Archive

Omni-channel shopping

Have you ever wondered what a beacon looks like? I have and I have seen a few.

They are small enough they can sit in the palm of your hand, be stuck to a wall inside a store or inside an outdoor panel at a bus shelter without anyone noticing.

By Jonathan Nalder from Kilcoy, Australia (beacons by jnxyz.education) [CC-BY-2.0]

They first came to the world’s attention 12 months ago with the launch of Apple’s iBeacons in the US. This launch was closely followed by another defining milestone: the Regent Street project in the UK, a first of its kind now in full swing.

Soon after, as I was talking to two outdoor media owners, they were telling me about their plans to bring the technology to the Australian market – both understandably racing to be the first in market given its huge potential for highly-targeted mobile marketing.

Plenty has been written since on how the technology works and its marketing possibilities. For my part, I am genuinely excited about its many benefits. Yet there are some drawbacks to be mindful of also.

In this post, I specifically seek to answer the following questions:

What do you need for the technology to work?

What are the marketing applications?

Is beacon marketing for every consumer and every brand?

As a marketer, why should consider investing into beacon marketing?

And what key considerations do you need to be mindful of?

Happy reading! And as always, I welcome your thoughts, in particular any insights gained from first-hand experience or best-in-class case studies you may have come across.

What do you need for the technology to work?

As a brand – you need a native smartphone app programmed to react to one or more beacons.

As a consumer – a Bluetooth-enabled smartphone, with a beacon-enabled brand app installed on it. Push notifications and location detection must also be activated on the app.

Assuming these conditions are met, as soon as one of your app users/customers is within range of your beacon(s), they will get tracked and a personalized message triggered and displayed on their mobile screen in the form of a notification, CTA or an event.

Top

What are the marketing applications?

The possibilities are endless. Their quality and effectiveness however are largely dependent on the sophistication of your data-driven marketing capabilities and their level of integration with your mobile ecosystem.

Two of the most advanced examples I’ve come across are the Regent Street and Slyde Beacon-enabled shopping apps. Key functionality typically includes the ability to identify a customer nearby and offer them customized promotions as they walk past a store, automatically check them into said store upon entry, mobile redemption of e-coupons and in the case of Slyde a touchless payment experience.

In terms of user experience, here are a couple of scenarios:

On a hot summer day, as you walk past an outdoor poster you may get prompted to redeem a discount on a can of Coke in a nearby Woolies, conveniently located within meters of the panel.

Another example, as you return in-store, and get near an aisle that carries your favourite brand of cereals, the store may invite you through its app to redeem a promo on that very product to incentivize repeat purchase. It may not be on your shopping list that day, but when prompted (or even better, reminded that you might be soon out of stock) you may decide to be tempted.

These are just some of many possible retail applications, and the more customer data is leveraged at the individual level (e.g. product preferences, frequency of product purchase, average basket spend etc.), the more relevant and effective the message.

Beacons may also be used in other physical environments (e.g. airport lounges, museums, cinemas, at home etc.) and to offer any number of value-add services on-site, not just retail offers.

Top

Is beacon marketing for every consumer and every brand?

77% of Australians over 13 are now smartphone users (source: The Digital Australia: State of the Nation 2014 report). And with Bluetooth adoption on the rise, it’s safe to say we are looking at a large audience across age groups.

Within that pool however, phone usage varies greatly. From your teenage daughter to your mum and your grandad, digital literacy and mobile user behaviours (e.g. what they use their phone for, where and when, frequency etc.) aren’t quite the same and so bound to impact on receptivity levels to your mobile marketing.

Critically also, mobile phones are our most personal digital devices. Hence how and when you choose to intrude on this very private space (once you are granted access) will make or break your relationship pretty much.

So to answer our question, all mobile consumers can benefit from it as long as you make time to know them – and know them well – and engage accordingly.

In terms of which categories are likely to benefit the most from beacons, retailers are by far at the top of the list – from your local grocer’s to your favourite fashion retailer or department store to name a few. But not just. I would also argue that any brand with a loyal following, a solid mobile presence and data integration strategy stands to benefit from it.

