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[8 comments]

Beacon technology drives brand awareness and sales

July 25, 2014

A mobile test campaign by Hillshire Brands using beacon and geofencing technologies increased brand awareness and sales of its American Craft Link Sausages. The program ran from April-June across the top 10 markets in the U.S.

The campaign, which used beacon technology to deliver coupons to consumers on their Apple and Android phones as they entered stores, delivered a 20 percent increase in purchase intent for those who received the messages. That figure, according to the Hillshire, represents a 500 percent increase over the consumer packaged goods (CPG) industry average for mobile ads.

"The real, groundbreaking news here is that this is the first-ever data release from beacons in terms of their effectiveness in shopping and retail," Todd Dipaola, CEO of inMarket, a shopper marketing platform that worked with Hillshire on the test, told Adweek.

"Initial results have made this programming a very attractive marketing asset for us," David Ervin, director of integrated marketing for Hillshire Brands, told the Chicago Tribune. "We are excited with the results thus far and will certainly look to leverage it within future marketing activities when it makes sense."

Based on the success of the recent test, Hillshire plans to roll out a similar campaign for its Jimmy Dean sausage in the fall.

FINANCIALS:     [NYSE:HSH]

Discussion Questions:

Do you see beacon technology as an effective means to drive brand awareness and sales in retail stores? Are there any concerns that retailers should have about the technology's use in stores?

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 important will Beacon technology become to in-store marketing efforts in the next five years?

Comments:

Yes, this should work when only one or a few players are using it. NO, it will NOT work when it joins the insane cacophony of shouting at the shoppers, common to many stores. In other words, any thing that is "few, and well chosen," can be intelligent communication. In the hundreds, it's more noise.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

These are impressive results, but I do believe that there are at least two concerns with relying too heavily on beacon technology.

First, these offers must be well-targeted and used judiciously. If the shopper is bombarded with too many irrelevant offers, s/he will be turned off and will tune out. Also, the lifts seen by Hillshire will be diluted in the future when many more products are offered in this manner. The shopper will have a large number of enticing offers to choose from, which is a very different landscape than the one in which Hillshire ran its tests.

Secondly, we shouldn't lose sight of the value of offers that are delivered prior to a store visit. This is where the largest incremental sales opportunities are to be found. These drive store visits, and influence how the shopper puts together the weekly shopping list. Such offers, or offer programs, likely also influence long-term behavior more constructively than do the "impulse-buy" inducing effects of in-store offer delivery.

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Dr. Paul Helman, Chief Science Officer, KSS Retail

Increasing purchase intent 20-times is NOT the same thing as converting sales.

Just as omni-channel means many places to shop and gather information, it also means and requires many channels of marketing to reach today's consumers.

What is compelling about the Hillshire case study is the ability to generate specific product purchase intent by very targeted offers to mobile consumers in store. One very key question is: how compelling does the offer/discount have to be in order to generate purchase intent?

George Anderson mentions that "geofencing" was also employed. This technology is enables tracking of consumer traffic to very specific locations within the store. Did the phone beacon offer drive traffic to the Hillishire sausage display? How long did they dwell there?

Ultimately, the bottom line question is: what drives more purchases, beacon offers on phones or the sizzle of sausage samples cooking in the aisle? Now that would be an interesting experiment!

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Chris Petersen, PhD, President, Integrated Marketing Solutions

I agree with Dr. Sorensen here. If this technology is deployed to educate shoppers about something new or communicate a new benefit, it has the potential to be useful and therefore not annoying. But if used to blast out a coupon offer on just any product, it's noise, and annoying noise at that.

Marketers need to be judicious and really take the time to understand what key prospects may react to different kinds of uses of this technology. Test and learn.

Purchase intent is great, but conversion is better, especially when shoppers are grateful that they've been provided with value beyond price.

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Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

Beacons can be a very effective tool to improve the shopping experience, but I don't like this particular use case.

I call the practice of pushing an unsolicited coupon or marketing message to a user when they hit a geofence "geo-SPAM." If the message or offer isn't highly relevant and timely, shoppers are going to be turned off. Even if the offers are good, as more marketers use the tactic, the signal-to-noise ratio is just going to get worse. It will cause most users to opt-out of the tactic.

I get geo-spammed on my train ride to work everyday, and the train passes over a number of retail chains. It just made me uninstall those apps.

The other problem is reach. The only people that got messages in the test above are IOS users that have the ListEase app turned on on their phone, Bluetooth turned on, and location services enabled. It's just a guess, but I'll bet people that met that criteria already had a much higher purchase intent than the general population. The test didn't disclose how many people got the message, what percentage of total traffic that was or how many actual sales were influenced.

It's EXTREMELY hard to get good distribution for a retail app. Most users have only downloaded 25 apps and only use eight more than once (of the 1.25 million apps in the app store). So the subset of shoppers walking into a store with a retail app installed are already your most engaged, high purchase-intent user.

I'm a huge fan of using beacons to better understand the context the shopper is in and giving the shopper a more relevant experience; i.e., auto-checking in an Apple Store guest who has a Genius Bar appointment, or automatically going to the TV reviews when a user launches the Walmart app while they happen to be standing in the TV section of a Walmart store. I'm not a fan of geo-SPAM.

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Jason Goldberg, VP Commerce Strategy, Razorfish

No. This is a great example of Mark Twain's fears in action...Lies, damn lies and statistics...One brand being "beamed" to select locations doesn't ensure that the same level of success (or any level of success) will occur when this includes 100 brands to all locations, all of the time. Interpretation of monolithic data is usually distorted and often totally wrong until real-world inclusion and activity is part of the analysis and data. The path to success is littered with monolithic data interpretation failures. The Apple Lisa (and Newton), New Coke, Microsoft Zune, Ben Gay Aspirin, Sony Betamax, The Ford Edsel...the list is tremendous....

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Kai Clarke, CEO, American Retail Consultants

The temptation to "push" seems too compelling and too easy to pass up with so many ways to do it. A beacon alternative, in-store radio stream coding, is even easier to execute, requires no infrastructure and accomplishes the same end result—it's just an app away. Push is noise. There are more effective ways....

Frank Beurskens, CEO, ShoptoCook, Inc.

Beacon technology could definitely prove to be a useful asset for improving brand awareness in retail. However, less is more: shoppers are more likely to respond to coupons and discount offers when they receive them on occasion, not when they are bombarded by them every time they enter a vicinity. Furthermore, they are more likely to be valued by shoppers if they are personalized and relevant. Finally, let's bear in mind that the ultimate goal is converting shoppers, and delivering the right offer (right product, right price) continues to be the best way to convert interest into actual sales.

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Alexander Rink, CEO, 360pi

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