The market for proximity data is still young, and new players are entering the industry every week. Because of this, people still rightfully ask: What is proximity? How do beacons work? And why is this type of technology important? There is both a curiosity and a lack of information about the Proximity Marketing industry and its possibilities. Well, look no further, we got you covered.
1. What is proximity? Why use it?
Proximity marketing is utilizing customer location to communicate marketing offers. Using location technology to send customers in certain locations exciting offers and marketing messages. To help visualize this, image that you enter a store and on your phone you receive a personalized offer giving you say 10% discount at said store. But proximity marketing is so much more than just precise location and push notifications; it is the enabler of relevant communication between a brand and a customer. In order to achieve real personalization, we need to go further and beyond.
So why should businesses use it? It enables them to tailor messages and offers directly to their customers. It also helps give the business a perspective and a deeper understanding of who their customer is based on their preferences, location and pattern of behaviour. The secret to understanding the customer lies in the physical space. Personalized experiences are not about pushing generic offers to customer’s phones, it is about understanding the customer. Companies need to be creative in order to achieve this personalized experience, and those not seeking to move beyond basic customer data will never be able to truly personalize, and as we have seen, the most innovative companies are already investing in technology that provides richer data – like beacons and proximity.
2. How does it work?
Next up, how does this technology really work? There are four ways to enable proximity marketing: Bluetooth, WiFi, NFC and Geofencing. Here's what you need to know about how they work:
Beacons are the latest technology in location marketing. A beacon is a BLE (Bluethooth Low Energy) hardware device that broadcasts a signal that smartphones can listen for when users opt-in within a particular mobile app. When the smartphone enters a beacon range (usually up to 50 meters), it wakes up and notifies the listening app. Beacons are used to ensure that a user has entered the venue, and not only passing by. Deploying multiple beacons throughout the store, gives the opted-in app the ability to learn user interest and trigger proximity-specific content using push notifications and in-app messages.
Apple’s iBeacon and Google’s Eddystone are the primary beacon standards used in the proximity industry. While both beacon standards are supported on iOS as well as Android, the secret to Eddystone’s rapid growth might lie in the new capabilities. Namely, Eddystone can trigger notifications in an app just like iBeacon, but can also broadcast a link via a browser, without the need for an app.
WiFi is used on an internet enabled device and uses location technology to gather information about the user, where the user needs to login to enable the communication. This information is connected on the browser level.
NFC (Near Field Communication): Near field communication is short range wireless RFID technology to allow two devices to communicate when they are in proximity of each other. Examples include using your phone to pay at a store or restaurant. NFC currently only works on Android, but there are strong rumors that Apple will open up in 2016.
GPS/Geofencing: A geofence is a virtual fence around a particular geographic area and usually represents a physical location such as a store or a venue. The geofence information is used by the mobile app to trigger events when a user enters or leaves that area. However, due to its lack of reliability indoors, businesses might need to supplement their GPS with other technologies for indoor location use, like beacons.
3. Why is proximity powerful?
In today’s marketplace, customer loyalty is important as ever. Consumers of today will be loyal to the brands that invest in getting to know their individualities, interests and habits in order to give them offerings that are relevant and help them in their daily lives. Big online players like Amazon are able to collect a hugely diverse amount of information about customers, whereas offline retailers have not had the same possibility to do so. That is until proximity and beacons arrived. 70% of our time is spent actively offline and in terms of either gathering data about customers offline behavior and providing relevant communication based on that, there is no better solution than proximity. That is why Amazon opened its first brick and mortar location in November of last year. “Amazon’s Retail Store has Nothing to with Selling Books”, and everything to do with data, according to Rob Salkowitz’ Forbes article.
Many retailers and brands are so preoccupied with the potential risks of realizing the value of their data, that they forget why the data is valuable in the first place. The truth is that as long as consumer trust and transparency are handled well, they are open for their behavior being understood return for products and services that make their lives easier.
4. Common misconceptions about beacons and proximity?
Although 2016 has started off with some very exciting news in the beacon world, including Rite Aid’s deployment of beacons in 4500 locations as well as Verifone starting to use Footmark’s beacons in their Point of Sale systems. Despite this, there are still common misconceptions about the use of beacons and proximity marketing. Some of these misconceptions include the idea that beacons are creepy and track you everywhere you go, beacons are only used for intrusive push notifications and the only way to use beacons is with an app. This is not true.
5. Use cases: 4 lessons to master mobile engagement
Getting started with proximity is not that hard, but how do you actually get it right? This question is at the very top of every global marketer’s action list. The answer is simple, really: Know your audience, provide real value and respect their privacy. Unfortunately, that is often easier said than done, as a lot of the times the engagement turns out to be either intrusive, generic or non-relevant or all of the above. Some tips include learning how to not intrude on your customers, getting creative and knowing your audience.
6.Unacast retargeting: Proximity equals success
Proximity has the unique ability to both communicate digitally with consumers as they experience the physical space and to connect that consumers to their digital self. In effect enabling targeting and retargeting in digital domain based on granular physical behavior and intent.
This is exactly what a soft drink company set out to achieve when they took advantage of these new possibilities as CAPA, a member of the largest commercial cinema group in the Nordics, installed proximity sensors (beacons) in one of their largest cinemas. The proximity technology and retargeting possibilities were offered by Unacast, and the ads displayed in VG, Norway’s largest newspaper.
The campaign ran for close to eight weeks, and the results are extraordinary. 24% clicked on the offer at the location to collect a free soda, 60% clicked on the offer at the location to collect a free soda and 25% returned to the location to collect the free cinema ticket. VG, Norway’s largest newspaper, normally has a 0,18% click-through on online ads, pointing to a massive 300x uplift.
7. Future of proximity: 7 proximity trends
What does the future of Proximity marketing and beacons look like? Here are some of the proximity trends you should know about for 2016. There will be a larger focus on proximity liberated from the application, more focus on the quality of the proximity data and proximity security as a demand.
Want to learn more?
Hopefully this introduction to what proximity marketing and beacon technology is have helped you understand this growing industry and what the future of proximity might look like.