Earlier this year, US pharmacy chain Rite Aid rolled out proximity beacons in each of its over 4500 stores, surpassing Macy’s in the biggest deployment of beacons in a US retail setting to date. It’s a title the pharmacy retailer is unlikely to hold for long. Global shipments of Bluetooth Low Energy (BLE) beacons are expected to exceed 400 million units in 2020, in part due to increasing enterprise and industry demand, but also thanks to strong growth in established markets like retail, acco
ording to ABI Research.
While Australian retailers haven’t been as quick as those in the US or Europe to adopt beacons on a large scale, more companies are conducting trials to better understand the potential of this technology. Retail Zoo is one such company.
About six months ago, Retail Zoo, which owns Boost Juice, Salsa’s Fresh Mex and Cibo Espresso, installed beacons in a single Boost Juice store in Chadstone Shopping Centre with the aim of improving wait times. According to Retail Zoo’s head of digital Christian Mc Gilloway, the company is now able to tell exactly how long it takes customers, specifically those who have downloaded the Boost Juice mobile app, to collect their drinks from the time they enter the store.
“We can then [use this data] to make our stores faster,” Mc Gilloway told Inside Retail Weekly. “If you’re just using beacons to collect information, you’re not benefiting from them. They have to be integrated correctly into your digital strategy.”
Boost Juice has experimented with other location-based technologies in the past, such as placing geo fences around its stores and tracking passing customers via GPS to send personalised push notifications. Mc Gilloway described these methods as “crude” in comparison to beacons, which generally have a shorter, but more precise, range. They can pinpoint a person’s instore location down to the metre, presenting new possibilities for use beyond targeted offers or mobile marketing.
For instance, Mc Gilloway said beacons could enable Boost Juice staff in any location to greet every customer by name and put through their “regular” drink order, even if they don’t actually know the customer. By integrating beacons with sales data, Boost Juice could identify customers as they walk through the store and send their information, including perhaps a Facebook photo, to staff members at the register.
“A lot of the stuff we’re working on now is around personalisation. If you do it correctly, you can bring the feel of local shopping back to a massive brand,” said Mc Gilloway.
Next year, Retail Zoo plans to roll out beacons in order to reduce wait times at Boost Juice stores and to further explore its ability to support personalised interactions.
Beyond targeted offers
Beacons are small hardware devices that transmit signals via BLE, a low-cost, low-energy version of traditional Bluetooth. Beacons today can be as small as a sticker and most use either Apple’s iBeacon protocol, developed for iOS in 2013, or Google’s open protocol Eddystone, released in 2015, to communicate with mobile devices. As long as customers have their smartphone’s Bluetooth function turned on and have downloaded the app required for the interaction, they can receive messages or prompts to perform certain actions at specific spots.
The typical retail scenario involving beacons uses push notifications to send out targeted offers to customers’ mobile phones. In this way, a retailer might alert customers to a loyalty promotion when they enter the building or offer a 10 per cent discount on jeans to those who are browsing that section. It’s the mobile equivalent of dropping coupons and flyers in people’s letterboxes.
“I think a lot of experiments with beacons have been around push marketing. That may make sense for retailers that use pressure tactics in other ways and I can see it being a viable part of the strategy, but it’s not necessarily transformative,” Steven Noble, senior analyst at Telsyte, told Inside Retail Weekly.
Rather, transformative use cases improve an aspect of the customer experience, such as Retail Zoo’s idea to make customers feel like locals. Woolworths did something similar when it trialled beacons in 2014. Before that, Woolies’ customers had to find staff instore to let them know they were ready to pick up a click-and-collect order. Beacons made it possible to identify these customers as soon they entered the supermarket. Staff could then be triggered to start putting the orders together automatically, speeding up and simplifying the whole collection process from the customer’s perspective.
It’s a template for the role beacons may play in retailers’ omnichannel initiatives going forward. And it’s one that holds obvious appeal for department store chain Myer, which announced its participation in a global beacon trial with Google just last week.
Myer’s beacons trial
While Myer did not want to disclose the particular use cases it is testing, telling IRW that the trial is still in very early days, it seems highly likely that the retailer will be looking at similarly sophisticated ways to improve the customer experience, given its ongoing turnaround strategy.
“The Myer trial is notable because it has set itself the goal of turning stores into hubs of the digital experience. So the experience doesn’t just exist on the website. It’s something you participate in when you enter the store,” Noble said.
This requires what is known as a single view of the customer. But linking customers’ online behaviour with their in-store experience, and providing all that data to a sales associate in an actionable way, is far easier said than done. The entire company may have to manage store data differently, merge information silos or restructure organisational charts, according to Noble.
“All significant retailers are aspiring to be customer-centred and have a single real-time view of the customer,” said Noble.
“What makes Myer interesting in an Australian context is that its CEO, Richard Umbers, has been quite clear that the physical retail stores will be a key part going forward.
“The question is, how do you know who’s present in a store and how do you communicate with them? You can see that beacons may play a role in that.”
Even as Myer joins a growing number of Australian retailers conducting trials of beacons, the fact remains that only two per cent of Aussie shoppers who own a smartphone have received a message or coupon when entering a store, according to Telsyte’s 2016 Australian Digital Consumer Study. “This tells me that the use of beacons in Australian retail today is minimal,” said Noble.
“I’m not anticipating a massive shift towards beacons because many retailers will no doubt focus on the technology itself rather than on the actual customer needs that they can expect to fulfil,” he said. “But a minority of retailers can definitely expect to create richer customer experiences [with beacons] as part of their overall mix.”