Proximity Marketing

August 28, 2015
Romet Kallas
Account Executive

Beacons are much more than location and push notifications. In order to achieve real personalization, we need to go further and beyond. According to research by Econsultancy in association with RedEye from September 2014, only 23% of client side marketers worldwide personalized offline channels. Compared with 88% who used email personalization and 44% who did so for websites. In April 2015 a study by Researchscape for Evergage, revealed that 49% of marketers worldwide expected to increase their spending on personalization this year. However, one crucial shortcoming is preventing them from succeeding.

According to VB Insight study June 2015, marketers struggle with data collection: 80% worldwide said they didn’t understand their customers beyond basic data such as demographics and purchase history.

Is personalization possible with only basic data?

The answer is no. Personalization is the ultimate form of targeted marketing, where the focus is on the individual by serving an individual customer experience with relevant product offerings. One could argue that personalization is just a modern overrated marketing term, but according to LBMA, 45% of customers are more likely to purchase from businesses that offer personalized recommendations. Since the demand for personalized experience is growing exponentially, as 60% of US consumers already expect to experience it, it is not something that can be overlooked. So how can we achieve the personal approach?

Mass communication is dead

The generic mass approach is simply not working anymore. Marketers have had to adapt by taking the personal approach. Email marketers have started to utilize big data to segment their audiences based on past purchase and web browsing history, but is that enough to achieve the personalized experience? While seeing your name in the email subject is still flattering, purchase and web browsing history alone, will not lead to a unique customer experience. Since 94% of shopping is still done at brick-and-mortar stores, the online data is only a tiny part of the personalized experience. To truly understand a customer, one needs to turn to proximity!

Beacons to the rescue

The secret of understanding the customer, lies in the physical space. But the proximity market is still young and there is very little actual proximity data. Early uses of beacons, such as sending unsolicited coupons to users, were (rightly so) perceived as spam by customers and did not enhance the guest’s experience. It important is to keep in mind when it comes to proximity marketing, that it is all about the customer.

Personalized experiences are not about pushing generic offers to customers’ phones, it is so much more than that. Companies have to be creative  in order to achieve the personalized experience. Here are a few examples of how proximity solution providers have approached personalization:

Retail giant Carrefour is running a successful beacon campaign in co-operation with Kontakt.io that increased 400% in mobile app engagement and 600% new users. The project was executed with the customer experience as a forefront priority. To take it to the next level, the retailer is releasing a new feature which is a shareable real-time shopping list. So once a user is in the store, they will get a notification, if someone they share the list with, has added a new product to the shopping list. To top it off, the customer will be taken to that product with the help of beacons and in app navigation. Now that is personalization.

Restaurant music platform Rockbot has taken a unique approach as they deployed its beacon solution to brands such as Buffalo Wild Wings, Schlotzsky’s, Bagger Dave’s, and Arooga’s, as well as leading retail, fitness, and destination brands including Gap, Anytime Fitness, and JetBlue. As described by TechCrunch, the beacons automatically welcome a customer and add one of their favorite songs to the restaurant’s background music. Results to date show a 101% increase in engagement via mobile.

United Airlines teamed up with Locus Labs, to address the outdated navigation in an airport. With no other way for unseasoned travels to get around besides large map kiosks, airport navigation has long been due for an upgrade. The beacon project is rolled out due to lower the stress and ease the lives of the customers through an accurate indoor navigation platform. “This is a very specific technology that talks to a real need of the customer,” explained Shannon Kelly, Director of eCommerce Planning and Delivery at United. “We had the technology, we had the customer need for it.”.

While it is not in the project plan to use the location for contextual marketing yet, “We [can] combine this location information with their itinerary to be able to really provide a customized experience.” said Jennifer Dohm a spokesman for United. Marketers are aware that personalization is the way forward, but they struggle to utilize advanced data.

While basic data like demographics and purchase history are important, it is not sufficient for  the personal approach. Today’s personalization is all about providing the individual customer experience and this is where proximity comes in.

Generating non generic customized push notifications is a challenge, because most of the beacon projects are in pilot and there is still little proximity data. While the market is still young, proximity solution providers have to be clever in other ways. When pilot projects turn into actual campaigns and there is enough proximity data, we will understand the true meaning of personalization. Companies not seeking to move beyond basic customer data will never be able to truly personalize, and as we can see see in the examples mentioned above, innovative companies are already investing in technology that provide richer data - like beacons and proximity.

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