How Proximity Marketing can drive Retail sales in India

Posted on Posted in Beacon, Blog, Events, Retail

This article touches upon Proximity Marketing using “Beacon Technology”

Proximity Marketing

India ‘s retail market ,currently pegged at $600 billion is expected to almost double by 2020 .Key drivers for this growth are rapid urbanization , income expansion and increased consumerism .Organized retail is expected to triple to $180 billion and ecommerce quadruple to a $60 billion market. The statistics mentioned above have been listed to highlight the outlook for India’s retail market – the fact that it is poised for aggressive growth. Supermarkets , hypermarkets , ecommerce and  unorganized retail are all set to compete against each other in this growth story .While marketers will look at the conventional 4Ps- “Product , Price , Promotion , Placement” , an additional P with “Proximity” could be a game changer for retailers.

Proximity of the product with respect to the customer is used as a base for a greenfield concept called “Location Based Marketing”. Retailers with the help of “Beacons” can push pertinent content to customer’s smartphone based on his/her location in the store.The scope of how beacons can beused  is quiet a handful .Before we jump into the  details here is a lowdown on what beacon devices are and how they interact with applications built in smartphones.

Beacon Technology

Beacons are devices that use blue tooth low energy (BLE) to transmit signals to smartphones and tablets in a short range (70 metres).The signals emitted by beacons are radio waves, hence there are not limited by physical barriers like walls and doors. The beacon signal awakens applications on beacon ready devices. The application references a CRM database /analytics platform looks at the customer profile and generates customized content.

The customized content is sent as a push notification to the client who has “opted –in” to receive such notifications in the retailer’s application .The content could range from promotional coupon code, product information, discounts and reward points.

Use Cases in Retail

Consider these scenarios mentioned below and discover how beacons can help increase “in-store”customer engagement and provide insights to drive sales.

  1. Customers are outside a store and gazing at the mannequins/billboards placed in the doorway. While they are contemplating entering the store, the beacon in the mannequin/billboard pushes notification about the product on display piquing interest in the customers. Promotional coupon code tothe customer is also sent. Customer is prodded to enter the store basis the “proximity” marketing efforts of the retailer.
  2. Inside the store, customers move across departments and product categories. Beacons installed department /category wise can help feed data for instore analytics. Data collation can be made towards the departments visited. Subsequent conclusions can be drawn to verify if sales in any category was up/down ,whether a new product display worked and if a particular department was too crowded leading to improvements in store layout.
  3. Based on the past buying behavior and after identifying a frequent customer, lucrative discounts can be pushed. This can help increase brand loyalty, increase sales andhelp customer retention in the face of tough competition.
  4. Post a purchase, customers loyalty program can be managed via the beacon. Customers can provide feedback via the app. Customers’ reward points and redemption offer can be sent as a notification.
  5. Thanking the customer for a purchase, coupon codes for future purchase or one they can share with friends can be sent. This will again be an attempt to drive sales.

FAQ

While use cases have been discussed, there are a few questions that might crop up with when it comes to implementation.

  • Arudimentary question couldbe, why should a customer “Opt In “to receive the messages Are there security concerns of allowing a retailer access movement in the store?
  • The answer to this question is anaffirmative no. The very fact that customers visit the same retailer regularly is enough proof that there is brand loyalty.Further the retailer has access to customer spend and SKU wise buying behavior through the membership card in which reward points are accrued .Opting in to receive beacon messages via the app is only an extension of allowing the trusted retailer to send the customer customized promotional offers.

2) What would be the cost incurred?

  • With stiff competition from the online e tailers, brick and mortar retailers are looking for ways to share offers /promotions with clients. Currently retailers incur cost of issuing a pamphlet to list their offers .Other option would be to advertise through hoardings /bill board .Investing in abeacon that can send promotional content as push notification seems like an effective alternative .It is low cost($5) and has a battery life of 2-3 years .It could help maximize advertising /marketing spends.

3)How would the experience be considering data speeds?

  • The 2G mobile Internet usage in India grew by 41 per cent in 2014, as per Nokia Network’s MBit Index study.3G usage was also up by 114 per cent at end of 2014, compared to 2013,”An average 3G subscriber in India consumed three times more data than a 2G subscriber. This shows that with increase inspeed, usersbuoyed with the experience consumed more data. With 4G coming up and Reliance Jio in the offing, dataspeeds would increase exponentially. With increase in data speed, experience would be hassle free for the end user.

5)Have Beacons been installed in retaileralready? Are they seeing benefits?

Beacons have been implemented by a plethora of clients. Apple, Macy’s,P&G,Coca Cola .Kraft,Levi’s, House of Fraser are all clients wherein beacons have been successfully implemented and where retailers are reaping benefits. As per a study conducted by Swirl,73% of shoppers mentioned that beacon triggered messages would increase the likelihood of purchase 61% said the messages would prompt them to visit the store more often .According to a Business Insider Report, the total addressable sales using beacon triggered message is 6% in 2015.It is expected to rise to 20% in 2016.In store sales using beacon triggered messages is $4.1 billion in 2015.It is expected to rise to $44.4 by 2016.

Our Recommendation

Beacon Technology’s potential is untapped in India .Retailers should look at adopting this technology to get an early mover advantage and increase patronage before competition catches on. After all India is slated  to become the second largest smartphone market in the world by 2017.With 4G services being offered on rates in par with 3G  ,users are sure to lap  up data services in smartphones as well. This makes smartphones an “omnipotent” tool to communicate with customers.Our recommendation would be-do not lose out in this race! Start today!

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