Or are iBeacons guiding customers to their uninstall buttons? That answer is really up to you.
In Adobe’s latest mobile marketing survey, we found that 18% of marketers are currently using the geolocation technology, and 36% plan to use them within the next 12 months. If that statistic isn’t compelling enough, ClickZ reports that beacon installs will expand rapidly from 30,000 to a projected 3.5 million by 2018, enabling 72% of retailers to “identify and message customers upon entering store locations.”
That’s almost three-fourths of retailers with the power to get up close and personal with those customers who have downloaded an organization’s app and enabled their location services. (If you’re in need of some iBeacon basics–the technology, how it works, and so on–see “What You Need to Know About Geolocation.”)
This blog launches a three-part series about iBeacons. In order to understand how geolocation technology is changing marketing, we’ll look at the broader context of mobile marketing, as well as take notes from iBeacons’ early innovators.
By The Numbers
Let’s begin by asking and answering the question: Is there any data to back up the iBeacon hype?
A few months ago I referred to the iBeacon as “a lighthouse,” with the potential to guide customers through the 21st century marketer’s conversion funnel. Today I wonder if that statement has come true. Have iBeacons increased bottom lines and conversions, or is it still too soon to tell?
The early results are very promising, according to InMarket, a provider of mobile shopper marketing solutions. During a 30-day period from April to May 2014, inMarket conducted a controlled sample study of 25,000 shoppers interacting with beacon-enabled experiences. The results:
- Interactions with advertised products increased by 19 times for users who received a beacon message.
- In-store app usage was 16.5 times greater for users who received a beacon message.
- Shoppers who received a beacon message were 6.4 times more likely to keep an app on their phones, versus those who did not.
Todd Dipaola, CEO of inMarket, summarized the initial beacon metrics as follows: "Successful geofencing improves the consumer experience while increasing engagement value for brands ... We now have proof that consumers appreciate this value in a measurable way: They're more likely to keep apps that use beacon messaging, and they're more likely to interact with advertised products in-store thanks to beacons."
Let’s now widen our perspective: How are iBeacons changing the marketing landscape and, more specifically, mobile marketing?
The Fifth P: Proximity
Is proximity one of the new pillars of digital marketing in the 21st century? Proximity marketing may be called by many different names–hyperlocal marketing and location-context marketing, to name a couple–but no matter what you call it, it’s changing the way the marketing game is played. The deployment of beacons is changing the rules and the results.
On this subject, I appreciated a recent article on Forbes, “How Proximity Marketing Is Driving Retail Sales.” The article noted the four traditional pillars of marketing, which date back to 1960: product, price, promotion, and placement. The author then proposed a fifth pillar of proximity, which “represents the final connection between companies and consumers,” and it’s being used by leading retailers such as Apple and Coca-Cola “to close the last gap between the customer and the register.”
Hudson’s Bay Company, which includes the Lord & Taylor retail chain, is a great example of a leading retailer that is embracing beacons. In “This 344-Year-Old Company Is on Mobile Marketing’s Cutting Edge,” Adweek ironically pointed out how the organization, founded in 1670, is one of the earliest adopters and innovators of proximity marketing. When customers with a Hudson’s Bay app on their smartphones or a third-party coupon app like SnipSnap enter its stores, they “receive a welcome message. Certain departments, like ladies’ shoes, cosmetics and Lord and Taylor’s Black Brown label, will then send out specific messages around the store. Areas of the store that sell Michael Kors and Alex and Ani also plan to push out offers that are tailored towards specific groups. Approximately 10 beacons are deployed in each store, which are tied to an average of seven different messages. Social media and in-store signage will promote the beacons.”
I believe that proximity marketing should go hand-in-hand with customer centricity. As I wrote in “Is Your Organization Mobile Dedicated or Mobile Deficient?” mobile is the epicenter of the universe, while the mobile user (your customer) is the true center of this world.
In “The Emerging Technologies Of The Digital Store,” Forrester noted some early use cases for proximity marketing, such as enabling the customer’s mobile device to be used as a “key” to unlock unique, customer-centric experiences. For example, in retail, VIP customers can “hold their iBeacon or NFC-enabled phones with the retailer’s app open and unlock special display cases or fitting rooms, request associate assistance, and receive other VIP experiences.” This is a perfect example of catering to the mobile elite, being customer-centric, and creating “wow and delight.”
It’s Your Job To Guide Customers Toward The Shopping Cart
As mobile marketing teams begin to think through the use of iBeacons in the larger context of proximity marketing and customer centricity, it’s important to keep Forrester Research’s advice at the forefront of our minds: “The customer is in complete control when it comes to utilizing beacons. If his or her retailer of choice does not provide value in exchange for providing location information, or if the retailer doesn’t address security concerns, customers will uninstall their applications and opt out of location services.”
Remember, when deployed correctly, iBeacons can guide your in-app customers toward shopping carts or some other desired end, rather than toward the uninstall button. It’s up to you.
Here's what the Twitterverse is saying about beacons: