By John Bee, White Space
Retailers are going through one of the biggest shifts in consumer behavior. E-Commerce and in-store mobile usage are taking consumer expectations and shopping experiences to a whole new level. To adapt to these changes, retailers are embracing iBeacon technology as a way to close the gap between the smart online consumer and the offline retailer. But is this a wise move that can improve the customer experience? Or is it a step too far down the road of intrusion?
iBeacons are Apple-patented transmitters that can “talk to” iPhones and Android devices using low-energy Bluetooth signals. iBeacons are installed at various points within a store that reveal a customer’s precise location, enabling highly tailored content to be delivered directly to a customer’s smartphone. For iBeacons to work, customers must first install the mobile app, although Apple has built iBeacon into iOS7, making many hundreds of iPhone users open to a new era of proximity-based marketing.
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So why are iBeacons causing such a stir among retailers? And how can they be used to draw more customers back into their stores and take advantage of a whole host of customer service and loyalty benefits?
Customer Engagement
iBeacons provide a natural extension for customer loyalty strategies and tactics, and provide a creative way for consumers to redeem their loyalty points. They also allow repeat visitors to a store to be tracked and rewarded with repeat purchase opportunities.
Proximity-Based Marketing
Targeting your customer with relevant and timely messages is clearly an important determinant of customer satisfaction and loyalty. iBeacon’s proximity tracking provides highly targeted and timely product information that allows customers to quickly make decisions, thus increasing the likelihood of turning a customer’s intent into action.
Data Collection
Customers who are already part of a retailer’s loyalty program can be sent personalized offers that meet their buying preferences or complement something they purchased recently. This type of targeted, timely convenience can enhance customer satisfaction and loyalty, whilst at the same time increasing the breadth and depth of customer data being collected. Marketers can use this information to map out a context for how customers shop and travel through a store in order to improve the effectiveness of their shelf-edge and aisle-end messaging.
A Defense Against ‘Showrooming’
As smartphone devices are playing an increasing role in shoppers’ decision-making process, retailers can use iBeacons as a positive defense against “showrooming” — the act of consumers surfing the Internet on a smartphone while in-store to find competitive products and prices. iBeacon push notifications help defend that space by offering relevant promotions to customers while they are browsing in-store, thus turning smartphone usage into a clear advantage.
Store Navigation
iBeacons can improve customers’ in-store experiences by helping them navigate to the right department and locate their favorite products. They also can alert customers to the location of relevant offers, which will provide a positive experience and encourage more shoppers to visit the store again.
iBeacons — A Step Forward?
The acceptance of iBeacons will greatly depend on how retailers manage consumer data and respect privacy. Although, retailers aren’t collecting any information that consumers aren’t opting to share. I believe many retailers will tread carefully with iBeacons in the early stages. For example, Tesco is trialing the technology, but will roll it out without the marketing messages to avoid scaring customers and infringing privacy.
For me it is clear that iBeacons are an important part of the broader emergence of the “Smart Store,” and have the potential to change our shopping experience forever by enhancing the customer journey and enticing the customer right at the point of purchase.
John Bee is Managing Director at White Space, a market analysis consultancy, specializing in consumer and B2B market analysis.
