Beacons: How are they getting CPG brands into the digital game?

Sometimes I leave my phone at home. Blasphemous, right? I don’t do it often, but I just like to try to take a break from it every now and then. You know, go “off the grid” for a bit. One of my favorite times to leave my phone at home is when I’m out in the “real”

old school

Classic quote from the 2003 movie, “Old School”

world, running “real” errands. I just take the time to immerse myself in the task at hand, maybe get a little off course and browse the Bed, Bath & Beyond aisles, if I have the time.

 

Well apparently my “off the grid” time needs to be re-scheduled. Beacons have become a true incentive for you to have your phone on you while you shop.

Bacon, you say? Why would bacon be a reason to have your phone on you? I mean, almost everyone loves bacon but I don’t see the connection to phones. No, no. BEACONS not (delicious) bacon. Beacons are a low-cost piece of hardware that is small enough to attach to a wall or countertop and uses Bluetooth technology to transmit messages or prompts to smart phones or tablets.

(Way) back in 2014, when beacons were beginning to be utilized more and more, Business Insider produced a deep dive report into this technology that is very helpful in understanding just how transformative beacons can be. While there are many potential applications of beacon technology, here are the most relevant points that I’ve gathered from that article and beyond:

1 – Retail outlets are adopting beacons to provide customers with product information, flash sales or deals, and to speed up the checkout process with
a completely contactless payments system.

 

2 – Consumers seem receptive to the use of beacons to enhance their in-store shopping experience since about half of consumers already have their phones on them while in-store.

85% of shoppers would be more likely to shop in stores that offer personalized coupons and 64% would be more likely to shop in stores that offer recommendations for specific products to purchase. These are two prime examples of what beacon technology can do.

3 – With improvements to mobile technology, location-services is becoming more important than ever. Users enjoy personalization in their mobile interactions and it doesn’t get much more personalized than being able to pin point your location. Bluetooth technology, the technology used in beacons, is the best technology to reach consumers in a context-aware location vs. wifi or GPS because it can work across platforms and devices, utilizes low-energy, has high-accuracy in proximity precision and is more secure as it requires users to opt-in.

Given all of this data, beacon technology could be revolutionary for the retail industry, if done right. And since 71% of in-store shoppers who use smartphones for online research say their device has become more important to their in-store experience, it’s certainly an area that I would recommend for brands and retailers alike to capitalize on.

Mondelez, the giant snack-food corporation, caught wind of this opportunity and wanted to shakeup the grocery shopping experience. In June of 2015, they asked a bunchoreo of start-up companies to pitch new ideas to them about how they could captivate the smart-phone attached consumer in-store, specifically utilizing beacon technology and conductive ink. Their business is mostly fueled by impulse driven behavior and people’s phones (and now wearables) are the one thing that is with the consumer where brands can reach them while they make these decisions. For example, if a consumer is in the cookie aisle at Food Emporium they want to be aware of that fact and hit them with a relevant alert about one of their cookie products. [The start-ups returned many ideas that Mondelez was considering but it’s unclear if any officially hit stores.]

However, this can extend to any number of products at retail — other snack foods, home/personal care items and as Oscar Mayer has proven, even deli meats and hot doghot dogs. Oscar Mayer worked out a deal with supermarkets to set up a beacon at the deli counter. While a customer is at the deli counter Oscar Mayer can target them with specials of the week and even include alerts about new product offerings that would hopefully put the brand top-of-mind for the consumer while in the grocery store. This is a whole new way for CPG brands to reach the consumer in real-time while they are making purchase decisions.

While all of this sounds great for retailers and brands alike, I want to acknowledge that there are some downsides to beacon technology as well:

1 – It could seem a bit creepy or a bit like magic, depending on how you see it. Personally, I think that the level of targeting involved in beacon technology makes this experience useful and not a nuisance. It’s more like someone is looking out for you than someone is stalking you. It’s not particularly intrusive because you were going to the store anyway so you might as well get a good deal while you’re at it.

2 – There are a few barriers to wide adoption of beacon technology:

  • There are several layers of permissions
  • Customers have to turn on Bluetooth in the first place
  • Customers have to accept location services on the relevant app and opt-in to receive in-store or indoor notifications

While these issues do exist this type of technology feels like it is a long time coming for CPG brands who have notoriously been left behind with regard to digital applications. With beacon technology, CPG brands are no longer living in the pre-mobile age. There is certainly a longevity here for the category and it seems that it can only get better as the technology progresses. In fact, digital spending of CPG brands is predicted to increase to $7 billion by 2018.

So, until we are all walking around like robots with tracking chips automatically implanted under our skin at birth, I’d say I’ll be rescheduling my off-the-grid time and bringing my phone on more shopping trips to save some money.

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