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One-Third Of The Top 50 US Retailers To Roll Out Beacon Programs

Unacast’s Proxbook finds 20 percent growth in the global use of beacons in Q1.

Retailers who use beacons have expanded beyond single-store pilot programs to large-scale proximity marketing campaigns that span multiple locations, as worldwide deployments of mobile-based sensors rose 20 percent to 6.2 million in Q1.

When it comes to proximity sensors, beacons are by far the primary format, comprising 5 million of those 6.2 million sensor deployments, according to proximity marketing platform Unacast’s Q1 Proxbook, a database cataloguing location targeting providers. The Proxbook report can be accessed here. (Full disclosure: GeoMarketing is a media partner with Proxbook.)

Even though beacons as a marketing platform have entered their third year of use, the success stories are already propelling broader expansion of such proximity campaigns. Among several listed in the latest Proxbook report, Elle Magazine’s ShopNow! program delivered 500,000 in-store visits across 700 outlets from retail partners Barnes & NoblesLevi’sGuess, and Vince Camuto in the U.S last September and October.

On top of the in-store attribution, the beacon program generated a collective $439,950 in revenue for participating stores. The program was conducted by a team of location marketing companies including Swirl Networks on beacons, coupon marketplace RetailMeNot and ShopAdvisor on mobile app deals, and proximity specialist  which handled some geofencing in certain cases.

Free The Mobile Browser

As that sales test proved the value of beacons, Thomas Walle, Unacast co-founder and CEO, noted that beacons programs are set to “explode.” In addition, thanks to Google Eddystone’s ability to tie messages to sites on the mobile web through Chrome, beacons are being “freed” from having to rely on branded apps. In addition, Apple’s iOS is also working to bridge the gap between the mobile browser and apps as deep-linking capabilities grow.

“A spike in industry growth is expected with the recently launched native support of Google’s Eddystone beacon format on Chrome, liberating proximity interactions from the App by triggering URL’s directly,” Walle said.

About 80 percent of smartphones are now passively beacon-enabled and 45 percent of the industry now supports Eddystone — up from 5 percent nine months ago.

Among the other topline findings in the report:

  • The leading six investments into proximity totalled $115.7M and were mainly dedicated to improving data accuracy and location analytics to understand customer behavior in physical locations
  • Global retailers and brands including Elle and House of Blue Jeans share exclusive results from proximity campaigns in Unacast’s Q1 2016 Proxbook report
  • Success fuels 17 percent growth in global sensor deployments to 6.2m (5m beacons) and 20 percent industry growth
  • A third of top 50 US retailers plan major beacon projects in 2016
  • Prominent New York retailers and shopping app, Notify Nearby, leveraged taste and location to notify shoppers of updates ranging from new lines to special offers when they passed a store stocking their favorite brands, resulting in 52 percent of passers-by going into store, 28 percent making a purchase
  • London’s luxury retailers achieved 1.5x increase in purchase frequency via beacon-enabled app KNOMI, which based on expressed interest in designers, products, influencers and stores notified shoppers of relevant nearby stores and once in store, of product highlights
  • Proxbook now includes 293 members from 45 countries up 20 percent since Q4 2015
  • The number of proximity sensors deployed globally has increased 17 percent to 6,201,000 from 5,103 500. The number of beacons stands at 4,988,500, a number which continues to track ABI Research’s forecast of 8 million beacons deployed by end of 2016 and 400 million by 2020

The Test Prep Is Over

Retail remains the largest business category for beacons and sensors, Walle noted. Those businesses are likely to remain the primary user of beacons, even as healthcare and transportation providers also expand their respective deployments.

The bottom line for retail is that the benefits from online-to-offline marketing are so direct, particularly as they become more mainstream forms of reaching consumers by major brands.

“2015, especially going from Q2 through Q4, was very much about testing,” Walle said. “We’ve all seen this: a big retailer wants a pilot beacon, but they do a couple of stores. They test it for a couple of months and then they review. But the scale isn’t there to tell them how well it worked. We’ve come to a certain point now where brands and retailers of other companies are confident enough that proximity marketing is becoming a permanent part of their technology marketing. This isn’t about baby steps anymore. They are taking the leap and say, ‘This is something that we want to embrace, so let’s plug this for the whole organization.’”

From Discounts To Retargeting

As the use of beacons matures, marketing ideas are evolving as well. Retailers in particular have started to move from the thinking of beacons as vehicles for delivering discounts via branded apps to viewing them as a way to reach in-store shoppers after they’ve exited, through retargeting across other platforms.

“For beacons to continue to work, it needs to demonstrate the analytics and attribution around connecting with customers and it needs to prove itself as a retargeting tool,” Walle said. “That’s how you can tie everything together. A lot of our partners deploy beacons in order to use that data for online retargeting and to create a better user experience overall. We have been working on more cases now with our partners where we use the beacon data for retargeting, as in the case of a restaurant chain. Beacons can promote return visits based on previous restaurant orders, so that the recurring part is not simply an add-on to an existing program; it becomes part of the overall relationship between the brand and its customers.”

Proximity KPIs Emerge

As Elle magazine’s proximity marketing program showed last fall, brands can get a fuller view on whether the advertising “worked” to drive in-store visits and sales. But as with most digital marketing programs, a clear, standard audience metric similar to TV’s Nielsen ratings is elusive when it comes to proximity programs.

While “engagement” metrics are often used to compare and contrast various efforts involving beacons and proximity, Walle doesn’t expect that an “industry standard metric” allowing for an apples-to-apples comparison of proximity campaigns will emerge any time soon. For the most part, the use cases are too varied. But that doesn’t mean it is impossible to develop benchmarks.

“There’s no kind of clickthrough rate for beacons like you have in online advertising space, but we are now starting to see commonalities like use of KPIs across the vendors,” Walle said. “This is very much about how the market will develop. As brands continue to use beacons, we can look at open rates, which can be considered a way to measure engagement.”

Other questions that beacons can answer broadly for marketers as evidence of effectiveness might include “Did we manage to engage the customer in the store? Did the beacon message get more sales? Could you see any sales lift in the products that were featured or promoted in the store?”

“Those are the main KPIs that brands can focus on when it comes to evaluating the impact of beacons on their marketing efforts,” Walle said. “The exciting thing  with proximity technology is that you can actually start to dig into attribution plans and use online attribution as one of the key metrics to find out how well you’re executing on your marketing.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.