In 2015, beacons directly influenced $ 4 billion worth of sales in US alone. 20% of digital marketers have already adopted the new technology. In less than four years, 400 million beacon devices will be sold worldwide. And IoT’s influence on retail and e-commerce stretches far beyond. How can your company benefit from using beacons and other smar in retail?
Read on to find out!
Beacon technology: the next frontier for mobile advertising
Originally developed by Apple in 2013, beacons are IoT devices that detect smartphones via Bluetooth. If you download a shopping app and enter a store that uses beacons, you will receive coupons, relevant ads and discount notifications. The devices also track your movement in a shop and collect data on your purchases to deliver highly targeted ads in future.
Once again, smartphones have become a powerful channel of customer acquisition.
US enterprise spending on mobile advertising has grown from $ 770 million in 2010 to $ 4.1 billion in 2012 (and the number is expected to reach $ 32 billion by 2017 in the USA alone).
Although the general consumer response to mobile advertising has always been somewhat lukewarm, think with Google claims 88% of clicks on mobile ads are closely related to organic clicks (thus, organic search results won’t be able to replace ads if you stop an advertising campaign). According to Dirk Rients (DDB Worldwide), consumers are pretty open to mobile ads – as long as you provide them with relevant content.
Over the course of time, digital marketing has seen a lot of attempts to customize mobile (and in-app!) advertising.
Beacons in retail: IoT is happening (at last)
The Starwood Hotels company has replaced room keys with beacons in some of its properties. The Canadian Museum of Nature employed Estimote beacons and a mobile app to educate visitors on evolution. The Miami International Airport created a beacon network to improve passenger service and notify staff.
Beacons can be found anywhere. But it’s retailers who will benefit from using the smart technology in the first place.
We’ve tried to bring diverse examples of how businesses use the beacon technology in retail (gamification at Macy’s, the fancy Target app and Lord & Taylor’s super-relevant ads). The reality is quite different. Shopkick says 50% of all beacon solutions are limited to coupons. Although it’s a huge money (in 2013, mobile couponing influenced $ 3.5 billion in US retail sales), this road leads to nowhere. After all, customers do not want ads. What they want is high-quality service. And yes, they’d like to be in control of when & how they receive personalized content.
IoT marketing, and where customer data really goes
The main problem with beacons (and other IoT devices if truth be told!) is that businesses do not analyze the data generated by smart gadgets. Also, there are some Internet of Things security issues (the lack of data encryption standards in particular) to be overcome. But it doesn’t prevent companies like L’Oreal, Pernod Ricard and P&G from building connected products.
The latter, for example, developed a programmable Oral B brush that displays news and weather forecasts and sends user brushing data to an iOS/Android app. The company’s plans for IoT are bigger than that. P&G is currently testing Thread – the Internet of Things protocol that was created by Nest, Silicon Lab and other tech gurus. According to Alan Goldstein, associate director at P&G Ventures, they chose Thread since it was specifically built for IoT and could finally battle the interoperability issue (that is common for most IoT devices). The company’s major goal is to connect as many home appliances as possible to bring user experience to the next level.
You see the difference, right? Kevin Ashton, the very man who once coined the Internet of Things term, urged enterprises not to abuse the new advertising channel. If you run a store & consider building a beacon-triggered mobile application, you should always stay true to your customer and treat his data the right way.
According to 2015 2nd Watch survey, 60% of US IT companies were using IoT-generated data in digital marketing, and almost half of them managed to meet their goals. Whether you’re going to adopt beacons or use printed sensors (like Absolut), make sure to address a reliable vendor who has previously delivered IoT projects & is capable of building a secure application.