Last October at the Salon e-commerce Québec 2017, Kaliop presented one of its latest R&D projects: a connected in-store experience using beacon technology and an app developed in React Native.
But first, let’s get back to the beacon.
What is a beacon, exactly?
Beacons are small, connected objects that use Bluetooth technology. Beacons let advertisers send personalized messages to their customers’ smart phones within a radius of up to 200 metres. In order to receive mobile ads, the customer needs to have already downloaded the store’s application. Beacons that are placed in strategic areas of the store can send customers a variety of messages directly to their phones: welcome messages, special offers and other useful information. The purpose of the beacon is to enhance the customer’s shopping experience by tailoring it to their habits and needs.
53% of in-store shoppers use their phones to decide whether or not to buy an item
According to a 2016 study conducted by Fevad, cell phones played a major role in the in-store shopping experience. In fact, 53% of visitors used their device at the point of purchase to check product information, compare prices with competing stores and read online reviews. More specifically, 84% of these visitors were more inclined to make a purchase after having seen customers’ comments on the products.
The Kaliop experience
With this important information in mind, the team at Kaliop wanted to design an in-store experience that would be useful to both customers and the retailers. We wanted to create a rich and personalized customer experience that would allow retailers to gather valuable information so they could implement effective in-store marketing strategies. Our hope was that this experience would also create a long-term dialogue between consumers and retailers.
The situation: coffee maker product descriptions and Protégez-vous magazine.
Protégez-vous is a well-known non-profit organization in Québec. Since 1973, it has published articles, shopping guides and conducted tests and assessments on consumer products, everyday technology, health merchandise, and more. As one of Kaliop’s clients, Protégez-vous agreed to give us access to its content for the experience.
More about the experience:
Today’s consumers are well-informed to say the least. This is a market where potential buyers need to research what they buy, before they buy it, and their phones play an important role in their purchase decision. Think: online reviews, comparing prices of similar products, features, etc.
We wanted to research the impact that a beacon could have on in-store conversions and we felt that coffee makers were a great place to start. They were the ideal product because they have a wide price range (can cost anywhere from $250 to several thousand dollars), they use accessories (frothers), they are relatively easy to maintain, there are videos about them, etc.
How the experience works
1- The customer is asked to move their cellphone close to the product
2- Product information is displayed on a screen above the product: price, customer reviews, demo videos, comparing features with other products in store, current sales…all displayed for customers to see. This information can be personalized depending on the type of information you want to display.
3- The customer can put the product in their shopping cart and pay at the checkout.
Examining visit data and conversion rates
This experience also served as an opportunity to imagine how retailers could analyze the traffic in their stores, in the same way that someone can manage an e-commerce site using tools like Google Analytics. You have access to the number of visits, conversion rates, promotions used, the most popular products, traffic in peak periods, the average shopping cart, etc.
To obtain these statistics, a dashboard tracks all the information gathered through interactions with the beacon and measures its influence on conversion rates.
What is the downside to using the beacon?
When using beacon technology, there are two main issues that come into play: the use of personal data and the relevance of the information sent to the buyer.
With the first issue, respect for privacy is a serious matter since the collection of data about the user is done without his/her knowledge. In the second case, approximately 40% of users were surprised to receive unwanted messages from the retailer. Therefore, the risk is higher that the user uninstalls the store’s application.
A few examples of the beacon being put to good use
Despite these two concerns, the beacon continues to appeal to many brands. Here’s a look at a few of the brands that have used the beacon to their advantage.
Falling somewhere between a traditional store and augmented reality, international chain, Gamestop, specializes in the distribution of video games, and transforms the traditional in-store shopping experience into a giant video game. Gamestop offers its customers a chance to try out different games via notifications that are sent to them based on their tastes. The information is also sent to the retailer, which can also consult the user’s data via tablet.
Last spring, Fabergé, a jeweller in the United States, organized a treasure hunt in the streets of New York. Once users had located the egg sculpture, they simply activated their location and were automatically entered into the store’s draw.
The American baseball league used beacons to ensure that important information was sent to its visitors as they entered the stadium: dates for upcoming games, videos and even good deals on hot dogs!
The Walgreens pharmacy chain uses beacon technology to target its in-store customers. Shoppers receive notifications as they get closer to the store and are sent promotions related to their purchase history or reminders about sales and coupons that they haven’t yet used.
In conclusion, beacon technology has a promising future, especially in the retail sector. It’s an interesting option for stores that want to enhance the in-store shopping experience and make smarter stores. Beacons have the potential to offer customers a more personalized experience and at the same time, collect precious information for the retailer.