SXSW: How can we reboot the beacon to serve, not assault?

Mar 18, 2015

SXSW kicked off last Friday with a bevy of retail experts sharing their points of view on retail’s current and present future. MediaPost hosted a notable "OMMA @ SXSW" event in which the topic "Beacons, M-Pay and The Great Shopper Reboot" was covered. I served as moderator/contributor with panelists Daniel Gutwein, director of retail analytics, Intel; Sean Bartlett, director of digital experience, product, & omni-channel integration, Lowe’s; and Ryan Bonifacino, SVP, digital, Alex and Ani.

A key theme to the panel was how technologies such as beacons have extraordinarily powerful potential for morphing the retail experience, but that the industry should not consider beacons as tools to "take back control" of the shopper experience. Rather, we should be thinking about how to make their experience better with them.

Lowe’s talked about how they use real-time inventory tracking and have developed an app so their staff can capture live conversations with consumers about projects, build a shopping list of what the consumer needs, and then track their purchase behavior. They are also hyper focused on "not making a customer start over" via technology.

Intel added on with the video of an iKeg that they helped create, which monitors tap and keg "velocity" and provides a wealth of real time data about what beer is being drunk, at what time, in what bar, at what speed, etc. This prevents out of stocks while ensuring a fresh draught, and provides a sneak peek into how IoT (Internet of Things) could better support retail.

Alex and Ani went on to share how they put a "P&L to digital" and how beacons are used to bridge retail and digital. A customer can see a product "in the wild" (i.e., in-store) and then view it with deeper product information on their device. The data behind the scenes is registered to the personal information and the loop is closed for the shopper to purchase now or at their leisure on their device.

But the dark side of beacons is the other range of applications, whereby people walking by stores or spots in the store are hit up with selling messages or shopper data is streamed without public notification or buy-in. Plenty of conversation centered around tracking elements of people’s bodies, not their personal ID, then creating value exchange for the shopper to opt in for more. An example would be linking SKUs to video content in-store so that someone could wave their phone over a beacon to see an instant feed of how that product is worn/accessorized or view shopper reviews on their phone.

In what ways can retailers use beacons to serve shoppers rather than seize control of the experience? What other examples are out there of retailers doing this effectively, getting buy-in and, thus, great shopper data?

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20 Comments on "SXSW: How can we reboot the beacon to serve, not assault?"

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Mohamed Amer
Beacons extend the brick-and-mortar retailer’s reach beyond the four walls in a sophisticated 21st century approach reminiscent of walking down a street bazaar in Asia or the Middle East and receiving the store keeper’s sales pitch on why you should check out the merchandise. However, the privacy issues with today’s technologies are very different even if the merchant’s intent is the same. Retailers today need to have a very clear strategy on why they exist (beyond making a profit), the values they represent and how consumers fit in that strategy tableau. That will offer the parameters of what is acceptable to do and what is off limits for marketers and others in the retail organization. Consumers are interested in simplifying their lives and anytime a retailer can offer to do that with demonstrable benefits to the consumer, both parties will win. The notion of controlling and owning a customer is dangerously dated and will not be acceptable to the majority of consumers. More and more we will see retailers and consumers engaged in co-creating a common future, and while surely this involves trial and error, it must be based on mutual respect. So rather than citing specific use cases (there… Read more »
Camille P. Schuster, PhD.

I don’t know of any examples of retailers using beacons effectively. Most examples of in-store messages I have seen or read about involve providing more product information, ads or a coupon. If I need more information beacons could be helpful, but if that is all that is available when using this technology it is not helpful. Many people are in a hurry when shopping. If their trip is going to be interrupted, the intrusion has to helpful. Another sales message is not necessarily helpful.

Adrian Weidmann
The challenge of these technologies is finding a balance. The fundamental objective for retailers is to sell stuff. That will simply never change. Finding balance between that reality and meeting the digitally empowered shopper’s ever increasing emotional and experiential expectations is the challenge. It is difficult to get a brand to fund an initiative that can be readily used to move a customer to a competitive product. This is where the retailer needs to step in and create those applications on their dime (which by the way has been graciously contributed by their brand vendors). Retailers want sales lift on the entire category and high-margin items. Brands want sales lift on their specific SKUs. Therein lies the ongoing tug-of-war. Wireless technologies can be useful for shoppers, retailers and brands alike if retailers and brands can come to terms with the fact that neither own the customer. The shopper is in control and retailers and brands alike should be grateful that shoppers walk into their stores and purchase products. The objective of these technologies is to make it easier and more enjoyable for the shopper. The former visual merchandising executive emeritus at Target, Judy Bell, stated a known fact over 10… Read more »
Ryan Mathews

My fear is that retailers and manufacturers (who will no doubt be asked to pay for the technology) will gravitate to the “dark side” of beaconing and begin bombarding customers with unwarranted interruptions and distractions.

While there are examples of the technology we could talk about, I’m not sure anyone has given sufficient thought to creating a totally new shopping context/experience for the shopper.

