Insight: Shoppers do not seem to be open to beacon push notifications en masse, currently.
Beacons are being promoted as the next big thing in reaching shoppers in-store, touted as the answer to capturing attention while they are using their mobile devices. Target recently launched a 50-store test, Macy’s has tested with the Shopkick app, several grocers and packaged food brands have launched beacons for coupon communications, and the list goes on.
But as many as 70% of shoppers don’t know what a beacon is and consumers in multiple studies have overwhelmingly said they would not prefer to have their smartphones tracked due to privacy and security concerns. While there’s no doubt that digital technology influences sales in-store (approximately $2.2 Trillion this year, according to Deloitte) and may result in higher conversion, the question is whether or not beacons are the way to capture this opportunity.
A recent retail executive survey indicates as many as 46% of retailers have launched beacon testing programs this year, citing the ability to track and understand browsing and buying patterns, as well as target customers to aisle level, as chief benefits. But only 24% say they’ve seen an increase in sales or offer redemption.
Beacons inherently have three barriers – they require shoppers to have the relevant apps installed, necessitate shoppers to have Bluetooth turned on their device, and demand shoppers have enabled notifications within the relevant apps. Our research indicates this represents less than 10% of shoppers at any given time.
Even if they’ve got the app and Bluetooth on, an OpinionLab study last year found that 63% of consumers said they would not opt in for notifications, even at their favorite stores.
Vision: In addition to beacons, find other ways to reach shoppers on their phones while in stores.
Seems simple, right? Well, we haven’t seen a solution that has truly cracked the code.
First, we’re not sure dedicated apps are where it’s at if you are looking for a large impact. Retailer or brand apps have low penetration, and while we have no doubt those that have the retailer’s app are more engaged and the right content and value will get anyone to download, it’s an uphill battle. According to this Forrester study, 60% have two or fewer retailer apps on their phones.
We believe there is promise in aggregator or multi-retailer apps as shoppers crave convenience. Our research indicates that these apps should focus on shared lifestyle, experience, gaming or other interests, rather than simply function or benefit (e.g. coupons).
Other sensor and location- based push notifications (such as digital watermarking and wifi network sends) share the same barriers as beacons. NFC, QR codes, audio embed apps (i.e. Shazaam) and other means that enable shoppers to “pull” content are preferred from a customer feedback standpoint, but have even lower click rates.
Still, its common knowledge that consumers have their phones on and in-use while shopping. Target even said that on Black Friday last year, 10% of shoppers bought on their iPhones while in stores.
Some of our favorite alternatives include partnering and integrating with third party applications, photo scanning applications and augmented reality, as well as wifi, visual or GPS location triangulation with one-time opt-in welcomes. Exceptional environments and content, like that which we deploy in The Intel Experience at Best Buy or the Subaru Digital Showroom, engage shoppers in stores and could easily connect with phones utilizing these technologies.
We also really like notifying tablet-enabled associates that customers are nearby for enhanced personalized selling, which GameStop is testing.
As you explore ways to engage shoppers on their phones – including with beacons – contact DCI-Artform to leverage our experience, research and ideas!
Retail Science Summary
Shoppers – Get value-added experiences on your phones while in-store
Retailers – Deploy reliably and with better results
Brands – Ensure scalable results through innovation
Barriers to Purchase – The creep factor will turn shoppers away; make sure everything you do is providing value