Top

As a marketer, why should you consider investing into beacon marketing?

Assuming you already have a suitable app in market (e.g. a shopping, loyalty or customer service app) with a sizeable user base, are in the process of building one or considering investing into one:

#1 – Beacons make it possible to deliver personalised mobile communications at the right time and at the right place to the right person – based on the customer’s location at its most basic, on their purchase history and shopping preferences also (when the latter are known) at its best.

#2 – They are a source of valuable customer data and insights: user data is collected at every interaction (such as store visits, dwell time, conversions); that data may in turn be used to build a meaningful and mutually rewarding relationship.

#3 – For bricks-and-mortar shops, beacons are simply a great way to drive footfall whilst allowing them also to compete with online retailers on delivering a personalised user experience offline. 

Top

What do you need to be mindful of?

#1 – Your opt-in acquisition strategy and ability to deliver on your customer value proposition are both critical.

For this type of marketing to be successful, you need to maximise opt-ins within your mobile user base. This requires you to think long and hard about the benefits and rewards you are going to offer in return for opting in to receive your beacon-enabled communications.

Those benefits and rewards (including their level of personalisation) must be of real value to the user for them to accept to trade off their privacy. And then, you actually must deliver on your promise. Failing that they won’t let you in in the first instance, or you will risk losing them and generating negative WOM.

#2 – The more integrated your CRM and data capabilities, the more effective your beacon marketing.

At its simplest, beacon marketing doesn’t require a fully integrated multi-channel CRM and data strategy. Tactical use cases can be as simple as driving in-store purchases on a seasonal product (e.g. sunscreen or ice cream on a hot day) amongst app users browsing nearby.

To realize its full potential however, it requires the ability to identify app users as individuals, with their online and offline interactions, purchase history and shopping preferences reconciled and accessed in real time for an optimal personalisation of the experience.

The reality is that most marketers are yet to achieve that single customer view and it may take a few years before they do. With this in mind, a staged approach towards achieving an integrated customer profile is most likely the best avenue, with a CRM and technology roadmap clearly setting out your capability improvement goals over a period of time.

#3 – Beware of the lack of legislation about what you can and cannot do.

The lack of legislation governing the use of beacon technology in Australia was flagged to me recently as a potential risk by an industry peer, and I have to agree.

On one hand, the absence of a legal framework is liberating for marketers – Amazon knows this too well as it picked an unregulated market, India, for the launch of its drone deliveries.

On the other hand, the lack of regulations may lead to an unbridled use of the beacon technology, which could antagonize consumers with marketers intruding excessively with their user experience.

So until such a time when we have guidelines in place, common sense must prevail. Put yourself in the consumer’s shoes. Think: what would you think or do if you were to receive that message at that time and place? Focus groups, customer surveys and other forms of consumer research should help validate your approach also.

All in all –

When their application is carefully researched and planned, with the personalisation (hence the relevancy) of the message maximised, beacons can take your relationship marketing to another level. Fact.

They can be an effective way of driving sales but also building loyalty and WOM amongst your existing customer base through the messaging of timely contextual value adds.

If misused however, they could lose you loyal customers faster than you think. That is a fact also.

Have you started using beacons for your clients or own marketing purposes? Don’t be shy, let us know of your wins and learnings also.

Top

Advertisement

I have just come across yet more insightful research from our Google friends, which the advertising types amongst us will no doubt find useful.

This time the research focuses on mobile searches – specifically, mobile user search behaviours and the correlation of mobile searches with online and offline conversions.

You can view the full Mobile Search Moments study here – for now, I just wanted to point out a couple of striking stats.

First – their research shows that a staggering 77% of mobile searches happen at home or work (i.e. a location likely to have a PC), with only 17% on the go.

This surprised me at first as I had thought until now that smartphones were used for searching mainly on the move (i.e. when no PC is available). Then I remembered my own behavior at home: since trading my old phone for an iPhone 5, my smartphone has fast become my #1 device of choice for initiating all sort of activities from the comfort of my sofa including checking emails, reading online articles, playing games and … searching.

