It’s no surprise that bricks-and-mortar retailers are under increasing pressure to create dynamic shopping experiences in order to push back or control online sales to some degree. The need to encourage customers to return, either to browse or to repeat purchase in-store, is one of the key factors behind the use of beacon technology in the retail industry as it strives to remain competitive. Tapping into impulse shopping and the desire to ‘have it now’ have always helped to boost sales.
Beacons are small and typically unseen devices that use Bluetooth low-energy (BLE) wireless and geo-fencing technology. They proactively ‘listen’ for a signal when a customer is within a specified proximity to a beacon so that customer location data can be captured in store and other significant places. More importantly, as the customer has ‘opted in’ and downloaded a retailer’s or another company’s branded app onto their smartphone, it means that the app can link location data with other sources of customer information at the organisation’s disposal.
This increases the ability of companies to deliver a highly personalised experience, tailored to meet individual wants and needs, when it matters most. And it addresses all the permission and data privacy issues at the same time.
Fortunately the popularity of mobile shopping apps is on the rise and the willingness of shoppers (77%) to share their location (provided they get value in return) is expected to result in 72% of retailers implementing beacon technology within the next 5 years (Beaconstac). It has already starting amongst big brands. McDonald's recent ran a proximity marketing study in Istanbul in which beacon-enabled promotions were offered to customers. Across 15 restaurants, the company achieved a 20% conversion rate, boosting awareness of a range of new products.
There’s a huge trend towards personalisation of the customer experience and a wide range of businesses, spanning from hotels and sports stadia to retailers could create more dynamic interactions with their customers, simply because they are more willing to engage with a brand when they are already in situ. Research in the US has shown that four in five smartphone users would like search results to be customised to their location so “geo-targeting” offers an opportunity for Per Per Click (PPC) adverts to capture a much more receptive audience.
Beyond the straightforward promotion angle, there’s a huge capacity for marketers and researchers to take the concept of “in-the-moment” feedback to the next level. Combining location data with multiple other sources of data, such as past behaviours or purchase history, allows brands to anticipate customers’ future needs and ask the right questions at the right time to better enable them to meet those needs. There are a lot of potential use cases, but we’ll focus on a couple of them here.
Firstly, there’s the fairly obvious ability to get a real-time view of the customer experience. This is now a key differentiator in many markets, and it follows that location technology should also be regarded as an integral part of customer experience (CX) and market research (MR) programmes targeted with both understanding and leveraging key customer behaviour. Asking customers questions while they’re in-situ not only reduces issues caused by failure to recall, but also enables businesses to act quickly in some cases and prevent negative word of mouth.
It’s important to consider, of course, that customers won’t want to be bombarded with “yet another survey” every time they hit the high street. So the solution to this potential problem is taking data integration seriously. It’s about correlating location-based data, including path to purchase or non-purchase and promotion conversion rates, with other rich sources of customer data, such as purchase patterns and demographics. This enables businesses to identify and selectively trigger the ‘next step’ with individual customers, potentially at the very moment when they are making a decision to purchase.
A second opportunity which could have a huge impact on the ability of brands to improve promotions and increase revenue, is the ability to perform “live” A/B testing. By correlating data about known customers, companies can use predictive analytics to understand likely future behaviour. Location data then offers a unique opportunity to understand more about their actions at the point of purchase – or indeed, non-purchase. For example, if two known customers of a particular brand of tea both enter a store, they could be presented with two different promotional offers – maybe 20% off for one and a free mug for the other. Background data about those customers could define which offer they receive, and a very short survey could promote understanding of which has the biggest impact on their subsequent behaviour.
The heady combination of predictive analytics, sample selection and personalisation of marketing message has two benefits. Firstly, the customer receives the tailored experience they may now expect, while the organisation is able to pinpoint specific information to help them define the most effective promotions to use on a wider scale.
Insight teams looking to conduct deeper analysis of customer behaviour will clearly benefit from combining the growing customer preference to communicate with brands via mobile devices with beacon technology. Businesses would be wise to incorporate this instant form of feedback as they strive to create relevant content, fine tune processes and secure increased sales by tapping into real-time, emotion-led feedback. Combined with more traditional research, and integrated with key operational and financial systems, perhaps beacon technology really could light the way towards a much improved customer experience?
By Miguel Ramos, Mobile Specialist, Confirmit
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