Mark Heckman
Technology without shopper intelligence has a tendency to be more annoying than helpful. There are plenty of examples today of geo-fencing and iBeacon technology being more of a bother than a help to shoppers, typically because the messages that are prompted by the shopper’s presence are not practically actionable or relevant to the shopper’s immediate needs. Case in point, I really don’t need a message directing me to go to my app or a website to check out hundreds of deals while I drive past a retailer on a busy highway. I really need to focus on driving. However, if a quick text reminder comes up while driving by a drug store telling me that my prescription is ready, that’s valuable. Many of mistakes being made by those that program targeted, locational-based messages defy common sense. Others are the result of the desire to push forward with the technology before sufficient shopper data is acquired that is needed to communicate in a relevant and beneficial manner to the customer. There is a very fine line between “beneficial” and “annoying”. Before launching a locational-based communication strategy, to the extent possible, connect with an existing shopper database before communicating to the shopper.… Read more »
Kai Clarke

Beacons can serve both shoppers and retailers, but this requires managing data in light of real-time experience (and adding another layer of “noise”) to the shopping communication overload already screaming for attention. This invariably is an assault on effective data, and even getting buy-in, prior to the collection and management of this information.

Ed King
Ed King
2 years 7 months ago

It’s a simple matter of value exchange. Only by retailers first giving the shopper value (not necessarily just offers or coupons) in exchange for their opting into being communicated with in-store, will the shopper be open to it. Even then, the interaction should be relevant, personal and unobtrusive.

gordon arnold
Professionals that study people and their behavioral aspects often speak of “tells.” These idiosyncrasies can be detected and reconfirmed visually, phonetically and as a matter of non-routine responses with a highly predictable behavior. In short, people will always tell us what they are thinking and wanting in many ways. If these mannerisms can be reliably detected or offered and recorded for later observation response then a program or application in use with something like beacon technology can be of service to consumers by predicting the best solution for their needs as well as a list of probable accompaniments. These software beacons can be made electable by the consumer simply by offering the electronic experience as a time saver and/or a means to see alternative solutions with support data. This technology will be designed as an electronic associate for customer service and should be engaged by the brick-and-mortar portion of retail as a means to merge omni-channel design as one business. Concerns about security and misuse are often overstated and an obstacle to the changes we need to keep pace with the market(s) and the consumers. Remember that change is good and that we should devote our efforts to protect the… Read more »
Ralph Jacobson

A mobile commerce vendor, Beam Wallet, is implementing Bluetooth Low Energy (BLE) Beacon technology that allows shoppers to get offers, redeem rewards and pay for merchandise without cash or cards. This technology, from a variety of vendors, is now ready for deployment in retail outlet settings and CPG can get into the fray with collaborative offers with retail merchants. Shoppers in the U.S. and around the world are more than ready to use this technology, so I see a rapid adoption process in the next 12 – 18 months across mature global markets.

James Tenser

Beacons and other in-store sensing systems have failed to reach their potential thus far because their users and proponents lack imagination. As with many innovations, the developers have started with the technology then tried to create applications for the retail environment. Inevitably, they fall back on a formula they think they can sell—track shoppers and deliver offers.

Some sensing vendors might advocate the “take back control” theme that Laura cites because they can’t devise a better justification for their solutions. Red flag! Any rationale that promises to engineer shopper behavior is fundamentally unrealistic.

In-store sensing does best when it delivers shopper insights and enhances shopper experience. This may seem like a tough sell until we compare those benefits against the ways the best online retailers monitor shopper behaviors and deliver tailored experiences.

Let’s face facts: Beacon and many other in-store sensing and media vendors dream of tapping into the rich mother-lode of manufacturer promotion funds because they can’t conceive of a better way to persuade retailers to buy on their own.

An attractive, semi-personalized offer may certainly be part of the equation, but beacons and their kin will only break through when positioned and implemented as tools to enhance the total shopping experience.

Lee Kent

Today’s consumer is very marketing averse. Retailers who only look at these technologies as marketing opportunities are missing the boat!

That is why I am personally not a fan of retail’s adoption of CMOs. Perhaps the issue is not so much what the job does, but what the title sounds like. Folks, this is NOT your grandaddy’s marketing. In my book, it is not even marketing! (definition: The act of buying or selling in the market.)

Okay, that’s just my pet peeve. I just think we need another name for what this position is.

It’s all about giving the consumer what they want to make their own decision including a great experience. So retail, let’s use this technology to make the shopping journey better. To answer your customers’ questions. To find a product. To compare a product. You get the picture.

Smart retailers are already moving in that direction.

And that’s my 2 cents.

Martin Mehalchin

One recent fun example of a creative use of Beacon technology was a partnership between Starbucks and the Seattle Seahawks.

