Source: InMarket video
Will beacons in every store work for Rite Aid?
Rite Aid plans to deploy beacons in its more than 4,500 stores across the U.S. The beacons, which are compatible with both Android and iOS devices, will work with Rite Aid’s mobile app along with others from manufacturers and publishers to beam offers to customers inside the chain’s stores.
With 4,500 beacons, the drugstore chain will move past Macy’s (4,000 beacons) for the largest deployment of the technology at retail. Rite Aid joins a list of retailers that are currently piloting tests or deploying the technology. Last August, Target announced it was testing beacons in 50 locations with an eye to rolling out the technology chain-wide.
Rite Aid is working with inMarket on its beacon deployment. The company uses existing retailer and brand apps to beam offers to customers.
“Beacons on their own require apps to listen for them — otherwise they don’t do anything,” Dave Heinzinger, communications director for inMarket, told ZDNet. “Our strategy has been to build out relationships with apps that people already use, rather than try to reinvent the wheel and get people to download something new.”
Beacons were a popular topic at the National Retailer Federation’s Big Show this week in New York with opinions sharply divided over their value. In short, those who question beacons think that the push messaging to consumers’ smartphones may become onerous for shoppers as they are pinged with a string of offers while in stores. Supporters talk about the ability to deliver targeted offers based on loyalty data.
- Rite Aid deploys proximity beacons in more than 4,500 US stores – ZDNet
- Rite Aid Corporation (NYSE:RAD) Deploy More Than 4,500 Proximity Beacons, The Largest In US Retail Industry – WallStreet.org
- Why beacons’ bright light dimmed in 2015 and what’s next – RetailWire
- Target tests beacons, plans nationwide rollout – RetailWire
- What’s the real deal with beacons? – RetailWire
Discussion Questions
Will beacons help Rite Aid achieve incremental revenue growth? What do you see as the do’s and don’ts for Rite Aid’s successful deployment of the beacons?
Poll
BrainTrust
Chris Petersen, PhD.
President, Integrated Marketing Solutions
Adrian Weidmann
Managing Director, StoreStream Metrics, LLC
How long will consumers tolerate push notices popping up on their mobile devices as they walk through stores? Unless those notices are effectively targeted and offer significant value, not long. I don’t see beacons achieving revenue growth for Rite Aid.
Beauty lies in the eyes of the beholder … and the only eyes that count are those of consumers.
Beacons will only help Rite Aid with incremental growth IF the consumers see benefits and value. Consumers soon tire of beacon technology that blasts more ads to their phones.
A key to success will be in the “apps” that enable consumers to personalize and manage their experience and how they use the beacons.
One or two notices that have value are likely to be welcomed. When the number of pushes gets to five or six, even if they have some value, they are likely to be seen as a nuisance. The push back might not only be on Rite Aid but the brand and their apps that are receiving the pushes.
I believe proximity marketing and merchandising holds tremendous potential for brands and retailers alike. However, if this technology and its use by the shopper is solely linked to an app it will most likely fail. In-store shopping apps simply have failed to resonate with shoppers on any sustainable basis. There are notable exceptions: Starbucks being one, but for the most part digitally-empowered shoppers use but a handful of mobile apps on a regular basis. Google (search, maps, etc.) Facebook, Pinterest, Instagram and maybe Pandora. Everything else is fleeting and inconsistent.
Don’t tie the proximity technology to an app. It will severely limit its acceptance by shoppers and will never meet your incremental revenue growth objectives. There are other far more practical methods to leverage this technology to help the shopper before during and after their store visit and purchase.
Will the beacons send valuable information to consumers in a timely manner without annoying them? If so, then they will be successful. Of course discount offers will be welcome but how many offers do consumers want to receive as they walk through the store or if they receive them all at the beginning of their trip how many will they remember? Will consumers want product information? What other information will consumers find valuable?
Beacons, when used correctly, should help. Correctly means the right promotions at the right time to the individual. Yet the key is to get people to sign up for the app and use it. Teach the customer the value. Give them incentive to try it. Prove to them it’s worth it. Then watch the adoption of the technology move to a tipping point where it becomes mainstream. It will take time, so patience will be important.
