Beacons provide new opportunities for brands to offer proximity-based experiences beyond the mobile screen. This innovative technology can increase the value and relevance of messaging in all channels, and provide new insights into customer behavior.
HOW BEACON TECHNOLOGY IS CHANGING THE RETAIL SHOPPING EXPERIENCE
The widespread adoption of smartphones and the rise of wearable technology is leading to rapid changes in retail consumer behavior. Retail brands that can offer engaging and seamless experiences across the ever-increasing array of channels, both digital and offline, stand to be big winners.
Consumers today face a variety of messaging from brands in every conceivable channel. Brands often engage too early or too often, putting themselves at risk of alienating the overwhelmed consumer. So how can a brand engage at exactly the right time, helping to ease the consumer’s day rather than annoying them?
Sparks Grove, a division of North Highland, has rich expertise in human experience design. We focus on helping clients, like The Coca-Cola Company, navigate the complexity of human behavior and utilizing emerging technologies to provide highly relevant conversations.
The solution is equal parts technology and psychology. For the tech side, we start with Bluetooth Low Energy (Bluetooth Smart™) Beacons, which have great potential to help marketers overcome the challenges of the constantly connected consumer. Many existing beacon-based experiences overlook beacons’ full capabilities by coupling them to the mobile screen. Bluetooth Beacons, however, can provide innovative, proximity-based experiences beyond the mobile screen. By taking advantage of mobile but also making better use of the physical environment in which the consumer is moving, marketers can increase the relevance of messaging in all channels, providing new insights into consumer behavior.
Beacon technology can also help solve the growing challenge of developing accurate attribution models. With real-time insight into the true value of marketing investments across a growing media mix, marketers will be empowered to make the most strategic decisions.
NOW HAPPENING IN A MALL NEAR YOU
Let’s look at the example of Katie, a busy 34-year-old professional. She likes to shop, but sees it as more of a necessity than a fun activity. She generally knows what she wants and is focused on purchasing it with as little hassle as possible.
A few months ago, Katie received a 50% off discount via email as an incentive to download a cosmetic company’s new mobile application and create an account. Typically Katie would resist downloading a new app unless it provides utility value to her daily life. However, Katie decides to download the app because it provides a way to receive exclusive value-based offers, and easily add them to Passbook on her iPhone, enhancing her routine shopping experience.
Since downloading the app, Katie has redeemed her 50% off offer and the app has gained access to her in-store and online purchase history. In particular, the app has tracked her purchase of the same moisturizer every 7-8 weeks.
As a result, the cosmetic company sends Katie an in-store promotional discount for her moisturizer. So on Thursday evening she heads to her favorite department store to shop for an outfit and pick up the moisturizer while shopping. As she enters the store, her phone picks up a beacon signal installed at the cosmetic company’s counter. The app retrieves her profile, including her purchase history, welcomes her to the store, and the 20% off offer for her favorite moisturizer appears on her iPhone lock screen. Because the app utilizes BLE beacons, this all occurs without Katie ever having to open the app or Passbook.
After finding the perfect outfit, Katie heads to an associate to complete her purchase. As Katie nears the cosmetic counter on her way out, she receives another reminder for the 20% off offer on her iPhone. An associate greets Katie with a warm smile. “How can I help you this evening?”
“I almost forgot,” Katie says, “I have a 20% off offer for moisturizer.” The associate scans her 20% off offer through her Passbook and as he completes her transaction, Katie spends a few minutes browsing their new line of eye makeup.
As she leaves the store, Katie receives a thank you notification that also includes a promotional offer for their new line of makeup. This same exclusive offer is also reinforced through beacon technology next time she is shopping in-store.
Because Katie has the cosmetic company’s app on her mobile device, her in-store browsing of the various product lines is silently detected in the background allowing the brand to offer her specific offers based on her real-world shopping behaviors.
RELEVANCY IS KING
Context is the sum total of everything that the consumer experiences at the moment of engagement. For example, time of day, temperature, location, mood, hunger, and proximity of friends. Only some of these items are truly relevant at a given moment. An important consideration for retail marketers in the delivery of high-value consumer messaging is whether a given piece of context is relevant, and whether or not it should be leveraged to deliver a more meaningful relationship with the brand.
Katie’s proximity to product point-of-sale, the existence of an offer on her iPhone, and the amount of time she spent near specific products are all important pieces of context. Each of these components can be leveraged to provide a highly engaging, more relevant and valuable experience for her, both at the moment of engagement and after.
BEYOND GPS: CREATING AMAZING EXPERIENCES UP CLOSE
Katie’s in-store experience with the cosmetic brand isn’t possible using GPS alone. Marketers can create deeper and more meaningful interactions by using granular location and proximity data.
In 2010, the Bluetooth Special Interest Group merged Bluetooth Smart™ technology into the main Bluetooth Standard with the adoption of the Bluetooth Core Specification Version 4. The new specification provides wireless personal networks with ultra-low power consumption. In early 2015, most mobile operating systems support the Bluetooth Core Specification 4.0, and it is estimated that by 2018, more than 90% of mobile devices will support the profile.
Bluetooth Smart™ beacons overcome many of the challenges of GPS-dependent location implementations, but the technology isn’t a replacement for core GPS functionality. It’s designed to be a short-range (~100m theoretical max) wireless network, capable of exchanging data between arrays of devices.
