Used in a proper way, beacon technology -- a mobile-centric marketing technology targetted at retailers -- can have a dramatic impact on the business. Use without a proper strategy, customers can be quickly turned off and out of the door.
The impact of proper harnessing beacon technology can be dramatic.
“Personalised targeting of vouchers via the VMob platform gives a 700% increase in redemption rates of vouchers compared to non-targeted mobile vouchers. Total average purchase value increase of 47% when using a targeted mobile voucher from the VMob platform,” says Christopher Dawson, the Business Strategy director at VMob.
An example is McDonald’s Netherlands which released the first version of their app using VMob technology in October last year. The app climbed to the top of both the Google Play and iTunes App stores.
How does the technology work? VMob’s beacon technology used cloud-based technology to integrate different live data points -- such as location history, in-app browsing data, local weather and social media profile data -- to personalise marketing campaigns over mobile phones.
VMob's general client base has grown recently. Its new key accounts include Fly Buys/Loyalty New Zealand and several smaller projects in the last few months, Dawson says.
Up close and personal
VMob CEO Scott Bradley says: “It’s a very personal step to start communicating with a shopper based on exactly where they are in the store and when you get personal there’s even greater risk if you get it wrong.
“Where beacons are used effectively, retailers are seeing a reaction of surprise and delight from consumers, rather than any negative back-lash.”
Be too quick to fire your beacon and shoppers will be turned off, he says.
VMob CEO Scott Bradley: Less ads, more effective ads
VMob director (Business Strategy) demonstrating beacon technology
“The real value in using beacons lies in giving retailers the ability to be very targeted with their advertising, in many cases serving less advertising, but ads served are more effective,” Bradley adds.
Shoppers should only receive beacon-related content when it’s relevant, not every time they walk past a particular item, he adds.
Extensive internal testing should be undertaken before making the beacon platform available to customers, including establishing dummy virtual store layouts to test various location based and targeting functions.
Objections to early adoption
The beacon technology takes getting use. Dawson says the biggest objection retailers have to using beacon technology is the risk of negative customer reaction to being targeted using the technology.
He adds retailers are mostly afraid of annoying customers if too many messages are pushed everytime they walk into the store.
“This is why we’ve focused on developing beacon functionality that is fully integrated in the VMob back-end - so that all the same controls around message targeting and maximum communication limits that are used across other areas of the back-end are also used to control all beacon-initiated customer interactions too.
“Other uses for beacons include validating redemptions; filtering offers; measuring visits, dwell-time or customer movements around the store; and helping customers search for a product in a physical store.”
He says retailers should start with a limited trial so that customer reaction can be closely monitored in a select location or area.
Dealing with cumbersome
The other big fear about adopting the technology is that it will be cumbersome to implement or maintain.
There are a number of ways around this depending on the size of the retailer, Dawson says.
“We’ve made sure that beacons can be managed in groups in the back end - meaning they can be setup centrally in bulk and sent out to stores across the country without requiring individual setup.
“There are also various options for powering beacons from long battery life stand-alone beacons to plug-in mains powered beacons and even beacons that fit into light sockets.
“By giving retailers the option of either a full-package VMob branded beacon, or using a range of third party beacons, we’re keeping as many options as possible open to them, while also delivering maximum flexibility in the backend for managing them,” Dawson says.
VMob is currently working with customers in the initial stages of beacon rollouts in New Zealand, Australia and Europe.
While the younger population is more prone to be converted to adopting the app that will allow beacon to tap into their data, Dawson says the biggest factor in a customer being receptive to the technology is the value which they see in sharing their location and other data with the retailer.
“The trust they have in a brand is a big factor in this, but ultimately, it’s the value that they see back from sharing the data that will have the biggest impact,” he says.
Customers are more likely to enable beacon functionality if they have the experience of being able to find products more effectively in-store or want to participate in reward programs and other incentives.
About beacon technology
A beacon is a stand-alone radio transmitter - it cannot interact with a shopper’s phone in any way unless an app on a shopper’s phone, that is specifically written to look for that particular beacon signal, is installed
Once the relevant app has been installed, a shopper's phone will interact with beacon once a signal is detected – serving information directly to the shopper. Even with a beacon-enabled app on a phone, the consumer must still grant that app access to location services (much the same as an app that uses GPS) before the app will be able to scan and detect signals from beacons that will drive content.