The study goes on by explaining that the key reason for users preferring their mobile phone over a tablet or PC when searching at home is the convenience and speed it offers. A respondent explains: “It was easier on the mobile device as I didn’t have to get up to turn on the computer and wait for it to boot up”. I could indeed have said this myself to justify my own behavior.

One other key insight that stuck with me is how powerful a conversion tool mobile is:

Not only 3 out of 4 mobile searches trigger follow up actions (e.g. visiting a retailer’s site, sharing the info you have found etc.), but also – and most importantly – 55% of purchase-related conversions (i.e. store visit, phone call or purchase) occur within one hour of the initial mobile search, with that number increasing to 81% within 5 hours.

As the ultimate “always on, anywhere anytime’’ companion device, the ever increasing take up of smartphones and with both a purchase intent and conversions this high, it is easy to see why smartphone users need to be at the top of any marketer’s priority list (sadly not always the case).

And for the time-poor amongst us, the below infographic sums up all other key insights for future reference – Thank you Google!

Screen Shot 2013-06-09 at 4.22.28 PM

Lately I have been reading about connected homes and connected cars. Whilst I am (very) excited at the prospect of experiencing both in the not-so-distant future, it left me wondering about what connected stores might look like also a few years from now.

3 players stick out for me when it comes to transforming the in-store experience through the integration of information and communications technologies.

All 3 are working hard to merge the bricks-and-mortar and virtual shopping experiences into one effortless, consistent and personalised experience. This they achieve not only through a selective use of technologies (mobile or other), but also by observing their customers’ shopping behaviours and adapting the in-store experience accordingly.

According to Burberry –

For Christopher Bailey, chief creative officer of the British luxury fashion brand, the shop of the future integrates behaviours that are inherent to the online shopping experience into the in-store experience.

And so in the same way as customers shop online from the comfort of their sofa at home, customers in its London flagship store are shown to a sofa at point of purchase, where they are presented with a swipe machine that swiftly computes their purchase.

Christopher Bailey commenting on the launch of the new store design in 2012 explained: “We designed it like that because when you’re shopping at home online, you are on the sofa with your credit card. You don’t stand up and queue.”

Other examples of the “digitalization” of Burberry’s largest store include embedding clothes with RFID-enabled chips that can be read by the fitting rooms mirrors, triggering images and videos of the selected garment in catwalk shows or how it was made. Kitting out the store with high-speed lifts to fast track the time it takes for staff to check an item’s availability is one other (this check is instant online).

According to Starbucks –

For Howard Schultz, the CEO of the coffee house chain, the store of the future will enable a one-to-one relationship between the brand and its customers through the personalization of the service they receive as they walk into the store.

As he explained in a recent interview with USA Today, customers with a history of in-store mobile payments made through the Starbucks app could in future be presented with their usual favorite drink as they are geo-located and id’ed the moment they step through the door – without having to order.

According to GAP –

For the high-street fashion retailer, the store of the future reconciles the rise of the omni-channel shopper with the company’s ability to connect demand (web, mobile or offline) to supply (wherever it might be also) through its backend systems. This has led the retailer to start trialing the find in-store and reserve-in store features on its shopping app.

The app geo-locates you and flags the nearest stores. By connecting to the store inventories in real-time, it shows you the inventory level for a given item and ultimately gives you the ability to find and buy the item you pre-shopped online in a store of your choice.

As you go online to shop with GAP, you spot an item you like, you locate it in a store near by and simply reserve it. The item is held for you until the next business day for you to try in store, build a transaction and possibly a whole outfit around it. Unlike pick-up in-store, it encourages customers to stick around as they try things on and build a connection with the staff and brand.

In both scenarios, the shopping experience starts online and leads to an offline transaction.

No doubt there are more examples in the same vein (feel free to share those you find inspiring!). Burberry and Starbucks however are ones to watch: they have famously (and successfully) broken new grounds when it comes to integrating digital media and platforms into their marketing efforts. And they are constantly looking for new ways to market their products and optimise the customer experience.

With this in mind, any one who ever thought the bricks-and-mortar shops would soon be a thing of the past may want to have a rethink. A converted online shopper myself, I could even be tempted to go back in-store.

%d bloggers like this: