The struggle has been going on for years. Brick-and-mortar stores have yet to crack the code when it comes to tracking shoppers like their online counterparts. Now, with beacon technology’s ability to not only track in-store visitors, but also send offers to their mobile devices, this segment of the retail industry has gotten a much needed shot in the arm. The technology was validated last year when retail giants Macy’s, Target and Apple doubled down by rolling it out in many of their stores. But the honeymoon phase is slowly coming to an end, with many companies wondering what the next step should be in driving real ROI from the new technology.
Shining a Light on Beacons
The current use of beacon technology goes something like this: a consumer with a mobile device walks into a brick-and-mortar store with a retailer’s app open. Using the phone’s Bluetooth, GPS or Wi-Fi (or all three) capability the shopper then proceeds to check-in to the retailer’s “virtual store” to find deals that correspond to their interests.
The carrot on the stick for shoppers is often tied to the accumulation of points, which can be traded in for discounts or gift cards. These points are gained through checking in to a physical retail store or making purchases on promotional items featured in the retailer’s app. Some retailers even give consumers points just for walking through the door.
Beacon technology closely tracks a shopper’s movement, creating a “digital trail,” which provides a wealth of data on the shopper, including:
- When they entered the store and when they left
- Which sections of the store they visited
- Which RFID (Radio-Frequency Identification) tagged items they picked up (or discarded)
- Which interactive mirrors they most spent time on and what was selected
This approach gives retailers the insights they need to both improve the customer experience and their product sales. But as advanced as beacon technology might seem, it’s not that smart—yet.
Adding an Extra Layer of Intelligence
Beacon technology is off to a great start, but there’s a glaring flaw—many of the deals and points offered to shoppers aren’t nearly as targeted as they could be. It still comes off as a blanketed approach to interacting with consumers and providing them the discounts and service they want.
One way that retailers can think of remedying this problem is by breaking the data they receive into specific demographic insights. Insights can be gained in a variety of ways. Companies can pull from their own CRM platforms for historical data on sales, product orders and customer service requests. They can also utilize transaction data to see the affect one item has on another (e.g. someone who buys a fish at a pet store may buy a fish tank) or utilize surveyed information from consumers to gain insights into their sentiments on current or future products.
For example, learning that consumers that shop between the hours of 10 a.m. and 1 p.m. generally browse and/or buy certain types of products, the retailer can use beacon technology to send relevant promotional coupons to shoppers during that timeframe. By using this information, instead of relying on the one-way approach of sending various - and sometimes irrelevant - deals to shoppers, retailers can have a smarter approach when utilizing the technology.
Make Targeting Tools Work for You
Once retailers have more insight into their customer base, they can really start to fine tune a variety of their targeting efforts beyond just beacon technology. Digital signage and interactive mirrors are two other ways retailers will be able to provide more relevant sales and offers based on this predictive data. The end result allows for more streamlined and cost effective practices for both marketing efforts and inventory purchases.
Retailers can also take this approach a step further with dynamic pricing, a method that lets retailers raise or lower prices on the fly due to demand or customer loyalty. For example, if there’s a segment of shoppers who will only buy a particular product if it’s at a certain price point, then predictive analytics, coupled with the great targeting capabilities of beacon technology, can make sure that that sale price is only given to those who need an extra nudge to buy. This way, only those who need a lower purchasing price will receive the offer.
These are exciting times as the much talked about “omnichannel experience” is truly beginning to be bridged. But with any new tool or technology, it’s important to learn how to use it accurately and effectively. And, if the new advancements are just ignored, retailers will find themselves leaving money on the table.
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