Mobile commerce has risen rapidly, growing by 40% in 2017 alone. Not only does spend on mobile account for 60% of all ecommerce spend, spend on mobile now accounts for 6% of total retail sales globally! That is now $1.4 trillion USD per year!
This shift is having a major and sometimes devastating impact on the retail sector. But the retail sector is not going away – after all, people gotta eat. But rather than competing with mobile, the retail sector is starting to adopt mobile to augment, compliment and improve the service they can provide. If you can’t beat em, join em!
One way to bridge the gap between the physical and mobile world is to use geofencing and beacons. In this blog article, we’ll explain what geofencing and beacons are and how we’ve seen them used by Kumulos customers in different sectors.
Think of geofencing like building a virtual garden fence around an area – this is called a geofence. It requires no additional hardware other than the location-aware iOS or Android mobile device your app is installed on.
In Kumulos, you just enter an address and then define an area around that position to create a geofence. Using the built in GPS from the users’ device, Kumulos then sends periodic updates of the user’s location that can be used to determine if they have entered a geofence around an area of interest.
Beacons are Bluetooth Low Energy (BLE) hardware devices that transmit their presence via one of two protocols to any bluetooth enabled mobile devices in proximity. While the exact range of beacons will depend on a number of factors such as the quality of the bluetooth antenna and surrounding objects, ranges of 70m are quoted.
You’re probably more familiar with the Apple branded iBeacon protocol for iOS devices – indeed many people interchange the term Beacon and iBeacon incorrectly. Android devices predominately use Google’s Eddystone protocol. Beacon vendors supply devices supporting one or both of these protocols. At Kumulos, we have had great fun with the Estimote TM Development Kit and Beacons – these brightly colored, chunky devices support both the iBeacon and Eddystone protocols meaning they work with both iOS and Android devices. They also have a battery life of around 2 years, which is perfect for playing with in the office.
While both protocols transmit their presence via Bluetooth to nearby smartphones, there are two important points to clarify to understand how this can then be used in practice.
Firstly, in order to detect a nearby beacon, an app must register with iOS or Android that it wants to listen for beacons with specific identifiers (i.e. your beacons). In other words, a user must have your app installed for beacons to work and your app can only detect proximity to your beacons.
Secondly, beacons do not transmit any content other than their identifier – they are incapable of sending advertising or promotional content to a mobile – it is up to your app to present any content to the user when they are in proximity to a beacon. Kumulos allows you to manage what content to display and when it should be displayed when users come into proximity with different beacons.
Geofencing and Beacons – Use Cases
So with all of that in mind, lets look at a few examples of how Geofencing and Beacons have been put to good use in different sectors.
Food – Targeted Advertising
Brands like McDonalds have had great success integrating iBeacons into their restaurants for context targeted advertising. By adding a beacon into the restaurant where customers queue for food, they have beee able to increase sales by offering promotions and special offers and reduce bounce rate during busy periods. The conversion rate of these offers is higher as a customer has already demonstrated an interest by entering the restaurant.
This could be complimented by adding a geofence with a range of 20m (for example) from the entrance to encourage other customers who are passing by (i.e. who already have the app) into the restaurant. However, with this type of campaign you need to consider at what time of day this is more likely to be effective and how often to notify a user
If a potential customer walks past the store as part of their commute to work, they are unlikely to be receptive to two notifications a day. For this reason, Kumulos supports rate limiting to (for example) only notify users at the time of day they are likely to eat and at most once per week – this will help walk the line between information and nuisance.
Retail – Customer Assistance
The last twelve months have been extremely challenging for the retail sector with several well known names closing down and disappearing from our high streets, shopping malls and out-of-town retail parks. Perhaps none more notably than Toys-R-Us which filed for bankruptcy after more than six decades of trading.
Since their launch, there have been numerous ventures integrating beacons into the retail experience – we have already covered targeted advertising in our previous example, in this example we’re going to look at empowering staff to better assist customers whether in a BestBuy or a car dealership.
