Will Consumers Adapt to Proximity Marketing?

Today’s constantly connected consumers are using smartphones in-store more than ever. A recent Google survey states that a staggering 80 percent of shoppers are using smartphones to make purchasing decisions. Retailers and start-ups have taken notice, and the concepts of mobile location analytics and proximity marketing are emerging out of that.

proximity marketing shopper 1
Proximity marketing is an exciting concept, but a lot of people are worried they’ll be inundated with spam if they opt in.

Publications like Techcrunch and Adweek have articles of retailers launching Bluetooth beacon pilot programs almost on a daily basis. Some recent examples include Target, Country Market and Urban Outfitters.

But when you clear away all the buzzwords, what exactly is this shift we’re seeing? It’s the world customizing itself to you. The world is reacting to your presence, specific to you as an individual.

Talking about this out in the world will get you varying reactions, from concerns about privacy issues to the idea that your phone is going to spam you with Viagra ads non- stop, but if you boil down the idea, there are some really compelling concepts here.

Personalization Is A Key Benefit

Let’s take a look at a form of personalization we all know about today. A husband and wife have individual key FOBs for their car. When the husband gets in the car, the mirrors adjust, the seat slides back, and the radio station changes to his favorite morning radio station. When the wife uses the car that evening, the car returns to her preferences. That’s an example of very useful personalization. Now, imagine if a retail store could do that for you.

We’ve seen online personalization become more and more sophisticated over the past decade with platforms such as Google AdWords and the Facebook Audience Network, and the addition of proximity marketing technologies is making it possible to expand that personalization in- store, effectively bridging the gap between digital and physical environments. There are both exciting and scary possibilities to this.

So, why can’t retailers live without it? The retailer will now be able to understand shopper behavior beyond point of sale (POS) data. Retailers currently have the ability to analyze traffic patterns, deliver personalized offers, measure dwell times, build on customer loyalty profiles, and even A/B test physical displays. And what does the shopper get? By integrating this technology into a retailer’s app, the shopper gets an ultra-personalized experience through customer-specific offers, location- specific coupons, and contextual information such as maps and menus.

But the question that keeps coming up is: Will shoppers adapt to this kind of experience? If consumers don’t adopt the technology, hockey stick graphs will never happen for retailers. I think of a Sheryl Sandburg story I’ve heard during her presentations several times. When Caller ID first came out, users were scared of it. They thought the concept of knowing who’s calling before you picked up was creepy. Now, 20+ years later, we don’t pick up our phones without knowing who’s calling. The user’s perception of the technology completely flipped over a couple of decades.

It seems a general consensus among investors and marketers is that someone will figure out and win the proximity marketing race.

proximity marketing shopper
Retail giants have already recognized the potential of proximity marketing, along with scores of startups.

Proximity Marketing Use Cases

Let’s take a look at some use cases that highlight potential values of proximity marketing:

Kitchen Remodel

You’ve finally made the decision to remodel your kitchen after 30 years, but you don’t know where to begin. You enter the kitchen department of a national hardware store and you are notified by an employee about an app that helps guide you through the complicated and expensive process of remodeling your kitchen. Upon app download, you’re given a series of easy directions that show you how to use your new app. You start by picking out your cabinets and you find a style that you like but they are not in the color you like. By tapping a swatch smart tag (tags that you swipe to receive contextual information), you are able to view additional colors available by special order. You save your style and color to your profile. As you’re walking over to pick out countertops you are notified in-app not to forget to pick out your cabinet hardware. Once that’s picked out you head over to the countertops.

The app has measured that you have now spent 20 minutes in the kitchen department. It gives you an offer for 5 percent off, incentivizing you to make the purchase today. Out of the 10 displays of countertops the retailer has on hand, most app users only spend time at four of them. The retailer learns that it may be time to change out the other six with more trendy options. Since styles may trend by region the retailer can analyze stats broken down by segments.

After finding a countertop you like, you save it to your profile and swipe a delivery tag to see how long that countertop takes to be installed. You have a question about how rugged the countertop is and you tap a button that alerts a store employee that you need assistance. The app has successfully guided you through this process in a way that makes you feel comfortable that your dream kitchen will come together perfectly.

Retail Environment

In the retail environment, smart zones and tags can be used in endless ways. Here are a few examples.

A family walks into a store with an app in hand to check the latest offers the retailer has published. After adding the coupons in which they’re interested to the app, they walk around the store. Shoppers save money and time because the app tells them the quickest route to pick up everything on their list. If a coupon is missed, the app can alert the shoppers.

The family decides to get a new TV, and after dwelling in the electronics department for five minutes, they are asked if they need assistance. They respond yes, and an employee gets a television from the warehouse for them. Next, they swipe a tag that shows them accessories, store stock information, and related products from the same brand. They can easily see which mounts work for that TV, and find the appropriate cables in the next aisle.

The app services are integrated with e-commerce and m-commerce platforms, so consumers can use ‘Buy Now’ buttons that simply send the product to their door. The family chooses not to bother squeezing the TV into their car, and instead chooses to have it delivered that afternoon.

On the way out, the app recognizes that the dwell times in the checkout areas are longer than managers would like for a good customer experience, so more cashiers are sent to the checkouts.

Outdoor Concert

A group of friends is going to an outdoor concert with several stages. The concert promoters built an app that helps concert attendees navigate the event. The app has many useful features like schedules, barcode access to VIP areas, and information on concession stands.

The event promoters also installed Bluetooth Low Energy beacons throughout the event so that the app can provide contextual information to attendees based on their locations. While standing in long beer lines, the group is notified that lines are half as long at the beer tents half a block away. When a band is about to begin playing, the friends are alerted that they better head over to that stage.

As they head over, they are pushed a coupon that gives them 20 percent off a T-shirt in the merchandise tent. Upon leaving, the app lets them know where the closest and fastest exit is, according to their location.

Brand Opportunities

Various brands might use proximity marketing to build loyalty and boost consumer engagement. So, if a shopping mall with 100,000 items on the shelves from a thousand different brands uses the technology, each brand can opt in or out of the program.

A brand could market special offers without having to invest a small fortune in on-site marketing activities or on their own app. Imagine a soft drink company doing a virtual promotion for a certain product: They could have the campaign up and running with a few lines of copy and code.

It could be deployed nationwide, or worldwide, in seconds. Imagine a flash sale: 30 minutes in which people, worldwide, could get 30 percent off a specific product at the same time, just like an e-commerce platform. And like an e-commerce platform, the brands would have access to performance analytics about the campaign they just ran. They could immediately justify the spend, while the retailer could monetize its brick-and-mortar space through the program.

The Future Is Now! (Sort of )

I believe that if developers create great experiences that consumers will adopt, marketing ROI will follow, but we need to focus on the consumer first. If we achieve that, there are many exciting opportunities ahead as our environments react to us and become more personalized.

I’m very excited to see how proximity marketing unfolds over the next five to 10 years. In the end, if developers focus on the customer experience and build them great tools, I think it becomes something more than advertising, and the benefit for marketers will follow.

About the author: Brandon R. Johnson is a digital designer who has always had a passion for technology. He thrives on taking raw ideas and turning them into business solutions. Brandon has nearly 13 years of experience in interactive design. From marketing departments to top agencies, he has developed a broad skill set that is sure to suit any client.

This article was published with permission from the author and Toptal – http://www.toptal.com/mobile/proximity-marketing-in- store

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