Smart beacons: Retailers getting closer to their customers

Connecting with Customers in the Beacosystem

RETAIL marketers are always trying to get closer to customers. One of the emerging ways to do so comes from knowing just how close they are.

With the use of smart beacon technology, shops and malls can engage in proximity marketing. That means communicating with customers with the right message, at the right time, and at the right place—when they’re at your doorstep or in your premises.

Beacons are nothing new. These are small transmitters that send out signals that other devices (like a smartphone) can pick up. Proximity marketing isn’t new either; a physical sign in a store is a basic example. Except now the sign comes into your hands, tailored for you.

The signals from the beacons are essentially codes. Organizations can program the codes to send messages to a shopper’s phone when they’re in the vicinity. That could be anything from a coupon, to navigation, to loyalty rewards.

The technology can work in different ways, like Bluetooth beacons and wi-fi-based systems. Location marketing in general can use GPS or cell tower triangulation to calculate a smartphone’s latitude and longitude. That can reach potential customers in a broad area. Proximity marketing can get even closer, within metres vs. kilometres.

What’s on tap for 2019 and beyond? We talked to five tech companies in the space to get their thoughts on what’s possible and desirable.

MobStac, which helps businesses and brands to leverage beacon technology, reports that the click-through rate for the average location-based beacon campaign is 25 times that of a social media campaign. With greater targeting and personalization, the results go up.

Beyond retail, many sectors have applied this technology, like schools, hospitals, airports and stadiums. This January, Allied Market Research published a report on the global indoor positioning and indoor navigation (IPIN) market. They project it will account for $43.5 billion by 2025, up from $2.64 billion in 2017, thanks to the rising adoption of Bluetooth beacons and increasing demand for proximity marketing.

The retail segment has the biggest market share. The benefits involve not only targeting messages but gathering key data that can influence improvements across operations to enhance the customer experience.

“The potential is huge to provide customers with the information they want.”

KYLE CHAUDHRY, Gofindo

Even with growth, the market now is very segmented, says Aaron Phillips, CEO of ap1. “There isn’t a consolidated approach. Folks are just starting to figure it out,” he says.

Phillips’ firm supports different aspects of a proximity ecosystem, like a beacon management platform, data collection and an advertising channel. He feels that 2019 should see the biggest leap yet for this sort of technology.

“We’re on the innovation curve, crossing the chasm from early adopters,” says Chris Wiegand, CEO of Jibestream, an indoor mapping and location platform.

“We’ll see more pervasive deployment continuing in 2019.”

Understanding someone’s surroundings—where they are now, and where they’re going—is part of the quest to get to personalization. “Everyone in digital media always says content is king. If that’s true, then context is queen,” says Wiegand.

Making it relevant

Kyle Chaudhry, Manager of Client Engagement at Gofindo, talks about trigger points, like the moments when a customer enters or leaves. What’s the right messaging and offers that can keep them in the store longer, influence them to spend, make the experience more pleasant and get them coming back?

Gofindo offers a retail customer engagement and retention platform. Chaudhry says that merchant acceptance is one thing. What matters most is getting customers to buy in. “The potential is huge to provide customers with the information they want,” says Chaudry.

“When you deliver a message that’s personalized and relevant, people are delighted,” agrees Wiegand. “When it’s not relevant, it’s spam.”

“If you’re going to buzz their pocket, you better offer something valuable.”

AARON PHILLIPS, ap1

Compared to other stimuli consumers are exposed to, “Nothing will attract you more than your device going off in your hand,” says Alex Romanov, CEO of iSIGN Media.

Romanov has been around retail sales and marketing for decades, and is the former CEO of Alpine Electronics. At iSIGN, he offers mobile advertising solutions through the use of a smart antenna, and security and safety alert technology.

He sees a push to augmented location and hyperlocal marketing. That means knowing where a device is within a location, and sending alerts only to a niche that has voluntarily agreed (e.g. employees in an office, students at a school, retail loyalty program members).

With these capabilities, just how tailored can proximity marketing get? And when might it cross the line?

Chaudhry offers the hypothetical of a full integration with data from social media. For instance, based on the frequency of your interaction with a particular contact, the date of that person’s birthday, and what’s known about that individual’s tastes and favourite merchandise, a retailer could conceivably shoot you a birthday gift offer the next time you’re nearby.

Even in a social sharing era, will that fly? Wiegand has his doubts.

“It’s a marketer’s pipedream to be able to do that,” Wiegand says. “But what value proposition are you going to give to consumers to allow that level of openness, which doesn’t come off as creepy?”

Learning from traffic patterns

Looking beyond pure marketing, the technology can support other operational improvements. Getting a handle on traffic patterns can help retailers to become more predictive. There are applications for inventory and asset tracking, security, store planning and layouts, and property management. When and where things flow through a space offers valuable data.

For example, Wiegand talks about “removing the friction from experience”. Don’t want to hit the mall because it’s too busy? What if you could get live alerts about what’s snarling foot traffic? Or about wait times at the cash of a particular store? What if you could get directions (as a loyalty member) to reserved parking, with your name above the spot on a digital sign?

To Chaudhry, proximity marketing is part of the broader need to integrate more data science in retail. Consumers are exposed to all sorts of marketing online and offline. If you don’t know what they think of it all, and what drives action, then you’re operating in a vacuum, he says.

Neil Sweeney, CEO of Freckle IoT, says that some retailers might romanticize the concept of smart beacons and proximity marketing. Will messages really reach people at the precise moment it’s most beneficial? Will retailers be able to get a full line of sight on their customers? Getting granular is difficult at the moment, says Sweeney.

By 2025, the global positioning and indoor navigation (IPIN) market will account for $43.5 billion, up from $2.64 billion in 2017

Source: Allied Market Research

Freckle IoT helps brands measure the effectiveness of their advertising by matching media spends to in-store visits, i.e. to a specific location. Sweeney says that targeted marketing is, of course, valuable. So is engaging with customers in your location. The missing piece, sometimes, is understanding what drives people to your location in the first place.

“That’s a more valuable piece of information,” says Sweeney. “At different points, people are exposed to different media. The end result is to grab people into a location. You need to identify the client you want in your store, evaluate which media and tactics are having impact, then double down. Do we know what’s working, and are we driving more incremental visits? We should be more focused on that and getting a bigger return.

BY STUART FOXMAN