Customers in-store will be using your app (and others) on their phones while they shop to check prices and read reviews. If sales staff continue to work exactly as they always have done, the customer will likely have more information than the staff if they are having to rely only on their personal knowledge of what is on sale and what is in stock never mind who the customer is, what they have bought previously and what similar customers have gone onto purchase as well or instead.
By fitting beacons around a store, for example in the electronics isle or around specific high-value products, staff can be notified when specific customers are in proximity to specific products. Amazon knows who its customers are and what they are interested in buying – why shouldn’t everyone!?
The goal is to increase engagement with high-value customers who are likely to buy from the moment they enter the store by, for example, using any prior data we have on their sales preferences or how often they have visited a specific section or product.
When they approach a specific product stand, for example that shiny new iMac, we can provide a shop assistant with all the relevant finance options available and answers to any other common questions other buyers have had. The shop assistant could even take payment or make the purchase on behalf of the customer without needing to go to a checkout. This will help creates a far more appealing customer experience that will be essential if large retailers are to survive.
Kumulos records and reports beacon activations, which can be used to improve how we layout beacons in our store and how we market to customers based on movement around the store and time spent in specific areas. A customer who visits a specific area or product frequently can be sent targeted special offers to convert into a sale.
Museums – Guided Tour
Although the idea of a multimedia tour around a museum and its exhibits is nothing new, the user experience can be much improved by allowing users to use their own mobile device and by automatically detecting exhibits that they are close to.
A geofence around the museum can be used to detect that a customer has entered and trigger a notification to remind them that the app can provide them a guided tour. When they open the app and it is in foreground, the app can use ranging to detect all beacons in proximity.
When our user is in proximity of one or more exhibits we can present them a quick preview list of all these exhibits. The user can simply choose which exhibit they are most interested by walking towards it. When the app detects they are in closer proximity to that exhibit, it can then load a more detailed view and begin the audio commentary. As they walk away again we can stop the commentary and go back to the preview.
None of this is necessarily providing new features or capabilities to our user, but the experience of using the app is now more streamlined and naturally linked to their location and context compared to selecting from layers of menus.
Events – Catering
In the use cases we have discussed so far, the beacons are stationary while our users and their mobiles move around them. However, in the context of an event, in anything from a football game to a broadway show our users will be stationary once they are in their seats.
In this scenario it is ice cream sellers and hotdog vendors who are moving around the theatre or stadium. If we attach a beacon to the vendor then we can notify our users when they are within proximity, hopefully right at the range where they can smell those dogs!
We can now provide special offers in a similar way to the McDonald’s restaurant above, but we can also use this as part of the workflow for the vendor so they can start preparing the order if a customer opens the notification. So, notifying potential customers that the vendor is in proximity will hopefully drive sales and reduce the wait time after ordering.
We can also use stationary beacons to track the vendors movement around the event and use this to provide real-time data in the app, for example distance of nearest vendor and probable time until they will be in proximity again.
Geofencing and beacons are not new – Apple quietly unveiled support for the iBeacon protocol in iOS7 at WWDC 2013, but we are now starting to see geofencing and beacons be put to good use across a variety of sectors such as restaurants, retail and events to increase sales and provide a better customer experience. Over the coming years it is likely that use cases in other sectors such as fleet management or asset tracking will emerge.
However, geofences and beacons on their own will not increase sales or improve the user experience. You need to think about what content to display and when, being careful to limit notifications so that your app is helpful rather than annoying. In theory, you can do all of this in your app yourself, but in practice some trial and error will be required to tailor the frequency and content you send to your users to maximise the effectiveness of a campaign. To avoid having to constantly update your app with new notification strategies or content, you can use Kumulos to define geofences and beacons and then build, run, report (and refine) automated marketing campaigns to increase sales and improve the user experience.
If you have not already done so, signup for a free 30 day trial of Kumulos today.