The right answer is, “We’ll see.” A lot depends of the customers after all. If I had to commit I guess I’d say it all depends on what you mean by “incremental.” Clearly the beacons will generate some sales, but the question is how many is enough to justify the cost of the program, app development, advertising, marketing and maintenance.
On the “don’t” side there is the issue of false starts or losing interest if the program doesn’t immediately generate the desired results. On the “do” side are education, communication, outreach, use of social networks and media, etc.
It will be an interesting experiment to watch. Presumably they launched a beta and presumably it did well enough to encourage broader investment.
Sending special offers to someone who has downloaded your app without customer knowledge is more likely to upset the customer than have them buy more. Male-oriented products may not be well received by a female and the reverse is also true. I think the better approach is to introduce new products based on minimal customer knowledge.
The largest assembly of consumers in a pharmacy during daylight store hours is at the drug store waiting area usually way in the back. Most of these potential “all store” patrons are entertaining themselves with games or social media apps on their smartphones. Allowing them the opportunity to see what else the store offers in the form of beacons is worth a try. The effort should be used as an awareness tool to supply customers with information about products on sale. Security is and must remain a high priority for the rollout and its updates.
In-store beacon technology is very promising and follows the economic mega-trend of the Internet of Things. Over time, it will be become an important means of communicating with shoppers and delivering offers.
In the near term however, the usage paradigms for beacons still need to be worked out. Integration with multiple apps is an issue, as is the risk of bewildering shoppers with a firehose of offers. Beacons can be particularly challenging in a drug store/grocery environment, where a multitude of products are competing for the shopper’s attention.
Early adopters in the grocery space have seen very mixed success with beacons so far. Eventually, beacons will play an important role in grocery but it would be premature to expect them to drive near-term revenue growth.
One of the biggest stories at the NRF show was beckons, and the numerous uses to drive sales and create relationships. Between the brand interaction and the use of valuable data through analytics, there’s a lot to like here. Everyone will be watching this one.
“Those who question beacons think that the push messaging to consumers’ smartphones may become onerous….”
Equating beacons with just in-store messaging is like thinking a brand new computer can just do email.
Messaging is just the very tip of the iceberg here. Proximity data from beacons will pave the way to smarter store experiences in the future.
Short answer — no.
I think this technology is not quite proven, regardless of what big names say they are deploying it. Until it is much more accurate, it will disturb, confuse, and frustrate to the extent that it will be a net negative.
Rite Aid has enough negatives and it’s kind of surprising during the middle of a potential acquisition.
One of the worst problems of bricks-and-mortar stores is the cacophony of “shouting at the shopper” that the stores already do, beginning with 40,000 products on the shelves, already screaming, “buy me, buy me … NO, BUY ME!” Okay, stir beacons and apps into THAT!
Of course, this could be made effective by whispering, not shouting, IF the retailer restrains themselves with VERY LIMITED targeting. Now you’re dreaming. 😉
I think beacons are useful as greeting of customers as they arrive and leave the store, less useful when inside the store especially given the size of the Rite Aid store. I see providing specific location applications like product finder with beacons, but do customers want to get alerted down every aisle what the special is? The only scenario I see is combining a shopping list with beacons and plot a inside store map for the customer.
Retailer’s using beacons reminds me of going to a flea market type environment and having all the vendors calling out “Hey Mister, come look at what I have for you.” I am not a fan and do not want to be pulled in several directions to buy things I have no interest in.
Beacons are like internet cookies — they let you know who’s passing by (if that person’s installed your app and given you permission). Like cookies they can provide real utility (like helping you resume what you were doing last time) or they can be a real pain (like launching a bunch of targeted pop-up ads).
I suspect that debating the value of beacons is the wrong debate — rather we need to look at the specifics of individual beacon programs to make a determination. As a technology for locating someone beacons are one of the best, however, it is certainly not the only: since beacons require a user’s opt-in permission via an app, all app-based methods of locating someone can be used including geofencing. Further, camera based recognition systems are getting better and better, and have the advantage of not requiring an opt in.
Rite Aid is almost certainly smart to install beacons at their locations because it gives them a lot of flexibility for the future — learning how to best use them will likely take some experimentation.