Beacons and proximity marketing for retail: The why, how, when, who and what.

Why should retailers deploy beacons?

It’s easy to understand the hype and expectation surrounding beacon technology in the retail sector. The promise is an exciting one. Put simply, beacons communicate with beacon-enabled devices such as smartphones. In a retail context, one key application is to indicate when and where a customer is in one of your stores, via their mobile app.

We’re seeing beacon technology being used to improve the customer experience within some clearly defined retail use cases such as click and collect and customer loyalty.

But despite a number of trials and deployments, we’re yet to see beacons really take off as a means for triggered retail marketing messaging. It seems the jury’s still out.

The missing link is customer context. But before I explore this further, it’s worth revisiting what beacons can (and cannot) do.
 

How: Back to beacon basics

A beacon is a small piece of hardware that can emit and receive Bluetooth Low Energy (BLE) signals.

These signals can be picked up by any Bluetooth-enabled device, such as a mobile phone. But for beacons to work, a couple of criteria must hold true:

1) The customer must have a beacon-integrated app installed on their phone,
2) The customer must have location services enabled and Bluetooth switched on.

 
The June 2015 launch of Google’s Eddystone beacon for Android devices means that, unlike previously, beacon technology is not confined just to iPhone users only.

It’s also worth clarifying that beacons (on their own) do not send messages. But when deployed in conjunction with proximity management solutions such as that provided by the Localz platform, the location information they provide can be utilised for a variety of purposes. For example, to:

• Trigger customer-facing messages and offers through platforms like Horizon
• Gain insight into customer footfall and in-store behaviours
• Empower shop staff with valuable insight about customers who are in-store
• Enable click and collect in a more efficient and personalised way

When a customer is in your store…

A range of proximity technologies exist such as geo-fencing, GPS, NFC and WiFi. But the key advantage that beacons provide is the ability to pinpoint proximity with more accuracy to a distance as little as ten centimetres.

This provides a valuable new piece of context that retailers have never really had in a digital way before – knowing exactly when a customer is in a specific location within (or just outside) your store.

Beacons open the door to a range of opportunities for “right-time” triggered experiences. But location data in isolation is insufficient to deliver the relevant messages and experiences desired by brands and customers alike.

The ability to reach customers on their smartphone is one thing, but doing so with relevant and timely content is the key.
 

Who are you talking to?

For proximity marketing to really deliver, it must take account of more detailed customer context than just their location. Why? Because in the same way that “batch-and-blast” email is ineffective and annoying, blanket messaging that’s triggered by proximity or beacons is not the answer either.

Proximity-triggered messages need to be targeted, timely and relevant to every recipient, and this requires a layer of additional insight beyond the location-event alone. For example:

• Demographic detail – their age, gender, etc.
• Purchase data – what products have they bought?
• When did they last buy from you?
• Are they a member of your loyalty scheme?
• How are they feeling about your brand?
• What’s their customer persona?
• Are they at risk of churn?

Simply knowing that they’re in your store is not enough.

What is needed and what next?

For beacon technology to deliver a positive return on investment, a number of dots need to be connected.

• It must be part of a broader strategy for app engagement: There’s little use deploying beacons if your customers don’t have your app installed on their phone.
• A layer of insight needs to be applied to decide what message to send to each customer, or whether to send a message at all.
• It requires technology that harnesses customer insight in near real-time.

 
Proximity and customer context: A match made in marketing heaven?
To be truly effective, real-time, beacon-driven messaging needs to be timely and relevant.

At HTK, we’re excited to be working in partnership with Localz to combine their real-time micro-location capability via beacons, NFC, GPS, WiFi and geo-fences with the rich customer insight and messaging capability of the Horizon Digital Marketing Hub.

We’re bridging the gap between microlocation and customer context, providing an end-to-end solution for relevant, targeted messaging. Please feel free to get in touch to find out more.