[Image of: RetailWire Logo and Tagline (for print)]

BUSINESS TIPS

ChannelAdvisor:
Online Selling Strategies
RR Donnelley:
In-Store Marketing
LoyaltyOne:
Enriching Customer Relationships
 
[25 comments]

Is the Future of In-Store Marketing Inside Giant Eagle?

January 8, 2014

Apple's iBeacon technology has made its way to the grocery store, and one company, inMarket, claims the technology will vastly improve the shopping experience for shoppers in Cleveland (Giant Eagle), San Francisco and Seattle (Safeway) where it is initially being launched.

"We are thrilled to be making history by writing the first chapter of micro-location iBeacons helping shoppers' everyday lives. Besides Apple themselves, we are the first to take this groundbreaking technology out of beta tests and into consumers' lives throughout the heartland of the U.S.," said Todd Dipaola, CEO and co-founder of inMarket, in a statement.

In a nutshell, proponents say consumers will benefit from the technology that makes use of low-energy Bluetooth signals to provide shoppers with product information, digital coupons and other incentives based on their precise location. The iBeacon technology is said to be superior to other alternatives when its comes to location accuracy.

The beacons are small round devices said to be slightly larger than a quarter. Signals from the beacons communicate with compatible Apple and Android devices resulting in a wide range of advertising and educational messages being directed to participating shoppers.

"The more data you have about the customer, the more you can upsell them," Hari Gottipati, an independent tech consultant in Phoenix, told Bloomberg Businessweek.

FINANCIALS:     [NYSE:SWY] [ NASDAQ:AAPL] [ ]

Discussion Questions:

Does iBeacon technology offer the means to significantly improve the shopping experience for consumers in grocery stores? What do you see as the biggest benefits to marketers and category managers?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How receptive or reluctant do you expect consumers to be when it comes to receiving location-based messages on their smartphones via iBeacon technology?

Comments:

Of course there will be those who question "invasion of privacy," but I see benefit in the ability to make shopper-specific product recommendations in the aisle. It brings a capability to brick-and-mortar that heretofore has largely been restricted to online shopping.

[Image of: View Braintrust Panelist button]
Dave Wendland, Vice President, Hamacher Resource Group

With the iBeacon in place, there is tremendous opportunity for retailers and customers to benefit - retailers with access to rich customer data and shopping behavior, and customers with a unique in-store experience and targeted, personalized offers.

With all things that can be viewed as intrusive such as this, however, it is crucial that the customer opts into the system and feels that the tradeoff is worth any privacy concerns. It must be a true agreement between the retailer and the customer for it to truly work.

If executed well, the possibilities and benefits are limitless.

[Image of: View Braintrust Panelist button]
Jesse Karp, Omnichannel Consulting Manager & Loyalty Practice Lead, Cognizant Business Consulting

The key to success for technology like the iBeacon has to be measured in its value to the consumer. The value is not what the company or the retailer thinks, it is but the value that the consumer sees in it that matters. Value to the consumer today is saving money, not just getting information. So if and when communicating with shoppers as they shop in the store saves them money, it will succeed. Just getting information will not cut it!

[Image of: View Braintrust Panelist button]
Frank Riso, Principal, Frank Riso Associates, LLC

iBeacon's Bluetooth technology is yet another marketing "speed bump" that brands can pay for to throw in front of shopper's journeys. The potential for being annoying and unwelcome for the shopper is high. The purveyors of these technologies always couch this potentially obtrusive technology as existing to "improve the shopping experience." However, the truth in most cases suggests that it is meant to improve the marketing potential for advertisers. This seems like yet another example of a wonderful tactical implementation in desperate search of a meaningful strategy. What shopper problem does it solve?

Solving for why should be the first question - not the last.

[Image of: View Braintrust Panelist button]
Adrian Weidmann, Principal, StoreStream Metrics, LLC

Giant Eagle is certainly not the first retailer to deploy "geo-fencing" and in-store analytics to track and understand consumer behavior. Nike Stores, Macy's and Best Buy are just three examples of well-known specialty retailers that have already deployed in store technology for consumer tracking and analytics.

And, iBeacon is certainly the newest or most robust technology to track consumers in store. It was developed by Apple for tracking and promotional check in offers in their own Apple stores.

