Technology | Media | Telecommunications

Thursday, December 10, 2015

More Retailers Deploy Proximity Marketing Technology

Savvy retailers will create a connected in-store shopping experience. They'll also extend their online engagement with consumers -- moving beyond creating awareness and facilitating payments, to a deeper integration of their customer loyalty programs.

The pursuit of this agenda has seen digital coupons evolve from merely being a means of driving consumers to storefronts, to becoming a core element of promoting and reinforcing retail brand loyalty.

According to the latest market study by Juniper Research, nearly 1.6 billion coupons will be delivered annually to shoppers via in-store beacon technology by 2020 -- that's up from just 11 million this year.

In 2016, more retailers will develop proximity marketing programs for deployment in and around their stores. The Juniper study found that several leading U.S. retailers have already deployed beacon networks, with Macy’s having installed more than 4,000 within its retail stores.

The research findings demonstrate that in-store beacons have consistently generated high redemption rates for targeted coupons. As an example, the Chinese jewellery chain 'Chow Tai Fook' created a campaign in early 2015 and saw redemption rates approaching 60 percent, resulting in a sales uplift of ~$16 million.

Meanwhile, there's an opportunity to locate beacons outside storefronts. Proxama deploying a network of beacons in locations such as buses, taxis, shopping malls and airports in the UK.

The research also pointed out that the growth in contactless infrastructure and greater consumer awareness around near field communications (NFC) would lead to significant opportunities for proximity marketing in the medium term.

"The launch of Apple Pay dramatically increased public and retailer awareness of NFC. As contactless usage accelerates at point of sale, retailers will then move to incorporate NFC at all stages of the customer lifecycle, including loyalty and engagement," said, Dr Windsor Holden, head of consultancy and forecasting at Juniper Research.

However, according to the Juniper assessment, the use of beacon technology is still in the early-adopter phase of market development, with many retailers concerned that excessive, indiscriminate messages pushed by the beacon could be perceived as intrusive.

With that in mind, they have suggested that retailers should consider following  the lead of Target, the U.S. big-box retailer, which says it will limit the number of push notifications -- including coupons and special offers -- to 2 per in-store shopping visit.