The Next Wave in Shopper Marketing: Micro-Location in the Retail Space
iBeacon is a specific implementation of the BLE (Bluetooth Low Energy) Standard. It is a wireless sensor, installed in any physical space that uses Bluetooth Low Energy to transmit data to a compatible mobile device. See how retailers can use this technology to offer highly relevant, in-store offers.
It’s my wife’s favorite time of the year: Shopping Season. For weeks, we’ve been showered with marketing messages from traditional and digital retailers who are preparing to be overrun by excited shoppers looking for the best deals to spend their hard-earned money on. But where and how do they find those deals on site, in real time?
Holiday Season 2013 Rife with Missed Opportunities
Over the past year, I have spoken to a lot of thought leaders and startups in the retail space about some of the emerging, innovative smart technologies. I had anticipated their rollout by some large retailers by now, since they’ve been out for a while. However, when my wife and I got our shopping season started last weekend, I was very disappointed by the lack of actual implementation. Instead of seeing some of the great retail technologies in play, it was business as usual with couponing and flyers.
So what was I expecting? What should have been implemented?
When Apple released iOS7, one of the tiny features they mentioned briefly was iBeacon. By briefly, I mean it was mentioned for just one slide without any further explanation.
Initially most people saw iBeacon as a competitor and possibly the “death” of NFC. However, a lot of savvy retail marketing minds quickly realized its broad potential. So what is iBeacon?
First of all, iBeacon is a specific implementation of the BLE (Bluetooth Low Energy) Standard. It is a wireless sensor, installed in any physical space that uses Bluetooth Low Energy to transmit data to a compatible mobile device.
Branded as Bluetooth SMART, BLE operates on devices that support the Bluetooth 4.0 specification. Right now, these include Apple’s iPhone 4S, iPhone 5, and all tablets from iPad 3 and up; plus new Blackberry phones and Android 4.3 smartphones. Some other devices can be equipped with a dongle to add Bluetooth 4.0 support.
BLE uses less power than Classic Bluetooth (batteries last up to two years), making iBeacons easier and less expensive for retailers to implement, and it operates within a range of up to 150 feet (much more than NFC’s approximate 4 inches). It allows any BLE-enabled device to take geo-location to the next level: micro-location.
So how can this technology help shoppers and retailers?
iBeacon and Retail Marketing: How It Works
A mobile user with a BLE-enabled device can navigate and interact within hyperlocal geo-fenced areas via iBeacons, and can enjoy interactive experiences indoors. This also opens the door for tremendous potential in retail advertising.
Unlike GPS (which relies on satellites and line of sight), iBeacon is all about proximity and works indoors. Retailers can place beacons around departments, in aisles, in front of the store; anywhere they and their customers will benefit from the ability to alert customers’ apps about specials, draw directory maps, or provide information upon crossing into a micro-location.
It’s a new way to “showroom.” A consumer can view a product online and then go to the store to sample it and purchase it; the iBeacon improves in-store navigation by telling the consumer where it is as he enters the particular micro-location. I’ll use the example of my wife, who loves to shop for shoes, to illustrate how this micro-location works.
Generally, her shopping journey starts by conducting some online research and product comparison/ reviews. As she narrows her decision, the site will inform her about local availability and she marks/likes them. She uses traditional mapping info to find the nearest retailer and off we go to the mall. Here’s where iBeacon comes in.
The retailer can place the sensors throughout its aisles and assist my wife, armed with her BLE-enabled iPhone, to find the shoes she looked at online with in-store mapping.
As she enters the mall or store, the local iBeacons communicate with her phone via BLE. The different iBeacons will tell her the location of the shoes she wants (pumps, flats, dress shoes, etc.), use local iBeacon data to navigate her through the store, and inform her about specials and item information as she stands in front of them or enters each micro-location. In addition, the iBeacons can cross-promote merchandise by navigating her past specific aisles and products.
iBeacon Potential for Retailers
With beacons and apps using iBeacon, retailers can now:
Send ads and promotional messages to targeted shoppers as they approach a micro-location with a mobile device.
Trigger alerts about a sale that is highly relevant to the shopper’s location-the aisle or department, for example.
Send different offers to customers based on more personalized profiles and relevant value.
Provide product information to other shoppers.
Connect real-time offers within the micro-location to specific customer loyalty programs.
The technology allows brands to proactively push reminders based on prior interactions on the company’s website (“You asked us to remind you to buy printer ink next time you are in a store that sells our product”), send links to how-to videos, or cross-sell or up-sell recommendations based on products viewed. And it does all of this while the consumer is within the beacon’s (and product’s) micro-location.
Benefits of Micro-Location Technology
Among its many benefits, micro-location technology offers an opportunity to boost in-store customer service. The customer can turn herself into an iBeacon through her mobile device, and alert the store that she might need sales assistance. How? The customer can press a help button on the store’s app to let a store associate know exactly where she is standing, and the iBeacon data also lets management know who is lingering longer than the average time within a certain department or aisle. Pretty slick, right?
Here’s the most exciting part for me: data and lots of it! With the data iBeacons are collecting, we can analyze shopper behavior, such as routes they take through the store or purchase patterns, shopper density and time spent by area, and much more. Retailers can use this data to conduct in-store A/B testing in real time, with the potential to positively change the sales transaction.
Let’s say we can see that 5000 people were in front of a specific product or shelf (suggesting a certain level of product popularity or purchase intent), but sales or RFID data shows us that none of them were bought. This could indicate an unfavorably high price or that a certain percentage of savvy shoppers did some online research on their mobile devices while standing in front of the product and perhaps found another retailer with a better offer (old-style showrooming).
As a test, the store could push a single-use coupon/offer to the next customer that stands in front of the product and try to ascertain what threshold is needed to initiate a purchase. It’s in-the-moment testing, based on iBeacon data and its potential as a sales booster is unlimited and still untapped.
Real-World Application: Macy’s Shopkick
One of the country’s oldest retailers, Macy’s, is taking the lead in creating a true omnichannel shopping experience.
It has just implemented the Shopkick shopping app, with closed beta trials, in New York and San Francisco. Additional Shopkick retail partners are slated to follow (Best Buy, Crate and Barrel, JC Penney, and Target among them) nationwide. Macy’s is the first retail environment to implement this micro-location technology. The Shopkick app is available on iPhone and Android devices using version 4.3 or higher.
Shopkick lets shoppers flag items they want, then its ShopBeacon will ping users in the store with offers on those products and others they might like as they approach the items or department (the micro-location).
It can be tied in to at-home browsing done in the app and send shoppers reminders about desired or viewed items, sales, and features in the store.
Additionally, customers who have opted in will get other messaging as ShopBeacon automatically opens the app and triggers other actions such as advising the shopper about his/her loyalty points balance. I will be following this rollout closely and will be very interested to see how it goes. See how it works here:
In-store beacons and micro-locations provide enormous potential for retailers to connect and interact with customers in super meaningful ways — in the moment, in the aisle or department. This even goes beyond what they can do with geo-fencing, which is a game changer in itself, in the world of mobile marketing.
I hope to see many more in-store applications of this amazing smart technology in 2014.