By my last count there are least 9 different companies offering in store tracking technology. The best in store analytics come from a combination of Bluetooth and GPS technology to track consumer smartphones.

Companies such as iInside now have the sophisticated technology to "geo fence" and track consumers down to a three foot zone (end cap), as well as consumer movement between areas in the store.

Deploying in store tracking and analytics will no longer be a novelty ... it will be a requirement for the store of the future.

Online retailers track every consumer click and movement around their virtual stores. Bricks and mortar retailers must quickly develop real time insights into consumer behavior in their stores in order to optimize their experience and sales.

As consumers, we are leaving "electronic breadcrumbs" everywhere online and in store without realizing it. A real question will be what will consumers tolerate before they are "creeped out"?

Passive and anonymous data collection and composite analytics are becoming common place and accepted. Most consumers become alarmed when retailers start tracking them as individuals and messages popup on their phones!

[Image of: View Braintrust Panelist button]
Chris Petersen, PhD, President, Integrated Marketing Solutions

The ability to recommend items to shoppers certainly will have some appeal to retailers. The question is, how many shoppers will want to get text messages as they walk through the store? It's one thing to be reminded about things on your shopping list, but it's another to have that be transitioned into "people who bought that also looked at or purchased this" texts.

[Image of: View Braintrust Panelist button]
Steve Montgomery, President, b2b Solutions, LLC

The ability to deliver a targeted message at the point and time of sale is a breakthrough. My question is, will consumers pay attention to the messages or dismiss them as annoying spam? Manufacturers and retailers need to make sure that consumers don't suffer message fatigue.

[Image of: View Braintrust Panelist button]
Max Goldberg, President, Max Goldberg & Associates

The technology is well in advance of common sense marketing. It's amazing how many erstwhile marketers have no sense of the difference between assisting customers, and SPAM. A few expert personal salesmen, of the Zig Ziglar ilk, would probably be drowned by all the techies that couldn't sell bottled water to a dying man crawling across the desert in search of an oasis.

[Image of: View Braintrust Panelist button]
Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

I would rephrase this to say Bluetooth Low Energy (BLE), which is the core technology behind the iBeacon offers the means to improve the in store shopping experience for consumers. This is the first step of an in store location revolution that retailers must adopt to level the playing field against their eCommerce competitors.

From a category managers and marketer's standpoint, knowing where a consumer is in-store and being able to deliver relevant messaging to them via their mobile device, with their permission of course, to help influence their buying decision will be critical. eCommerce is able to do this today which gives it a significant advantage as a sales channel so if traditional retailers want to protect their brick & mortar assets, in store location via BLE and other technologies (e.g. Wi-Fi, GPS, cell signals, RFID/NFC, etc.) will become necessary.

[Image of: View Braintrust Panelist button]
Bill Davis, Director, MB&G Consulting

I think the biggest benefit to marketers is that consumers opt in. Therefore users are in fact using the technology to assist their shopping. If shoppers find it helpful they will undoubtedly tell their friends. These people are the early adopters in the social media world.

Here's the TechCrunch description: The user has to have an app installed and be in the presence of an iBeacon. "You're not tracking or annoying customers who have not at least obliquely opted in with a supported app."

[Image of: View Braintrust Panelist button]
Joan Treistman, President, The Treistman Group LLC

Clearly this topic has struck a nerve with many passionate responses in reply to the story. My take on it is that there has to be value to the shopper, otherwise it will serve the retailer, the manufacturer, but not drive business at all (no shopper, no business).

I tend to disagree with those that are saying that "value" is the equivalent to price. I think the store has potential to be more than just a series of shelves and aisles of products. In the self-serve environment of traditional F/D/M stores, there is an opportunity to aid the shopper make progress in her/his life through the use of the store's offerings. However, it requires a deeper understanding of the shopper's jobs and how progress is defined (and it is not provincially defined as "stocking up" or "doing the weekly grocery shopping," etc.).

Innovation has a place in category management, in-store activities, shopper marketing, etc. - but texting coupons, or "others bought this" is not sufficient (may be necessary in some instances, but is not THE solution by itself).

