It’s a new year. 2016. All the shopping, all the traveling, all the holiday meals, all the relatives, all the returns, and of course, all the Star Wars. Done. We made it. So let’s look at the year ahead of us. What’s in store for retail technology in 2016? That’s a pretty broad question and one with a million answers and points of view. In fact, check out TPN’s own Manny Alamagro speak on the topic of Technology & Retail at CES on Jan 6. Instead, let’s look at one area of potential for 2016: the mobile beacon.
Since beacons became the buzz in 2013, there has been a perpetual question to follow: will this be the year that the beacon really hits the mark, connecting retailers and brands more closely with their customers? Will this be the year of the beacon? Forbes asked this question of 2015, noting the strides that brands embracing location-based, proximity marketing could expect to see:
The companies who can get closest to the shopper – making her experience as efficient as possible – will boost their brand’s value and, more importantly, drive sales in the digital economy. Conversely, customers who have to do the least amount of work to find what they want for the right price will show their appreciation in dollars.
So how is this expected to come to fruition in 2016? Well, one indicator is that more retailers are signing contracts with beacon providers, which implies that more retailers are becoming equipped with the technology and ramping up to ping their shoppers. According to Ad Age, “global brands including Carrefour, Ikea, Macy’s, McDonalds, Pizza Hut and Target signed contracts with beacon providers in the last quarter, according to ABI Research, and Facebook this summer began distributing the trackers for free to small businesses.” Simon Property Group and Macerich have also placed beacons in their shopping centers. As with any emerging technology, as it becomes more prolific, it will also begin to feel more common, more normal to those that engage with it, which is an important tipping point. So it seems that one hurdle, that of beacon availability and placement, is lessening as more large retailers and brands are pushing for adoption, hoping for those key nuggets of data to understand their shoppers better.
Another indicator is going to be reliant on shoppers, who must opt in and download apps to their smartphones in order to receive any notifications from beacons. Just a few years ago, the biggest hurdle seemed to be the relatively low number of shoppers that adopted smartphones; nowadays, that hurdle has vanished, only to be replaced with perhaps a larger one: permission to push alerts to shoppers’ phones. There’s a slippery slope of trust between brands/retailers and their shoppers. I think email is a prime example of this relationship. A shopper opts in to receive a retailer’s emails for a one time discount. From there, any number of scenarios takes place: the shopper continues to receive and look at the emails, sends them to spam or unsubscribes from emails completely. That line of communication can falter at any time, even when a shopper is a diehard fan of a brand/retailer. One email too many in too short of a timeframe, feels pushy. Over the holidays, I had one day where I received 5 emails from the same retailer – it was too much.
The shopper has to feel like the benefits outweigh any twinge of annoyance be it with emails, or ultimately push notifications. If the notifications are personal (but not creepy), timely and helpful, then shoppers will be drawn in, engage and feel rewarded if they score a deal. Such is the approach with ShopAdvisor, which presents its app as a shopper’s personal concierge. As discussed in the New York Times:
With the aim of driving shoppers into stores, ShopAdvisor incorporates data analytics that filter a shopper’s preferences and provide a way for retailers to send personalized alerts to consumers who have downloaded a brand’s app, offering discounts, highlighting sales and providing content such as product reviews that might instantly sway a buying decision.
“We’ve had at least three years of heavy-duty location-based marketing under retailers’ belts,” said JiYoung Kim, senior vice president for Ansible, the mobile division of the Interpublic Group, the global marketing company. “Everybody has the same tool, and targeting alone can only take you so far.”
What makes the ShopAdvisor approach enticing, Ms. Kim said, is that it not only precisely locates a shopper in a store but provides personalized creative content from that retailer to that shopper on the spot. Offer that shopper a 20 percent discount on some new black pumps she has been eyeing, along with a positive review from a popular fashion magazine, and a purchase is far more likely.
Through this route, ShopAdvisor doesn’t feel overly pushy and by engaging shoppers so they feel like they are “in the know,” the app has jumped that hurdle of permission and created portal of connection between beacons and shoppers, thereby connecting shoppers and brands. ShopAdvisor is just one of many shopping apps, but it seems to have made good on connecting beacons with shoppers in a promising fashion.
I also anticipate that as retailer-specific apps become more sophisticated and the use of them becomes a more integrated step in the shopper journey, additional progress with beacon notifications will happen. I think the Target Cartwheel app, is doing just that: getting shoppers used to seeing the signs in store and then getting the deal by checking the app. It’s a bit of a training wheels approach to making Cartwheel a natural part of the Target shopping experience. And with Target making beacons available in store, I would be willing to bet that beacon notifications will eventually substitute those Cartwheel signs in store and in order to keep shopping with the benefits of Cartwheel, shoppers must allow the alerts. While this approach too relies on shoppers feeling like they are getting special deals, it has the added benefit of building on their newly-ingrained shopping process tied directly to the retailer and in fact, could build on to the loyalty.
So, with all that said, is this the year of the beacon? Since my magic eight ball says try again later, I think we will have to wait and see. It’s certainly a year for beacons to gain momentum, but the extent of it remains to be seen.