How Mobile Beacons Help Brands and Consumers

Through mobile beaconing, we will see the convergence of improved customer service, promotional strategy and brand loyalty wrapped up into one single strategy—are you ready?


FORBES | Greg Petro

Mobile beacons are suddenly the buzz–and for good reason. Facebook’s recent announcement that it will begin testing mobile beacons as part of its new “Place Tips” service has put the retail world on notice: Beacons are no longer futuristic possibilities whose time has yet to come. They have officially arrived and shown early success, and Facebook, with 1.3 billion members, is a powerful access point that will push beacons into consumers’ daily vocabularies. Facebook plans to leverage this access by delivering information about shops and landmarks to users who are nearby, connecting deals and people as well as it does friends and old classmates. But even with the participation of Facebook, investors’ questions remain: What are the benefits to both retailers and consumers? What has contributed to early retail success stories that others can replicate? And finally–how innovative will brands be at integrating mobile beacons into their overall marketing strategy?
How does it work–and what’s in it for everyone?
The benefits of mobile beacons have become increasingly clear: Consumers get highly targeted promotions and ads for the things they want, and retailers can collect valuable data on their customers’ buying habits, which can be used for future promotions, pricing strategies and marketing platforms. Mobile beaconing brings brick-and-mortar retailers one step closer to tracking the customer’s journey from initial research to final purchase, something that has eluded them while their technology lagged behind their online-only counterparts. In short, the brick-and-mortar retailers are now able to fight technology with technology.
Mobile Beacons Prove Their Worth for CPG Retailers in 2014
While there is traction with mobile beacons, investors should be looking hard at not just if, but how the technology has affected performance for those companies that have adopted it thus far, and what those retailers did to successfully implement mobile beacons.
A recent study by Ninth Decimal, a leading mobile intelligence research company, found that proximity marketing through mobile beacons had a big impact on sales in CPG retail stores in 2014. While the study focused on grocery stores in particular, it could provide a window through which we can see the impact of mobile beacons in other verticals.
  • 70 percent of consumers tried a new CPG product or brand after seeing a mobile ad in 2014–a 49 percent increase over 2013.
  • 59 percent of consumers use their mobile device while grocery shopping–a 16 percent increase over 2013.
  • CPG mobile ads drove 75 percent more store visits than similar shoppers who didn’t see the ads.
As we can see from the study’s results, not only are consumers actively using their mobile devices while shopping, but they’re responding favorably to the targeted ads delivered to their smartphones once they’ve opted in to receiving messages.

But the implications don’t end at the grocery line. During Macy’s last holiday season, the retailer implemented mobile beacons in 800 locations. According to a report from Interbrand, the seamless experience Macy’s has created for its digitally inclined customers was a big part of why its brand value climbed a whopping 343 percent between 2013 and 2014.
The success at Macy’s, along with many others in and outside the retail space, was so promising that many plan on rolling out extensive beacon infrastructures in their stores throughout 2015 and beyond.
What Will Proximity Marketing Look Like in 2015?
Right now, there is every indication that businesses will look to build on last year’s successes and make mobile beacons an integral part of their physical locations. A report from Business Insider found several trends that will drive beacon adoption this year and beyond:
  • Business Insider projected that beacons will directly influence $4 billion in sales at top retailers in 2015. It expects that number to increase tenfold to about $44 billion in 2016.
  • Half of all messages sent through beacons are coupons, and so coupon clippers will likely be the key early adopters of beacon-triggered messaging.
  • Different types of beacons will emerge. In-pocket phone beaconing, like the one Macy’s has implemented, will continue to be a staple of the proximity marketing strategy. But we can also expect to see requested beaconing, where the shopper must wave his or her phone in front of a product display to get the deal.
  • Customer loyalty programs and mobile beacons will work together to reward loyal customers for taking certain actions at the retail location.
Through mobile beaconing, we will see the convergence of improved customer service, promotional strategy and brand loyalty wrapped up into one single strategy, and not just in the retail space. Companies like Virgin Atlantic, Hillshire Brands, Starwood Hotels and others are finding creative ways of using mobile beacons to take the friction out of the customer experience, and the results are clear: 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.
A key point, however, is that the offer made by the retailer must entice the customer to engage–but in a profitable way. This can be a major challenge, but it represents the holy grail of the beacon age.

This article was written by Greg Petro from Forbes.  View our disclaimer

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