A comprehensive comparison of all proximity marketing solutions for retail (PART – 1)
Since the 1960s, E. Jerome McCarthy’s concept of the “Four P’s of Marketing,” – using Product, Price, Promotion and Placement as the primary pillars of marketing strategy has served various businesses. And although the four P’s have gone through various iterations over the years, I believe that another “P” – “Proximity” – is most relevant today, as it represents the physical connection between customers and businesses.
Traditionally, marketers and business owners had been using proximity solutions that did not involve technology – physical signage and banners. But in the last few years, technologies have become much more affordable, and therefore, businesses are willing to integrate them into their marketing strategies. Advanced technologies include QR codes, RFID tags, WiFi, NFC tags and Bluetooth beacons.
In this blog post, we will talk in detail about two of these proximity marketing solutions – QR code, RFID. Also, why proximity today, in 2018 and beyond, is all about BLE beacons.
We have discussed WiFi and NFC technologies, and their comparison with Bluetooth beacon technology in Part 2 of this article.
QR codes vs beacons
Back in 2009/10, QR code seemed to be the next big thing. It appeared everywhere – shop windows, food labels, brand fliers, magazine advertisements and every other customer-facing platform had distinct little black-and-white squares that could be scanned to access a website or a piece of information. This seemed like an immediate success.
But this did not really turn out to be what marketers expected it to – in a research by Inc’s in 2012, merely 2 years later, revealed that 97% of the consumers didn’t know what a QR code was!
However, that has completely changed. According to Statista, at least 11 million households will scan a QR code in 2020 in the US alone. This is a sharp increase from an estimated 9.76 million scans in 2018.
China is obsessed with QR codes since WeChat made them popular a few years ago. In China, consumers scan QR codes to make payments, authenticate goods, avail of discounts and practically every use-case there is.
Paytm has had the same effect in India. It’s second nature for consumers to scan QR codes now.
The trends suggest that the popularity of QR codes will only continue to rise.
Apple’s native feature to scan QR codes
iBeacon protocol for beacons was introduced by Apple in 2013 and the only minor hurdle is that it requires a compatible app.
While beacons are, without a doubt, an excellent way to run proximity marketing campaigns, QR codes are simpler to execute.
Starting in 2017, Apple announced native support for QR codes in the iOS 11 update. The QR code reader is inbuilt in the camera app. Consumers can scan and interact with QR codes efficiently without ever needing to downloading an app.
For businesses and marketers who want to explore proximity marketing without an app, QR codes are definitely the right place to start.
By having consumers scan QR codes, it signals their acceptance to receiving contextual information which leads to better engagement rates.
Companies that use both beacons and QR codes
- Macy’s used QR codes for its Backstage pass campaign back in 2010. These QR codes could be scanned to access videos, trends and helpful advice, straight from Macy’s stable of star designers and industry experts.
In 2014, this big-box retail chain deployed roughly around 4,000 Bluetooth beacons across 850 stores. This shift in itself proves that QR codes did not measure up to the abilities and results of BLE beacons.
- McDonald’s – Back in 2013, the giant fast food chain, McDonald’s, launched a new QR code campaign in 14,000 outlets in the United States. These QR codes on the fountain drink cups and takeout bags informed the diner about the food’s nutritional value. Based on the statistics from comScore, a well-designed QR code has a scan rate of 6.2%.
Image source – https://goo.gl/Qgx83V
In 2015, McDonald’s leveraged beacons at 15 McD Cafés in Istanbul, Turkey. These beacon notifications pushed mobile coupons to customers prompting them to purchase one coffee and receive a beverage from the new drink line for free. McDonald’s achieved a 20% conversion rate with 30% of users who received the promotion using it more than once.
Image source – https://goo.gl/EauwZ5
The future of QR codes
Along with all iPhones, most Android phones have also begun to include the native feature to scan QR codes in the camera app. What drives QR codes to prominence is the ease with which customers can unlock offers, scan and pay for their products, understand the product better and enjoy post-purchase benefits.
QR codes are cost-effective and can be tied to beacon campaigns as well. The Beaconstac dashboard consists of a QR code functionality that allows businesses to print them out with compelling copy and have their consumers scan the QR code to view a particular markdown card. This nifty feature is stellar because the markdown cards can be altered in real time and businesses do not have to keep printing out different QR codes and can re-use the same QR code.
Related: Learn more about running proximity marketing campaigns without an app in 2019
RFID vs beacons
Back in 2003, the headlines read out “Get Ready For The RFID Retail Revolution” or, “Wal-Mart Kicks Off The RFID Revolution”. Because of Walmart’s announcement of adopting RFID in its supply chain, RFID quickly went from a little-known technology to the next big thing. But this rapid growth was ephemeral.
Even before the 2008 financial crisis set in, the market for RFID shrunk and the revenue fell flat. Walmart themselves faced issues with the implementation, including pushback from the suppliers and technical problems.
Currently a lot of retailers “have plans” to start using RFID, but fully deployed RFID systems – including tags, readers and supporting software and where retailers are experiencing measurable results and ROI – presently ranges from 4% – 8% only.
Beacons over RFID
Walmart’s announcement made it sound like RFID is fast taking over the retail world, but the advent of BLE beacons in 2015 changed the game by providing business with a whole new option for generating contextual intelligence. There is a host of reasons that account for the limited success of RFID tags. And these shortcomings essentially account for welcoming beacons into the retail space.
If you new to beacons, then you might want to check out our article about RFID vs beacons and will beacon replace RFID?
Why does RFID have limited adoption?
- The greatest hurdle in RFID adoption is that deploying RFID system requires a number of different components – basic hardware such as tags, readers, reader control and apps. Retailers have to invest a heavy amount upfront on the infrastructure front, on both sender and receiver side. Here’s a comparison of the investment to run a pilot for both the technologies :
- Unlike most other proximity solutions, RFID does not come with inherent compatibility with mobile. It requires hardware to process signals at specific frequencies.
- Information passed by RFID cannot be personalized based on location, frequency, time of the day etc. It is constant and has to be embedded in the tag.
- RFID tags only work at a very close range. For this reason, a scanner must be brought incredibly close to the tag in order to register and record presence.
There isn’t a binary solution to which is the best proximity marketing solution for a business. Different technologies have different capabilities and adoption rate. BLE beacons and QR codes together create a wholesome proximity marketing solution. Beacons can be used to engage loyal customers while QR codes attract new business.
Check out the second half of the article which talks about WiFi and NFC tags as proximity marketing solutions, and how they measure up to BLE beacons!
If you are planning to try out proximity marketing for your business, 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!