Retailers Like Rite Aid Drive Sales Through Beacons

Create: 01/19/2016 - 12:00

With pharmacy chain Rite Aid's announcement earlier this week that it would implement beacons in all of its 4,500-plus outlets across the U.S., the wireless technology got a substantial boost. Where once retailers asked their solution providers, "what is the value in using beacons?" today many stores are wondering, "how do I use beacons to enhance my customers' experiences?"

Before this week's announcement, Macy’s had been the retailer with the largest number of beacons deployed. Rite Aid debuted proximity beacons in each of its stores in a partnership with inMarket. (inMarket uses existing retailer and brand apps to beam offers to customers. The company says it has more than 42 million monthly users actively participating in its beacon program.)

There is clearly an uptick. According to the 2015 Store Operations Survey by Retail Touchpoints, nearly 46% of retailers either now have or plan to use beacons in their stores. And by the end of 2016, Business Insider predicts beacon-driven in-store revenue is estimated to hit $4.1 billion for the top 100 retailers. Even among smaller stores, the technology will be a significant factor: Beacons will influence $44.1 billion in 2016 sales. That’s the equivalent of one percent of total U.S. store sales.

For now, most beacon implementations are being deployed in pilot programs on a small scale, as retailers try to understand how the technology can foster customer engagement. So far, analysts report that the biggest barrier to adoption is getting consumers to turn on the Bluetooth capability on their phones.

Most solution providers are familiar with beacons, the small, Bluetooth-enabled devices that are affixed to walls or countertops inside stores. They are proximity-based; a beacon sends Bluetooth signals to customers’ smartphones once they are within 50 to 100 feet of the device, automatically triggering personalized coupons, special offers and loyalty rewards. A general rule of thumb is that one beacon is required for every 5,000 square feet of store space.

The challenge for retailers is in determining how to get customers to engage with beacons. Shoppers need to be enticed to opt-in, and the benefits must be more than the offering of free Wi-fi. Retailers such as Macy’s offer promo codes, exclusive sales events and other perks that improve the shopping experience and strengthen the customer’s bond with the store.

While it’s easy to see how getting some push promotions from retailers might be considered intrusive or creepy, there are substantive ways the technology could make its mark in a positive manner:

  • By providing customers information about price, reviews, performance
  • By offering customers sales floor support that augments associates’ efforts
  • By measuring what types of products receive the most (or least) foot traffic.

Once the shopper is “recruited,” retailers can focus on making the shopping experience dynamic and personalized. For instance, a female shopper who just left the shoe department might receive a text message alerting her that UGGs boots would be 10 percent off for the next 30 minutes. Sending such selective incentives may provide the reluctant shopper just the motivation needed to close the sale. 

In addition, increasing numbers of shoppers want to use technology to “shop smarter.” A 2015 Mercator Advisory Whitepaper survey sponsored by Discover and reported by Payment Week found:

... of 1,000 credit cardholders who own smartphones, 53 percent reported that they would like to receive special offers and discounts at selected merchants when shopping in or near their stores. 

Beacons can offer in-store shoppers the efficiency of shopping online, but with what many might consider additional benefits. In-store shopping is more social, ideal for those who want to see products up close and personal — and who want to share their experience with others. Via beacons, shoppers can often combine online efficiency with the benefits of in-store shopping.  

Increased efficiency, personalization and customer insights — that’s the road trip beacons will embark on this year with retailers.

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Jennifer Bosavage

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