Why retailers can't ignore Proximity Marketing

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By: Wise Marketer Staff |

Posted on April 8, 2015

Why retailers can't ignore Proximity Marketing

With the news that Ted Baker is adopting Beacon technology in its Westfield London store, the fashion industry is going to be waking up to proximity marketing in a big way, according to by Ian Malone, CEO for Airspace, who believes that other retailers have no choice but to follow suit.

Ted Baker is using beacons embedded in mannequins to deliver engagement to nearby smartphone users. What kind of engagement that is we'll have to wait and see, but here are just a few ways a fashion retailer could be using the tech, many of which also apply to non-fashion stores.

In larger stores that have a large range of SKU's it would be simple to create a 'What's trending in-store today'. Large chains could also do the same across their network of stores.

Again in larger stores, including department stores, turn-by-turn navigation can be matched on-mobile product searches. A query for particular designer could be a fashion example.

Stores that have invested in Wi-Fi can deliver rich content experiences, like video-based collection previews from favourite designer brands.

Fashion-focused retail locations, such as Westfield for example, can create fashioned-themed experiences that only proximity-enabled devices can see, like a virtual catwalk from a designer or well-known fashion stylist.

When beacons are connected to a real-time CMS (such as Airspace, for example), they are capable of delivering instant campaigns (such as flash sales) or can be used to flag a new product/piece/range that has just arrived in-store.

You will have noticed the common theme here: Value. Not in the discount sense, although there's nothing wrong with using vouchers to increase conversion. Value as in delivering something to the shopper that goes beyond the standard retail experience of 'Here are some clothes we'd like you to buy. Please try them on.' Stores, as pretty much everyone agrees, are going to have to become more experience-focused as they deal with the challenges of increased price competition from online, reduced footfall on the high street, and ever-rising costs.

"Stores that don't use proximity engagement as one of the tools to increase conversion rates for each visitor are going to lose out. I think that's why Ted Baker is acting now," explained Malone.

And there is another type of value: a value exchange between shopper and store. In return for downloading and continuing to use your app (and as such contribute valuable, anonymous in-store analytics data on behavioural movement patterns, as just one example of value that goes back to the retailer) the shopper is very happy indeed to receive something of value to them, like the heads up on what's trending or an invite to a collection preview.

In the near future there will be an even more personal level of engagement available, when eCommerce and retail teams start to work together to create genuine bricks-to-clicks experiences. For example, if you know that a shopper has looked at a particular handbag five times online but not yet committed the item to their basket, they can be reminded that the item is in-stock when they visit the physical store - and even be directed to the precise shelf from anywhere in the store. They should also be able to buy the bag using a mobile payment, so they can avoid the queue at the till.

It could be very easy to see that the fashion industry has the most to gain from creating these 'super-connected' stores but every day we see how virtually every retailer, leisure brand or hospitality venue can also be creating a value-added mobile experience to increase conversion, loyalty and hopefully best-of-all, a repeat visit and the opportunity to enhance the relationship again (and again and again…).

While Ted Baker was one of the first fashion brands in the UK to see what's possible, it is the US where the technology has the greatest near-term potential. Proximity adoption in the UK is around 9-12 months behind that of the US, where major brands are already keen to deploy this new, more intimate technology. Last year, 35,000 beacons were deployed in the US, a figure that is set to rise to 6 million units by the end of 2016.

"What's driving that massive scale of adoption? It's probably got a lot to do with the notification open rates and subsequent tap-to-engage, which have been seen at 80%+ and 30-35% respectively, on average," concluded Malone. "If anything, these figures prove proximity is not a fashionable trend - it's a new and deeply valuable communications channel that is here to stay."

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