“Beacon technology can help solve the growing challenge of developing accurate attribution models.”
Beacon technology offers advanced interaction opportunities through its ability to provide range and distance information from broadcasting beacons. Using Broadcast Power, RSSI (Received Signal Strength Indicator), and Measured Power values, marketers can create unique interaction models based on near, intermediate, and far distances from beacons.
Katie’s interactions with the cosmetic company were made possible through understanding her range and distance to beacons installed at their counter. Her initial “Welcome” message was triggered by a “Far” range signal and an “Enter” event. Additional tailored messages, based on distance to brand counters, could be delivered on “Exit” events and range. To entice purchase, brands could offer immediate incentives to buy based on repeat “sightings” at given locations, especially in the near context.
WE LOVE MOBILE, BUT WE LOVE BEYOND-MOBILE MORE
When Katie was at the counter, a digital display in the background presented information about her favorite moisturizer. “Funny,” Katie thought. “This must be a hot item for them.” Katie wasn’t aware that her proximity to the counter and her purchase history triggered content specific to her.
Many beacon-driven experiences today use static beacon installations to trigger marketing messages on mobile screens. This allows brands to engage with greater accuracy (and reduced battery drain) than GPS-dependent location services. But we should think more broadly in using beacons to support mobile interactions, as well as other digital and off-line marketing routes. By going beyond the screen, we see that opportunities for roaming beacons provide a range of possibilities that surpass the static beacon model. Retailers may consider providing beacons to consumers that can be carried on key chains, or tucked away in a side pocket of their briefcase, purse, or wallet.
Today, small beacons can be purchased for $3- $5 USD and continue to shrink in both size and expense. It’s already feasible for consumers to attach a small beacon to their key chains. In fact, the success of loyalty programs such as the Kroger Plus Card program is testament to the willingness of consumers to adopt key chain tokens when there is a sufficient reward.
In other words, the marketing potential in mobile devices is vast, but it’s even better if we can go beyond the mobile screen to incorporate the full environment—digital and physical—in which our audience is moving.
By placing the beacon with the customer, the retailer has the ability to offer customized messaging on a wider range of screens—and even non-screens. Relying solely on the mobile screen is too limiting, and it places the onus on the consumer, who must shift attention from the task at hand to a mobile screen, which can be distracting.
PHYSICAL STORES NEED DIGITAL DATA, TOO
The morning after Katie’s visit, the marketing department views a real-time report of traffic for Katie’s preferred store and sees a heat map showing 110 customers who visited the store over the past 24 hours.
They discover that 40% of their customers enter on the second floor of the department store and don’t move to the first floor where the product counter is located. They decide to increase marketing messages through their app around beacons located on the second floor entrance. One week later, they see a 14% lift in customers entering from the second floor visiting their counter.
Regardless of the beacon interaction model, there is a significant data story. For years we’ve been able to observe consumer behaviors in digital media. Web analytics allow us to see what products consumers browse, their search history, cart activity, session length, etc. This data isn’t nearly as accessible in the brick-and-mortar stores, however, and it is significantly more difficult to obtain in real-time. We rely on small samples and expensive surveys to understand consumer movement through stores. By better using beacon technology, we can get a stronger understanding of attribution as the consumer shifts from digital to non-digital modes and back.
HOW SPARKS GROVE CAN HELP
Sparks Grove is at the forefront of human experience design, helping clients navigate the increasingly complex landscape of multi-channel marketing.
In 2014, Sparks Grove partnered with The Midtown Alliance and The Coca-Cola Company to create a beacon-enabled mobile application to support The Midtown Alliance Community Loyalty Program. This project initially began as a proof-of-concept through the Midtown Alliance’s Living Labs program. The solution involves the installation and deployment of several hundred beacons in Atlanta’s Midtown neighborhood, a Merchant-accessible Offer Management System that provides merchants with the ability to enter offers, and a mobile application that sends proximity-based offers and rewards to consumers.
Released in December 2014, the program delivered more than 55,000 offers in its first three months, driving new business to merchants. It is collecting more than 670,000 beacon sightings, helping the Midtown Alliance better understand pedestrian traffic. These insights also allow The Coca-Cola Company to optimize equipment placement, driving product lift.
A second pilot program in 2014 involved another partnership between The Coca-Cola Company, Sparks Grove, and a large amusement park in Florida. This pilot was to develop the strategy, approach and implementation of more than 200 beacons, leveraging a back-end system to collect data on guest movement, dwell, and linger time. The system delivers marketing messages and informational content via the park’s existing app in real-time as guests move through the park.
More than 12 million beacon sighting events have been collected in the first year, with the typical guest generating between 270-400 beacon events per visit. The data provides invaluable insight into guest behavior and audience segmentation, as well as vital operational benefits.
PINPOINTING THE PATH FORWARD
These recent successes (and our example of Katie’s experience) show that combining new beacon technologies with a deep understanding of consumer behavior can lead to winning experiences for brands. Customized, real-time messaging opportunities not only drive desired consumer behavior, they also provide marketers with instant insight into how each message is performing, allowing for quick iterations whenever needed. Marketers can pinpoint the intersection of technology and human experiences, helping people navigate their lives and winning loyalty in return.