[Image of: View Braintrust Panelist button]
David Zahn, Owner, ZAHN Consulting, LLC

Where does the research say that when I research an item at retail, I want to see a commercial on anything but what I am researching? Consumers accepted advertisement on television when it was over the airwaves, because the programs were free. Consumers are not accepting advertisement over cable, and are recording the programs and fast forwarding through the commercials.

Today the internet is getting cluttered with all the advertisement. E-mail spam now represents the majority of e-mails users receive.

Then there is the real problem with smartphones having a small screen. Unless the consumer asks, they will only be upset with non-related messages.

Unless some common sense is applied, I foresee a consumer backlash.

[Image of: View Braintrust Panelist button]
W. Frank Dell II, CMC, President, Dellmart & Company

iBeacon technology, while promising, isn't as straightforward as many may think, as several layers of permissions are required. For it to work, shoppers have to turn on Bluetooth, accept location services on an app and then opt in in order to receive notifications. Clearing these hurdles will require retailers to offer amazing incentives.

Given these realities, Macy's approach makes more sense. Thanks to its partnership with Shopkick, Macy's iBeacon foray will at least be underpinned with purchase intent (items that shoppers pre-flag on Shopkick) and, as ShopBeacon rolls out to multiple retailers including Best Buy, American Eagle, J.C. Penney, Target and Sports Authority, this year, widespread adoption and usage will become more likely. This is a natural for apparel, home goods and the like. For grocery? Not so much.

[Image of: View Braintrust Panelist button]
Carol Spieckerman, President, newmarketbuilders

Right now, the only apps that work with inMarket's in-store iBeacons are inMarket's own - one that allows you to create shopping lists (and now can "remind" you that you made a shopping list when you enter the store), one that allows you to pre-clip retailer coupons (and reminds you that you have a coupon to use when you enter the store) and a scan-barcodes-for-points game similar to Shopkick (which reminds you there are points to earn inside when you enter the store.)

In theory, there's a lot more potential for personalized offers, in-aisle coupons, etc., but the practical uses right now are pretty slim - which is about what you could say for virtually every similar type of technology that's come out so far with grand promises to "revolutionize" grocery shopping.

Show me relevant, money-saving offers, and I'll start listening. Until then, I don't care to opt in to something just so stores can track me in exchange for an app that will "remind" me not to forget the shopping list I made yesterday.

Bill Clarke, Publisher, CouponsInTheNews.com

This is a variation on a theme that has been in progress since at least the introduction of in-store digital signage and probably since the launch of the Instant Coupon Machine around 1993.

Screens that "watch you back" and shelf-edge sensors that detect passing shopping carts with precision are but two variations that have been field tested in recent years.

There is also merit to the notion that an offer presented right at the point of decision may be most persuasive. Again, not a new idea by any means, unless you are a freshly-minted MBA.

The tiny iBeacon transponders seem to meet several standards that I believe are critical - they are technologically light, easy to move about, and presumably cheap to make and install.

That leaves the most critical consideration - how will this affect the shopping experience? I would assume the usual spectrum of annoyance to delight, varying by individual and occasion. It must be intrusive to work, yet magically helpful without being creepy in execution.

Let's make one more thing perfectly clear: Shoppers just do not need yet another discount delivery mechanism, however more precise or elegant it may seem. They have too many apps already. What they might like is a tool to help ease pantry management and simplify keeping track of deals from many sources.

[Image of: View Braintrust Panelist button]
James Tenser, Principal, VSN Strategies

50,000 SKUs, all screaming "Buy me! Buy me!" on my phone as I walk down the aisle? Push solutions representing only the seller's interest is legacy thinking. Shelf tags already do that today. The buyer is in control of the device, and the content viewed. What is in it for the shopper?

Frank Beurskens, CEO, ShoptoCook, Inc.

I agree with Adrian Weidmann that the "WHY" is missing. This benefits marketers, not shoppers. To say this will improve the shopping experience is not true.

Mobile apps distract shoppers in-store. Marketers and retailers should want shoppers focused on products on the shelves as they walk down the store aisle, not on their phones.

The retail store aisle is the last opportunity marketers have to really engage shoppers with their brand and products. Why distract them? This will simply create a new electronic clutter. Basically, pop-up ads in the "meat space."

Martin Amadio, President, Inity InStore

What's exciting: talking with shoppers in a personally relevant way, at the point of sale.

