering in-store shoppers who already have the retailer’s app on their phones, multiple chances to win gift codes and prizes by playing the beacon-triggered mobile-enabled Macy’s Black Friday Walk In and Win game. The game starts on Nov 20 and will go on for ten days. Shoppers will be able to play it up to five times a day.
3) Increase engagement rate
According to statistics issued by a mobile marketing company, beacon-triggered offers drive 60% more customer engagement in-store. Receiving relevant product information and product-related discounts make the overall experience richer for a customer. The engagement rate increases as a conspicuous result.
Image source: nfcworld
A good example of this is how Elle magazine beacon-powered its 30th anniversary celebratory edition in collaboration with ShopAdvisor and RetailMeNot. Any consumer who had opted for a push notification was notified by ShopAdvisor when he/she was within a mile of a product suggested by Elle. In case the customer had chosen to visit the store listed with that particular product, he/she got another notification with a promotion offer by RetailMeNot through beacons. The magazine generated an engagement rate of 12% merely through the use of mobile channels and 500,000 in-store visits driven by beacons in five weeks. Elle plans to continue with the program in 2016 as well.
4) Collect customer information to deliver quality experience
Consumer Information becomes extremely relevant for businesses looking to improve their services and provide better experience. Retailers are using beacons to collect valuable data from a customer’s in-store activity which will then help them target the customer with customized offers based on an individual’s location or past in-store shopping behavior.
Image source: digitaslabsparis
A recent beacon project run by DigitasLBi is a great example of how businesses in general and not just retailers can use customer data to their advantage. The agency deployed more than 100 beacons in its Boston office to collect behavioral information on their 700 employees and learn how they traverse the office space. Their strategy involves using this data to manage meeting schedules effectively and improve time management. A part of their plan also includes utilizing this data to improve office space design to ease out communication between associates and propagate collaboration. Another interesting aspect of this beacon project is that in order to avoid a tinge of privacy invasion, the agency is tracking employees as a unit of their respective departments, leaving out an individual’s name and other particular details.
5) Boost In-Store Sales
According to a report issued by Business Insider, the direct influence of beacon-triggered messages on US retail sales will see a tenfold increase between 2015 and 2016, from $4 billion to $44 billion. This figure is indicative of the impact of beacon-triggered marketing, a form of proximity marketing, on sales that lets businesses target specific consumers with highly relevant content and deals. An interesting study by a proximity marketing platform confirms that 73% of shoppers said that they are more likely to make in-store purchases on receiving beacon-triggered content or offers.
Image source: usa.chinadaily.com.cn
Recently, a Chinese jewelry brand named Chow Tai Fook leveraged beacon-enabled proximity marketing in collaboration with WeChat app to generate sales of over $16 million. The jewelry retailer deployed beacons at 237 Chow Tai Fook stores in four cities, namely Beijing, Shanghai, Shenzhen, and Guangzhou. They gave out e-coupons through WeChat, an app popular among their customers instead of requiring them to download the retailer’s mobile app.
With the variety of objectives visible in the above mentioned beacon deployments, it is evident that iBeacon Technology has given way to innumerable possibilities with new use-cases being explored each day by various verticals. This technology’s merits over other location-based technologies such as RFID, NFC, and GPS has given us so much to look forward to!
If you are new to beacons, read these beacon FAQs.
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!