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Proximity marketing

A few months ago, I started exploring the key need-to-knows of beacons, whilst also considering cost-effective solutions for small businesses.

For all the marketing press coverage I studied then however, there appeared to be little on the actual practicalities. I guess, the not-so-sexy part of beacon marketing, critical nonetheless.

Specifically, what I wanted to know: are all suppliers equal? How easy are beacons to set up and manage? Do they suck a lot time and resource to integrate and maintain? And where does the data go?

And so, I decided to approach one of the technology providers to explore that facet a bit more.

The key take-outs from our conversations as well as findings from my latest research and DIY experiment are summed up here in B&T magazine. I hope you find them useful and look forward to hearing about your first-hand experience or any additional tips you may have for us!

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A couple of weeks ago, I attended the eMarketer’s webinar “Key Trends in e-commerce” and thought I would share with you the developments and insights that caught my attention.

It’s worth noting that most of the trends covered in this webinar are based off US-centric data. However, with the US being one of the leading countries in all things e-commerce-related, it’s safe to say those changes will soon be happening on our Aussie doorstep – if they are not already in some shape or form.

Below are the three trends that grabbed me:

#1. The adoption of beacons and visual search by retailers to bridge the online and offline worlds.

#2. Mobile sales may be small in volume and dollar value (at country level and worldwide). Yet mobile browsing is a key driver of sales across channels.

#3. Etailers are working hard to bring a human touch online and offline.

Happy reading! And as always, I would love to hear your thoughts on new and emerging e-commerce trends to watch over the next few months.

#1. The adoption of beacons and visual search by retailers to bridge the online and offline worlds.

Beacons make it possible to deliver personalised mobile communications at the right time and at the right place to the right person. And amongst the many use cases, beacon-triggered mobile messaging may be used as a way of driving sales off and online (think: e-coupons etc). For those of you who are keen to find out more about how they work, their benefits and other key considerations, you can check out my post on the key need-to-knows of beacon marketing.

Compared to beacons, I would argue visual search is still in its infancy, with a much lower take-up amongst marketers worldwide at this point in time. Its future is nonetheless equally promising. Luxury fashion retailer Neiman Marcus is amongst the very few who have started using the technology as a way of generating more sales, with the recent launch of the Snap.Find.Shop feature on its shopping app.

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#2. Mobile sales may be small in volume and dollar value (at country level and worldwide). Yet mobile browsing is a key driver of sales across channels.

Research has shown that tablets and smartphones are often the preferred devices for searching and browsing product information, exploring options, with the actual buying typically taking place on a desktop or in-store. Sales made through mobile devices remain comparatively small as a result.

However, for this very reason and as eMarketer points out, one should not underestimate the influence of mobile browsing. Our mobile consumption habits and ultimately their very impact on sales make it critical for marketers to have a mobile presence, commerce-enabled or not.

Sadly, there are still too many Australian brands out there (large and small) whose web presence is not mobile-optimised and/or who have no mobile apps either – making the discovery of their products and services through mobile difficult, if not impossible. These brands are missing out and no doubt losing sales to competitors who think mobile first.

#3. Etailers are working hard to bring a human touch online and offline.

Online, this human touch may take the form of an online personal assistant or a video chat with a stylist to help with your online shopping as it happens.

Offline, pop-up shops are one of the ways established online retailers such as Amazon or Zappos are experimenting with a physical store environment. This allows them to connect with a category of customers whom they would otherwise not reach i.e. those consumers who prefer the warmth of real-life interactions with sales assistants made of flesh to virtual ones, as well as those who like to experience and touch products before buying them.

For more on these and other key trends, you can view a recording of eMarketer’s webinar “Key Trends in e-commerce” here. Alternatively, for the time-poor amongst us, here is (spoiler alert!) their wrap-up slide:

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Finally – there is one other trend worth considering, not covered in the webinar as such, yet one to watch in my view.

This trend is best exemplified by Burberry or Hointer.com as they both seek to bring the convenience of the online shopping experience in-store, each to a different extent however.

Burberry’s London flagship store was the first of its kind when it launched in 2012, and remains one of the best examples of store of the future to this day. Simply, no expense is spared to recreate a fully-immersive online shopping experience in-store, through a blend of interactive multi-media content and state-of-the-art store design.

A lot more recent, the Hointer.com shopping experience goes the extra mile in my opinion, achieving a closer “virtual store in a physical world” experience. It uniquely uses mobile technology as the key enabler of its in-store shopping experience end to end, transforming the role of sales assistants as we know it in the process.

Now, some of you may argue that Hointer.com is taking it a step too far, that it’s way too cold and mechanic and that it will never catch on. Well, it may be the way you think now as it is a never-seen-before experience after all, bound to take us out of our comfort zone initially. But who’s to say that it won’t be one day the only way to shop in-store? I guess time will tell.

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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.

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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.

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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.

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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. 

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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.

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