06 Dec Retailers Want Better In-Store Advertising, but Are They Ready?
Beacon technology is increasingly popular as an in-store advertising platform, but how can businesses build a beacon infrastructure that works?
In-store advertising is one of the most popular answers to poor statistics in brick-and-mortar establishments. One survey found that while 65% of shoppers make shopping lists prior to their trips, 60% make brand decisions after entering the store. The same Miller Zell survey found that 91% of respondents made unplanned purchases once reaching the store. For retailers, that number symbolizes a huge opportunity. The question is, how do you consistently convert in-store?
In-store advertising is not new. Promotions attached to shelves, signage sporting mascots and slogans are commonplace. Floor graphics catch a customer’s eyes as they move between aisles. Ads cover dividers at the checkout counter. Modern shoppers, however, are not entirely impressed by giant pyramids of products or flashing signs, and modern businesses know it. Many retailers are now trying all kinds of new approaches to engage customers. While many in-store advertising solutions do get some attention, the real problem is finding a solution that consistently engages customers and makes a difference in the long run.
Current in-store advertising techniques include:
- Digital screens
- Checkout counter dividers
- Floor graphics
- Flyers and signs
- Physical displays
Retailers like Carrefour, Gino Rossi, and even food and beverage giant McDonalds are finding BLE beacons to be that secret ingredient. Beacons are small radio transmitters that can communicate with smart devices. They are often combined with smartphone apps to send personalized notifications, track movements, and generate data. Beacons are able to communicate with customers on an individual basis. Instead of flashing the same message at every passer-by, smart apps can recognize which message should be sent to which customer. They can pinpoint who is walking through the front doors, what they like, and what will interest them. Instead of generalized in-store advertising techniques, they build a completely unique experience for each customer.
“The promise of beacons for retailers is you can finally tie an online persona to an offline persona,” said Vincent DiBartolo, vice-president of technology at digital advertising agency Big Spaceship. “They are no longer satisfied knowing we’ve got this much traffic on our website and this much value in sales. They want to know: this person was on my website and then they went to my store.”
Real-World Use Cases Prove Beacons Rock at In-Store Advertising
For example, luxury footwear manufacturer Gino Rossi combined beacons with purchase data to send visitors individualized offers. Basing each message on the visitors’ previous preferences and purchases, Gino Rossi was able to interact with visitors in a direct and effective manner. Their context-aware notifications achieved a click-through rate of 85%. That means shoppers were genuinely interested.
One Retail Systems Research survey found that 77% of retailers were looking into or had already implemented beacons. It seems retailers everywhere have heart the great beacon success stories and chosen to integrate proximity into their in-store advertising efforts. The question is: will the desire to use beacons be enough? Unfortunately, the very big opportunity to enhance customer interaction through beacons is, for many retailers, still theoretical. It is not uncommon to hear about a company doing a big roll-out followed many months later by nothing but radio silence. There is a very good, and very real, reason for this: though beacons are simple and easy to install, they require smart campaigns to make them work.
Why Can a Beacon Campaign Fall Short of Expectations?
How can one beacon campaign have great success with in-store advertising while another does not? The first issue with beacon campaigns relates to business goals. Exactly what a business is trying to solve with beacons strongly correlates to how successful their campaign will be. Technology is often used as a band-aid. Executives want it to work like a panacea and bring more customers, make more sales, and keep the store modernized. This approach has yet to work in most instances, because it is highly unfocused. There is a pressure on businesses to be innovative and catch the next platform. Managers want to keep up with competitors, even if they do not understand exactly what that entails. When businesses fail to fully realize the goal of their innovative campaigns, the customer loses, and their campaign falls short.
Executives often have two intentions when implementing beacon technology:
- Create new customer experiences that drive traffic to brick-and-mortar establishments
- Build an infrastructure that can be rented for branding purposes
Both of these are very smart uses for beacons; however, businesses often go about them in all the wrong ways. The biggest concern for customers is spam. They fear they will be bombarded with useless ads once they download an app. The moment shoppers receive a flurry of generalized messages, they are turned off. In-store advertising, especially when used in conjunction with something as personal as a smart device, must be crafted to help the customer.