What's not so exciting: apps limited to inMarket's platform.

I agree with those remarks around geo-fencing in general; compelling time and place communication is increasingly critical for effective marketing.

[Image of: View Braintrust Panelist button]
Liz Crawford, VP, Strategy & Insights, Match Drive

There may well be something to the use of iBeacons, but I am not sure I see it yet. It looks like people are thinking of sending coupons to consumers who have downloaded an app and are already in the store. I have a word for consumers who have not just opted-in, but actually taken the proactive step of downloading an app - deal-seekers. And offering deals to deal-seekers who are already inside your store isn't typically the recipe for generating incremental profit.

Hopefully, this is a path to more creative options that actually help the consumer in ways that are different from discounting items they may well already be buying.

[Image of: View Braintrust Panelist button]
Jonathan Marek, Senior Vice President, Applied Predictive Technologies

We have heard a lot of interest from retailers in the iBeacon technology recently. Instead of sending coupons to shoppers these retailers, many of which are in the fashion, gifts or luxury goods categories, are interested to alert store associates (on their tablets) to the shoppers walking into their stores. Is a VIP shopper entering? What are the personal preferences of this person so the associate can make better recommendations and be overall more relevant and helpful? It is bringing back to store owners and shoppers alike the personal connection that corner butchers had with each of their customers.

Of course, having just iBeacon technology alone is not enough for this application. You will have to pair it with a solid 360 customer profile and preferably some predictive analytics (recommendations, lifetime value) in the back end.

Dominique Levin, CMO, AgilOne

We've all see studies that reportedly have a growing number of supermarket shoppers engaging with their smartphones in the aisles for mobile coupons, product information, nutritional values, and so on. I question these findings.

I make this claim based on personal experience. I am in supermarkets all the time in my home town and in various cities around the country. I have never, ever, seen even one shopper engaging with a smartphone in the aisle for anything other than a telephone call. And I look for them. I even ask my friends and associates about it. They call such engagement on the phone while grocery shopping "annoying."

Having said that, I think the inMarket technology is interesting and I wish them well. As it happens, I live in Cleveland and shop frequently in Giant Eagle.
Once the technology is in place there, I will look for shoppers engaging with their smartphones. I hope I won't be the only one.

[Image of: View Braintrust Panelist button]
John Karolefski, Editor in Chief, CPGmatters.com

Apple provides end-user product and support only. They do not have the ability to interface and support Very Large Scale Integrated (VLSI) enterprise information systems. This means any and all security must be provided by the company/retailer. Information Technology executives will be slow to sign on for the expenses for this to happen. Company executives should get a good handle on the windfall budget needs for this party before signing on.

'gjarnoldjr'

The customer benefits are impressive. But once again there are privacy concerns - how much info does the customer need to give up? I am also troubled by the potential disruptive intrusions to the shopping trip.

[Image of: View Braintrust Panelist button]
Jerry Gelsomino, Principal, FutureBest

The tipping point has been reached in terms of consumer acceptance and utilization of location-based technologies. The key now is for marketers to listen to the customer and not try to force messages they want onto the customers' phones, lest they immediately opt-out.
The messaging will also vary by type of retail environment. The grocery store will largely be price driven, but in some, like Whole Foods, I imagine many customers might enjoy wine pairing advice, menu ideas, etc., as well as savings. I can see luxury retailers using this for product and designer information, exclusive offerings, etc.

Regardless, customers will opt in, and stay in, based on their definition of value.

[Image of: View Braintrust Panelist button]
Mike Osorio, Senior VP Organizational Change Management, DFS Group

Can we be honest and say iBeacon is a dud?

Do we really want distracted shoppers using mobile phones while pushing a cart? Do shoppers really want information pushed to their mobile phone when they are in vicinity of a "beacon"?

Seems like there is a overreach to manufacture a solution for iBeacon.

Ed Dunn, Founder, (Stealth Operation)

Search RetailWire
Follow Us...
[Image of:  Twitter Icon] [Image of:  Facebook Icon] [Image of:  LinkedIn Icon] [Image of:  RSS Icon]

RetailWire's
Getting Started video!

View this quick tutorial and learn all the essentials...

RetailWire Newsletters