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To Beacon or Not to Beacon? That is the Question.

The holy grail of marketing is catching consumers right at the point of decision. This can be ultimately very difficult because decisions are made in different phases of the path to purchase. Some consumers make decisions about what they’re going to buy when pouring over the new weekly ad on the website. Some consumers make decisions after seeing a sale price on the shelf. A new technology with the potential to influence those decisions is beacons, or proximity marketing broadly. Yet retailers have to understand the constraints and opportunities involved with this type of marketing before diving in. A recent Path to Purchase expo session with Greg Chambers and Nicole Hutcheson from The Coca-Cola Company, dove further into beacons and warned both brands and retailers to tread cautiously because while this kind of marketing is enticing, it is also complicated.

Beacons have been the desired medium to deliver proximity marketing messages to consumers. The essence of proximity marketing, according to the speakers, is enriching consumer’s lives and experiences where they are in the moment. Shoppers are looking for new ways to make their lives easier now, whether through convenience, loyalty, experiences or value. They are looking to retailers to create a WOW experience, but they are also looking to feel smart about the buying decisions they are making. Technology is a key enabler in this quest. More consumers, especially digital natives, are comfortable with sharing location and purchase history in exchange for value. For retailers, understanding intimately what value is being provided is critical. Retailers can’t just “want to do beacons”, they have to ask “why?”. Beacons take data, and not just general data. As the speakers analogized, data is a lot like oil.  Oil can be drilled out of the ground, but nothing can be done with it until it is refined. It is the same with beacons and data. There are rich insights to understand, but those insights have to be mined.

Before the insights can be utilized, the retailer must determine how the consumer will come to understand the value of these notifications. Savings is the #1 reason shoppers want to use beacons, but education is the key. Beacons don’t just send offers to everyone. These offers must come through apps that have to be downloaded, bluetooth that must be turned on, and notifications that must be enabled. That’s some significant work for a consumer, and while the intent to participate may be there, but remembering to do it each time is more difficult. Retailers have to make beacons another way to communicate, or as the speakers said, another tool in the tool box.  They noted beacons aren’t the holy grail of marketing, nor will they save the business, but done correctly, they can make an impact.

The speakers left the group with some tips to making beacons effective if they are taken on as part of the marketing strategy.

  • The front door is the #1 place to have beacons enabled because the consumer is still in pre-shop mode.
  • 3 notifications is the most consumers want. 4 is seen as interrupting the shopping experience.
  • Pay attention to app downloads and inspire value. Drive center store sales by pushing products that coincide with perimeter items.
  • 83% of consumers don’t know what’s for dinner at noon the same day. Have beacon notifications at the door to drive consumers to the deli.
  • Follow the standards of beacons set by Apple and Google.

The overall sentiment from this session at the Path to Purchase expo with the Digital Innovation team from The Coca-Cola Company was that while beacons and proximity marketing are hot and have tons of potential, retailers need to understand how they fit within their total marketing strategy. Beacons take education of and acceptance from consumers. They take data and value-driven promotions. They take tracking and optimization to really make an impact. Understanding these components before making an investment into them is essential.

Why do I work at AWG? “I value the opportunity to work with family businesses. My dad owned his own business for 35 years, so it is what I know and cherish. Plus, I love food, so thinking about it everyday is a huge plus.” -Kate