If you own a physical store, the internet may not be your best friend. It allows online stores to take away a sizeable volume of your customers besides forcing you to cut margins. Now, imagine what you can achieve if you could motivate someone on the street or a neighboring outlet to visit your store. Think about the extra sales you will get if you persuade people in your store to make an immediate purchase. You can do all these things with proximity marketing. It is the latest innovation in local marketing, and if you don’t take advantage of it, you will lose out to competitors.
Proximity marketing – basics
Proximity marketing is a method of increasing sales by contacting people near the outlet. Timing and context can often make all the difference for retail outlets. Proximity marketing is about striking the iron when it is hot. You can advertise a product or service to people who are inside or near your shop. It’s like having salesmen around the street urging people to visit your outlet or someone in the shop encouraging visitors to try a new product. Thanks to technology and the popularity of smartphones, you can now do this automatically and reliably. It will help you boost visitor traffic and sales.
The technology – how it works
The use of technology in proximity marketing was first attempted a few years back with QR codes. Customers had to scan a QR code on their mobile phones. The application would then take the user to a website, which gave them the message or the offer. It did not become popular mainly due to the complexity of the process. It relied on people noticing the QR code, having a smartphone, an internet connection, and the willingness to go through the process. Fortunately, smartphones and mobile data plans are popular now and things are far simpler.
Although technologies like GPS and Near Field Communication (NFC) can be used for proximity marketing, it became a realistic option when Apple introduced the iBeacon technology. iBeacon works with Apple’s location service and allows the device to detect low-energy Bluetooth signals sent by iBeacon transmitters nearby. Devices running iOS 7 or higher will be able to detect the signals. Besides making the technology available, Apple is encouraging developers to create applications around it. The transmitters and apps are provided by third parties. Unlike GPS, iBeacon works well indoors and can be used to accurately pinpoint a user’s location.
With the help of proximity marketing apps like Warble, iBeacon can be used to detect devices within the range of a transmitter and send offers, coupons, or other information to influence visitors and modify their buying decision. When a visitor’s device detects the beacon, the proximity marketing app on the device sends the information to the shop’s server. The server then sends pre-programmed push notifications to the device.
You can install several transmitters in your outlet. The range of iBeacon transmitters is low and it cannot reach people far away from your shop. You can track the movement of people in or near your outlet as they move from one location to another. This allows you to send highly context-sensitive messages to guide or persuade your visitors to take the desired action. You could, for example, make a special offer just when the customer is about to leave your shop. It is also possible to draw the visitor’s attention to a new product just when he or she is near the item or at the checkout counter.
iBeacon technology is not intrusive and works with the user’s consent. The user must install the shopping app and switch on Bluetooth for it to work. For most purposes, it will also need an active mobile data connection. If users don’t want to be disturbed, they can just turn off Bluetooth or mobile data, or remove the app. However, most people will use this feature because it allows them to get secret deals and information from several stores. The technology works only in a limited range when they are near the outlet. It’s different from being spammed via email or text messages. People are also increasingly willing to make harmless compromises to their privacy as long as they benefit from it.
The benefits of proximity marketing using iBeacon
Besides allowing you to contact people near your shop, iBeacon gives you several benefits.
- You get your message across when people are in the best position to act on your messages. It’s much easier for people to walk into a store when they are next to it.
- You can urge people to act immediately on your message. As the receiver is near your store, it also makes sense for them to act right away rather than coming back later.
- You have many opportunities to contact the same person. If you have several transmitters, you can get in touch with people as they move from one location to another within or around your store. This allows you to change your messages according to the person’s location.
- People are unlikely to miss mobile notifications, which is often the case with signs and other store displays.
- You will be able to collect a wealth of data on visitor behavior. This opens up many possibilities. You can use this data to find out what works and what doesn’t. You will know which sections in your store get low traffic. You can use the data to optimize your store’s layout and improve customer experience.
Why you can’t afford to ignore proximity marketing
The smartphone has captivated and grabbed the attention of its users. People are engrossed in their phones to such a degree that they are not paying enough attention to what is happening around them. These days, the best way to reach people is to contact them on their phones. It is a bad idea to ignore this reality and stay only with traditional methods of advertising like signs and banners. Your signs, ads, and other promotional materials will mostly go unnoticed.,
Unlike Facebook ads, text messaging or emails, proximity marketing has the big advantage of context. You are getting in touch with the people when they are most likely to take your offer seriously or make a purchase. The average click-through rate is less than 3 percent for email and less than 1 percent for Facebook ads. Compare that with the 60- to 80-percent hit rate of proximity marketing and it’s a no-brainer.
If you don’t take advantage of proximity marketing, you will soon be losing business to competitors. About half of the top retailers in the US are already trying the technology. Macy’s has installed beacons in about 800 locations. Experts expect the retail sector to make a killing with an increase of over $40 billion in extra sales. It will just be a matter of time before your competitors start using proximity marketing. Like most things in marketing, slow and steady loses the race. If you don’t start using the technology quickly, you will be on the receiving end.
Proximity marketing has a bright future because Apple is promoting the iBeacon technology and it is unlikely to fail. The method has many proven benefits and large players are already investing heavily into it. This will bring more resources to improve the technology and it will interest developers wanting to profit from it. It is the next giant leap in retail. Local businesses that start using the technology will definitely get a head start over others waiting on the sidelines.