From 2013 beacons technology started to become the new hype, also thanks to Apple iBeacons launch. Beacons were welcomed as the marketers dreams coming true. Enabling a more granular location awareness compared to GPS and being able to target customers with relevant, personalised and appropriately timed messages, beacons poised to transform how retailers, events, transit systems, museums and educational institutions communicate with people indoors.
The reality? Beacons technology has been experimentally piloted by big retailers (Macy’s, Virgin, Walmart, …) but not fully adopted (yet) by many, especially in Europe. Despite the potential revolutionary applications, consumers interest seems to be tepid and current implementations appears to be more a trick to generate PR coverage than a revolutionary approach to the in-shop experience.
Last week I was in London, attending the Nielsen Norman Group Usability week, and I took the opportunity to scout for beacons implementations. My first stop was Regent street: The Regent Street App made the headlines last year: a one-app-one-street taking advantage of location-aware beacon technology to deliver timely, personalised, context&location-relevant content like discounts, (new) products promotions, special offers and alike to smartphone owners shopping in proximity. The Regent Street App beacons deployment is quite innovative: it doesn’t promote an individual brand or a single shop or a chain of stores, it’s, instead, a multi-retailer implementation covering ca. 1.5Km and more than 130 shops. Design and usability: the app has a pleasant design and it scores well as usability. It doesn’t require a subscription, it asks permission to use your location data and through a simple brands/categories swipe it investigates your shopping preferences. Then the app is supposed to start sending you notifications based on your brand affinity offering discounts and alike. Targeting and content: unluckily the targeting is not yet perfect -I got not only offers related to womenswear, the category I selected- and push notifications are often poorly crafted trying to promote a product or a loyalty program…without even a clear call to action. I checked some blogs and it seems that others shoppers had similar experiences. Read Barraclough&co blog post for a full report. Visibility: the app is mildly mentioned on Regent Street Twitter/Facebook pages and advertised only on the footer of their website.
My second stop, a must do during Christmas season, was Harrods. Surrounded by shining gold decoration, Egypt style stairs, luxury clothes, too precious to be true jewellery, I downloaded the Harrods iPhone app eager to enhance my in-shop experience thanks to location based technology. Scanning some of the rooms I saw several beacons placed around. But..I couldn’t find any personalised offers based on beacons technology. It seems that beacons were given only the function to track how many people are visiting the store.
Is beacons technology just an empty buzz-word intended to be over in 2016?
That’s not the right question. It’s not a matter of technology. It’s a matter of understanding what’s the value of using a technology. Current implementations are clearly showing that retailers are often replicating on a new technology a traditional way to communicate. Often not considering the overall customer experience and how new technologies and traditional channels could benefit and enhance each other. If you’re going to send shoppers a push notification while they’re walking inside a mall, you should provide them a (personalised) content boosting the shopping experience and not the same printed promotion they will notice as soon as they will walk towards the shops windows. When downloading an app and accepting to receive push notifications, customers are trading their preferences and personal data expecting to receive a service genuinely useful. If this expectation is betrayed they will quickly (and rightly) switch off.
Analysts forecast that by 2019 there will be about 60 million beacons in use. It means shopping malls, individual shops and streets saturated with beacons. The math is easy made: all the smartphones developed during the latest 2 years support beacons technology. And it’s not only on iOS. Google launched Eddystone few months ago, permitting to retailers to deliver location based messages to consumers, not only downloading an app, but as well through browsers (Eddystone protocol permits beacons to broadcast a web URL). It means breaking an adoption barrier. And Eddystone can be implemented by any Bluetooth-equipped device: light bulbs, home security systems, thermostats, thermometers could collect specific data (location, temperature, humidity) and send messages to nearby Android smartphones.
So are beacons here to stay? Probably beacons will stay for the next 4 or 5 years or, better said, they will stay until the raise of another technology, good enough to compete with the cost-to-benefit ratio. What we should better ask is:
Are retailers ready to profit from the opportunity? The opportunity to offer a truly über personalised and revolutionary in-store experience thanks to contextual and not-contextual data collected through smart devices, apps, social media, websites, loyalty programs, third-parties. The opportunity of predictive marketing and “smart” retargeting campaigns – hopefully we will get rid of the stalking banner screaming to buy the same pair of shoes you just bought! The opportunity to exit from the seasonal/spamming offers to start building a truly long-term and personalised relationship with their customers.
Shoppercentric in July published a report, interviewing +1000 UK shoppers. The outcome? Retailers are failing to engage with shoppers in the right way. Some data: 70% of UK shoppers have a smartphone, 30% of them have used their smartphone to shop in the past month, 1 in 3 have shopped through an app BUT just 1 in 10 regularly use mobile apps as part of the purchase process. And what people do on their smartphones while shopping? 47% share ideas, 29% compare prices, 20% look for product information, 17% share photos, take pictures as a reminder, store location and browse – with no intention to purchase. This suggests that retailers are failing to provide the right content. Consumers are checking internet via smartphones while shopping. Since they can’t find the right content on mobile apps, they open the retailers’ websites via smartphone. I’m pretty sure that often they will suffer from a bad user experience, not finding the information they are craving for, due to a not responsive design website - only 20% of top 200 retailers worldwide has a responsive design site.
Are retailer just slow on upgrading the in-store experience or do there are other reasons? In-store product&price comparison via smartphones are amongst the preferred customers activities (49% in UK). Retailers consider price transparency either as a distant enemy – “only early adopters are checking prices while shopping” either as a threat to be faced by activating a range of protective behaviours. They fear margin shrinking, to fail to keep their price advantage against competitors and, in sum, to lose sales. Many sales. Shoppers can probably discover they can buy the same item on amazon.com at 15% less and get it even delivered at home. For free and in few hours. But clumsy hiding information to mislead customers won’t help. Shoppers are increasingly questioning the prices behind the products they buy. The actual trend is the total pricing transparency: not only sale pricing, but as well production cost, labour cost, distribution cost, duties are expected to be transparent. Retailers are often failing to consider price transparency as an opportunity. The total transparency should be leveraged as an advantage, as a tactic to “romance” the brand, highlighting why the brand is different and better. Retailers efforts should be focused on identifying which are the costs – purchasing incentives, superior services, higher quality, assortment, personalised offers, shopping environment – consumers perceive as added value, worth the price. Short-term tactics? Personalisation and loyalty are the keywords: emphasise the purchase incentive over the single item price, reward with the “best price” the truly high value/loyal customers, design and promote über personalised membership/subscription models where savings are linked to quarterly/yearly contracts.
The long term goal? To strengthen the brand equity developing a broader value proposition, a personalised and trusted relationship with customers. Retail startups like Everlane or Honest by are surfing the wave. They got that trust matters. Everlane encourages consumers to “Know your factories. Know your costs. Always ask why.” Radical transparency is the new motto. Everlane publishes the full break down of their production cost, claiming that one dress, for instance, sold for $98 at Everlane, would cost $190 in a traditional retailer. On Honest by website you can read “Honest by offers products with complete transparency in price and manufacturing, creating a new paradigm in fashion and retail“. And they strongly benefit of an active presence on social media, transparent by nature. Sharing means caring, in our interpersonal relationships and also in our relationship with companies.