Beacons: Strong Offers will Drive Adoption

Beacons are coming for mobile marketingThere is much talk about beacons this holiday as another big department store, Lord & Taylor, officially announced that beacons will be rolled out in their retail locations in time for Holiday.

These are clearly early days for beacons, and it remains to be seen how effective they will be at driving sales in the fourth quarter.  The beacons enable offers to be pushed to shoppers while in the store.

Speaking as a focus group of one, I have been the recipient of targeted beacons for years in my local supermarket, and they have not changed my shopping behavior at all. The beacons Stop & Shop uses are imbedded in hand-held devices a shopper takes at the front of the store after scanning in a loyalty card.  Shoppers scan and bag all of their items while shopping, enabling express check out once the hand-held device communicates the purchases to the self-checkout register.  Shoppers never need to interact with store employee s.  It is a truly awesome, time-saving amenity that is very popular in my local store.  However, the popularity stems from the convenience, not the beacons.  I have always assumed the beacons are going off near merchandise that is personalized based on prior shopping behavior, but I am not really sure because I ignore them.  My behavior appears to be in sync with studies that show that engagement drops with subsequent push notifications.  My goal is to get in out of the supermarket quickly, and I don’t want the hand-held device to distract me from that mission.

For price-sensitive shoppers, though, Stop & Shop’s execution is the right one insofar as using the beacons to push deals. Deals resonate with consumers, as evidenced by the volume of online sales on Cyber Monday and offline sales on Black Friday. If the department store beacons are, in fact, pushing deals, then they will have a better chance of success.  Brands were able to gain vast amounts of fans early on with Facebook by offering exclusive Facebook deals.  Beacons can follow a similar trajectory if executed with deals at the forefront.

Personalizing the experience will also make beacons more effective. I have been buying a certain brand of perfume at Lord & Taylor for many years, and if the beacon pushed me a deal near the Jessica McClintock counter, it would encourage a sale. In these early days of testing beacons, the major retailers who are trying them are doing so via third-party apps (Shopkick and Swirl), which are not accessing a retailers’ transaction history. so the experience is not necessarily personalized.  Also, because beacons can only be pushed to people who have these particular apps installed, open and with Bluetooth on, the audience who will be recipients of beacons is limited.  Down the road, it is likely that beacons will be incorporated into retailer’s apps, but most of this year’s Holiday experimentation is being done through third parties.

It will be interesting to hear the case studies post-holiday of how beacons ultimately did in driving sales. I believe they are here to stay and will become ever more sophisticated.  In terms of offers, store-wide discounts will make the adoption soar, in my opinion.  For now, it is still early days.

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