More broadly, retailers should use Beacons as a way to give their consumer more control over their own shopping experience. Encourage shopping in a “logged-in state” and then use the combination of an app on your customer’s phone and a Beacon-enabled store to solve pain points and bottlenecks in your current shopping experience. Potential applications include greater precision in wayfinding and in-store mapping in big box and department stores, giving consumers as well as associates visibility to in-store inventory and letting consumers choose between self-serve shopping or a high-touch, assisted interaction.

Martin Amadio
Martin Amadio
2 years 7 months ago

It is interesting to watch retailers pay lip service to the concept of shopper control while they continue to place their objectives ahead of the consumers’. Mobile apps, (which power beacon technology) are overwhelmingly retailer centric in spite of all evidence that the shopper is firmly in control. The proliferation of retailer apps has become the electronic equivalent of loyalty cards on people’s key chains.

Obviously, as Adrian points out, “retail is about selling stuff” but is anyone asking shoppers what they want? Maybe we should give shoppers more control, instead of trying to devise methods to govern their control.

Tom Redd
Beacons, “sheme-cons,” i-cons, whatever—right now this IoT and beacons is moving too fast. Let the tech crazy people go nutty in all the industries they want. But in retail, this technology is just another “spin” to sell retailers a shortcut to the basics. The basics? Have the right stuff at the right place, etc., and provide great customer service. I just spent a large sum of $$$ on a new bed (after 18 years on the same mattress, it was time to go new). I bought the mattress online and had great help from the company’s chat box customer service rep. He helped me make the right decision and kept the product in my “hands.” People, beacon and do whatever—but if the service online and in the store is not there, then “supposedly” new tech like beacons cannot help. The foundation comes FIRST, then add the perks. This whole pile of tech noise reminds me of when Randy Mott and the gang at Walmart bought a huge number of Telxon hand-held scanners and RFID gear. It was the start of the scanner craze. Patterns repeat in retail—this is another such pattern. A repeat, but not critical to solid, foundation-focused retailers.… Read more »
Herb Sorensen

We have been using Bluetooth beacons to “listen” to shopper MAC identity and location since 2010, and have integrated what we have “heard” into important understanding of the shopper crowd—not individuals. The point here is to NOT join the cacophony of SHOUTING being done by stores, by hordes of aspiring communicators with them.

The imagination that what is needed is more communication TO the shopper is part and parcel of what is wrong with retailing today. And seeing technology as “assisting” with this (and marketers agreeing with it,) is the PROBLEM, not the solution.

No where is the brilliance of Neale Martin’s book, “Habit: The 95% of Behavior Marketers Ignore,” better seen. I could probably express this more strongly, but then I might be shouting. 😉

Sid Raisch
Sid Raisch
2 years 7 months ago

I smell QR codes. Give me the “off” switch and I’m using it. The misuse and abuse of beacons will turn consumers off before they get going. On the other hand, I just may turn it on for specific purposes, such as while at a sporting event. But I’m unlikely to do so when I know the primary purpose will be to sell me something.

Joel Rubinson

I thought this was an amazing panel discussion (watched the whole stream). I loved the Lowe’s comment about “not making the shopper start over.” There is also a lot here about the emotional swings while shopping and how to improve the shopper experience at that level and leverage a change in emotions that indicates a readiness to transact.

As far as beacons go, I think the simple way of getting response is to do while shopping what Catalina does at checkout. Use frequent shopper histories to anticipate upcoming purchase needs and serve offers.

Ed Dunn
2 years 7 months ago

I do not know any. Beacons are difficult to create and support on Android and proprietary on iOS and non-existent on Windows. I’m curious at all the hype, but no one seems to state the obvious fragmentation factor of the technology. In addition, one case study expressed frustration at not knowing if battery-powered beacons are actually working or know when the battery will run out and then having to walk around and test them out manually.

I would stay in a holding pattern until beacon technology matures.

Vahe Katros
Push vs. Pull In the push model, the shopper is walking down the aisle and the retail application does the following: Here comes someone, get their MAC address, figure out something about them, message them to stimulate demand. Pull model, the shopper is walking down the aisle, they are using the retailer’s shopper-centric application, the application was designed to add value based on common use cases, let’s say in the case of Lowe’s that the shopper, coming in on the weekend, volunteered that the reason they are here is to get things for their outdoor weekend project, the shopper volunteered that information because it was easy and because Lowe’s doesn’t abuse them, and outdoor projects are a very common use case/source of profits that they want to support in a big way. Let’s say the weekend happens to be during a time when a particular form of outdoor fly is in force (it could be some other outside annoyance but let’s do bugs). Imagine the scenario where the shopper passes a shelf and they are messaged: Hey Vahe, based on where you live, the time of year, and reports by our other customers, you live in a place where you’ll… Read more »
Tim Charles
2 years 7 months ago

Sometimes we get caught up in big exciting developments because they’re covered repeatedly at shows and in the trade mags. Everybody spends so much time trying to figure out how to monetize the exciting developments, but nobody ever bothers to stop and ask whether the development is valuable or useful in the first place.

@Sid Raisch: QR codes are an excellent comparison.


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