If businesses plan to master in-store advertising, they must also fully grasp what it means to innovate. Often, firms will try to move into a new technology even when they know nothing about it. The temptation to use a solution simply because it is innovative eclipses the need to understand it. Businesses forget to fully integrate the new solution into their existing set-up. They do not craft a new marketing model or invest in making their beacon infrastructure powerful. They simply add beacons to their store and hope for the best. But there is a much easier, more effective, way.
The Big Beacon Trap
The first step to a successful in-store advertising campaign is realistic expectations. More importantly, specific expectations. Businesses must carefully consider the details before pushing forward with an in-store advertising project. Beacon technology itself is largely established. The technical requirements of a campaign are usually more than feasible. It is rarely the technology who is at fault when a campaign fails—it is the business model.
How can businesses build a better beacon business model? Download this cheatsheet to get real use cases on how to make your in-store advertising POP!
Executives must be willing to address how to:
- Drive customer adoption
- Interact efficiently with users
- Manage cost structure and expenditures
- Find valuable collaborators
- Install and maintain infrastructure
However, beacon infrastructures and in-store advertising campaigns are actually not as difficult to manage as they appear. Companies new to beacons often fall into the same trap: they want to do everything themselves. They want to start from scratch, study the technology, find use cases, plan an entire POC. However, in many ways, nearly everything in this space has been done before. Whether it is data-based push notifications, locating the right app interface, or devising ways to get users to opt-in, almost everything has been tested. Businesses looking to digitize their in-store advertising platform should explore use cases that are already proven to work. Find the right partners and business models to build your beacon infrastructures; do not start from scratch.
How to Handle Beacon Hardware
Businesses do not care about the nuances of beacon hardware—and that is okay. They want a beacon infrastructure, and they want it fast. Physical installation and maintenance is almost a necessary evil on the road to digitized in-store advertising. However, this seems to fall, again, into the trap of doing everything from scratch. There is no need for businesses to begrudgingly install and maintain beacons on their own beacon infrastructure. Digitization officers cannot do everything on their own; retailers must stop looking inward and look out. Bringing in the right external partners will have two crucial effects:
Speed: Speed is the crux of successful technology. Leading companies cannot afford to spend two years examining beacon technology. Partners can expedite the deployment process and help businesses find returns faster.
Efficiency: Solution providers with proven track records will be able to make your in-store advertising campaign better in the short- and long-term. They can also provide insight on how to measure success.
The beacon industry is not as straight-forward as many other fields of technology. Beacons include hardware, software, solutions, services, and maintenance. Partnerships and collaborations can effectively support each of these different areas. Just like you would not build your own beacons in-house, you do not need to design all your own software or do your own deployment.
Advocates have been pushing beacons as the new, holy grail of in-store advertising tools in recent years with very good reason. Beacons offer the chance to speak directly to a customer at the moment they are most likely to respond. Many in-store advertising campaigns have found beacons to be absolutely ground-breaking. ELLE recently spearheaded a campaign in malls that drove 21,000 in-store visits thanks to beacons. They completely crushed expectations about beacons because they used them correctly. It seems the real pain of beacon infrastructures has very little to do with beacons, themselves, and everything to do with how businesses use them.
The Most Important Ingredient for Success: The POC
Leading businesses already have beacons, and many more want to invest in proximity technology. Executives, however, will find themselves struggling to move forward. Perhaps they will attempt to do everything from scratch, or they will have difficulty finding the right business model to fit their needs and customers. The truth is that excessive foot-dragging and evaluation can actually be more costly than conducting a Proof of Concept. A realistic POC is the single most important step for businesses looking into new proximity marketing campaigns.
A properly done, three-month live POC will cost a mid-sized store about $35,000, and a 60-day technical demonstration could cost as little as $12,000. If supported by industry professionals, those in-store advertising ideas about beacons could become market-ready POCs in a relatively short amount of time. Effectively, the question is not whether businesses can develop and implement a powerful proximity marketing campaign; the question is whether they know where to start. It is up to executives to look ahead and make their next project compelling by investing in the right relationships and making their infrastructure come to life.
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