Beacons in Retail Mean Big Data Opportunities
Retailers around the world are still learning how to work with data. Since the introduction of the 1990s, the market has been preparing for technology to change the way we do business. Data analytics, of course, are not new. What is changing, however, are the possibilities of data analytics. The IoT means data generation, and retailers in particular are set to win big—or at least see big changes. Data means smarter campaigns, smarter resource management, and endless personalization for communications with customers.
Personalization with data is changing the way we shop. One study found: “Personalized email messages improve click-through rates by an average of 14% and conversions by 10%.”
It’s clear that big data in retail is no laughing matter. Unfortunately, it’s not always easy to manage. Despite years of talk, many companies have yet to walk the walk, and there are several important reasons for this.
One reason retailers are not yet ready to play with big data is the cost and investment. How should retailers capture data? How should they efficiently plug data their existing business? And how should they create a truly omnichannel marketing system? Despite the hype, excitement, and genuine possibilities, retailers must be prepared to answer all these questions before moving forward.
How it works
Bluetooth beacons are an incredibly hot buzz word these days. Big data, IoT, beacons—retailers want all of it. However, many retailers don’t quite understand how beacons even work. The beacon hardware is exceedingly simple. It broadcasts a single message at regular intervals that is then picked up by Bluetooth-enabled devices. This message is nothing special. In fact, it’s more or less just the ID number, indicating which beacon it is. The real magic happens elsewhere.
Solution providers design the apps and platforms that make this location information valuable. With the beacon’s identification information, an app can recognize that the user is located in the make-up section or at the exit. Again, very basic data. It’s combining all these little points into Big Data that creates insights.
Knowing that your customer entered, received and engaged with a personalized promotion on mobile is a pretty interesting data point. So what happens next? Did your users go straight for the promoted product? Did they completely ignore it? Did many similarly grouped users buy the same product? All these little data points add up to insight for retailers. But it’s up to solution providers to find out what data is valuable and how to capture, store, and display it. It’s up to these innovative companies and start-ups to turn data into the footfall metrics and heatmaps described above.
How one startup found food was key to driving returns
Startup Favendo installed beacons in the popular Les Terrasses du Port shopping center in Marseille. With 190 shops, the mall had plenty of untapped data for the beacons to illuminate.
For customers, the app used push notifications to make shopping more enjoyable. For business in the mall, the app meant insight into how customers moved both in individual retailers and around the space in general. Uptake has been key to driving results. Downloaded over 69,650 times and boasting an average 18 minute view time, the app effectively captured data points on how users moved.
72% of shoppers who stopped to eat kept shopping
Through data analysis, managers saw that too many shoppers were exiting the mall after visiting a handful of anchor stores. Other shoppers, however, would stop for a snack. Of these who stopped, 72% would continue shopping.
Looking closer, they found food options in the mall were often packed at peak times, driving away would-be diners and shoppers. Their response? Make more space in the food court. This increased dwell times of all customers who visited the anchor store by 42%.
Beacons in Retail mean personalization
Personalized promotions are the bread-and-butter of beacon popularity. Customers expect personalization, and an increasing number of studies are finding that users are willing to swap data for better experiences. One study from Salesforce surveyed over 7,000 customers and had absolute unbelievable findings.
“If customers don’t receive the level of customization they expect, they won’t hesitate to shop around. More than half (52%) of consumers are somewhat likely to switch brands if a company doesn’t make an effort to personalize their communications to them.”
That’s it. Customers simply won’t stick around if they don’t feel brands and retailers are up to their expectations. More importantly, with all the options and successful personalized campaigns out there, these shoppers will find what they’re looking for.
Beacons enable the connection of offline and online data as well as the chance to streamline omnichannel marketing tactics.
A study from Experian found that personalized promotion messages received a 29% higher open rate and 41% higher click rate.
How beacons drive personalization in retail with data
It’s all about the app. Again, solution providers are key when it comes to providing value with beacon data in retail. It’s the platform that will connect a user’s past purchases and online shopping persona with their real-world location.
Segmenting is key. 35-40 years old female shoppers who saved the same item in their online basket are drastically different from other segments, and they should receive messages that reflect their needs. If social authentication is required, that’s yet another key ingredient to personalized communications.
Data on these repeat customers is also the most valuable for retailers. A major study from BIA/Kelsey and Manta found that, of companies surveyed, 61% earned more than half their revenue from repeat customers. These repeat customers also spent 67% more than new customers.
What does this mean for retailers?
Retailers are installing hundreds of thousands of beacons are installed. A recent Proxbook Report found that data monetization and proximity retargeting are continuing as the fastest growing proximity services. IBM found that 62% of retailers report analytics and data as a competitive advantage for their company. Industry guru Stephen Statler estimated expected US retailers to purchase over a million beacons in 2016 for deployment. The only real question is how solution providers will fit into the scene. Beacon data and capabilities are increasingly coveted by retailers and managers, so how can solution providers craft apps to get the most of data? Which companies and platforms will be successful and how will they surprise us?