EXPERT COLUMN: Mobile Proximity Marketing on a Shoestring Budget

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EXPERT COLUMN: Mobile Proximity Marketing on a Shoestring Budget

By Bill Carmody - 10/16/2013

This week I was in Las Vegas and one of the hot topics being discussed at the Money2020 conference was the impact of Apple’s iBeacon. Beacons, essentially, are small wireless sensors that you can place inside any physical space that transmit data to an iPhone.

For some time now, manufacturers and retailers alike have looked for the best ways to leverage smartphones as part of the enhanced in-store shopping experience. Experiments with QR codes and SMS programs have failed to yield the kind of mass market adoption that was originally envisioned. Likewise, NFC (Near Field Communication) technology has never really taken off, despite significant investments from the payment industry, including Google Wallet.

So why should iBeacon be any different?

iBeacon uses Bluetooth Low Energy (BLE) and comes standard in Apple’s iOS 7; it’s also backward compatible down to the iPhones 4 and 4S, requiring nothing more than upgrading the phone’s operating system to iOS 7. There is no hardware or additional software required for consumers to purchase or install. In other words, if you have an iPhone, you can simply choose to turn on iBeacon and you’re in business. And, in case you were wondering, going forward, Google’s Android version 4.3 also supports BLE, which means it’s iBeacon compatible. This means that consumer adoption for programs using this technology is built in from day one.

And the cost to implement this technology is dirt cheap. Beacon transmitters have a range of 50 meters (or 2,500 square meters) and you can find them at Estimote, which is taking pre-orders of $99 for three beacons. This means that a retailer can “light up” a store for, at most, a few hundred dollars without replacing any existing hardware or POS systems.

Most important, however, is what iBeacon can do in terms of enhancing the shopper marketing experience. Let’s start with the basics. With iBeacon, retailers (and manufacturers) can now provide detailed walking directions to the precise location in the store where a product is located. Digital circulars, including coupons, can now be transmitted – not to mention updated – in real time. And of course, as privacy advocates will point out, retailers can use these beacons to track real-time traffic patterns by day, by minute and by shopper profile.

This is where things start to get interesting. Think Waze (the company Google recently acquired that maps real-time automobile traffic patterns using data visualization) meets Paco Underhill’s Envirosell shopper marketing study – all the time … in real-time … forever.

I’m not talking about a sample, here. We’re talking about having access to the majority of your customers' shopping patterns each and every time they enter your store. What kinds of insights could you glean from knowing how long your customers hover in an aisle or over a particular product line before they walk away or place an item in their shopping basket? It’s as if you just added Google Analytics to your physical store. It’s the real-life equivalent of being able to analyze page views and click-throughs. Except that you’re analyzing retail traffic patterns, hover zones and purchase patterns mapped against information and offers provided throughout the shopper’s in-store journey.

And if that isn’t exciting enough, let’s go a little deeper. Let’s assume your customer has given you permission to link her loyalty card to her mobile phone (in exchange for offers and a better in-store experience). For the first time in history, you now have her past shopping history combined with her real-time proximity in the store. You know what she bought on her last several visits and can begin to predictively model against what she’s likely looking to buy in that aisle today.

For the first time, shopper marketing’s big data has the potential to be incredibly insightful and really interesting on a “just in time” basis. And that’s just the beginning. When you start to overlay simple third party data such as today’s weather, you can begin to see entirely new patterns emerging, and, in turn, direct your management team to contract or expand inventory of individual product SKUs based on these patterns.

The ultimate retail experience will be a delicate balance between the digital equivalent of a clean store policy and continued experimentation with forward thinking manufacturing partners looking to further enhance the in-store shopping experience.

[Editor's Note: For more on this topic, please download Trepoint’s latest whitepaper, Beacons: Get to The Point.]

Bill Carmody is the CEO of Trepoint and a guest columnist for Progressive Grocer. He can be reached at [email protected].