Craft several pilot tests when beginning the iBeacon journey

Posted by Ed Anderson on Jun 5, 2014 10:30:00 AM
Ed Anderson

 

In our last post, we concluded that now is the time for retailers to increase ad spend through their mobile apps at the shelf. Many retailers have wanted to digitize and personalize their brick-and-mortar stores for some time, but lacked a promising delivery process. Today, however, emerging mobile platforms uniquely offer the possibility of solving both the fundamental challenges of personalization and conversion.

The emergence of Bluetooth Low Energy sensors, now often referred to as iBeacons, has fundamentally altered our ability to present offers and product information to shoppers at the shelf in a much more engaging way than before…a way that is analogous to the best practices of personalization in e-commerce, but delivered in the brick- and-mortar store.

Kurt Salmon has created a particularly interesting measurement methodology to assess the improvement in traffic, conversion and cross sell resulting from 1:1 personalization:

Kurt_Salmon_Conversion_Metrics


How to design your pilot tests.

 

The benefits of increased traffic, improved conversion rates and better cross sell results are all highly desirable outcomes for retailers’ physical stores. These ideas are a good starting point when debating pilot test ideas. In addition, though, each retail chain should also consider their competitive situation and strategic goals when planning what they want to pilot test in their iBeacon journey. Since there are several competing ways to go about achieving these benefits, it is risky to just go “all in” on one of these ways without critically comparing the uplift in a real-world store environment to other possibly good ideas. 

You may want to hold a formal workshop with merchants, store operations and digital marketing personnel to brainstorm objectives, pilot test ideas and other details such as cross sell opportunities, and signage or incentives to get shoppers engaged. In addition, the workshop should settle on what to measure in addition to conversion metrics highlighted above. For instance, you may want to measure the number of your apps downloaded by pilot test type, or do a survey on what user reactions were the shopping experience for each pilot test. A link to a survey could be distributed at check-out for shoppers redeeming offers through iBeacons, and coupons should be added as a thank you for the feedback.

Here is an example of pilot test alternatives:

Pilot test 1:Push a welcome to the shopper upon entering the store and suggest he/she turn on the retailer’s app to receive special deals at the shelf…20 beacons positioned near by items that are frequently advertised in freestanding inserts. Emphasis is on pull marketing with double opt-in so the shopper is receiving offers on items they seek deals on.

Pilot test 2: Emphasis on pull marketing, as in Pilot test 1, but with three times as many pull beacons. Products with superior conversion performance are identified and used in the chain wide roll-out.

Pilot test 3: Emphasis on pull marketing, as in Pilot test 1, supplemented by cross sell offers in the same merchandise category or a different category…e.g. hair conditioner when looking at offers for shampoo or drier sheets when looking at washing machine detergent…20 beacons positioned near frequently purchased items supplemented by 20 push beacons for cross sell opportunities of the 20 pull beacons. Structure the cross sell offers so that both cross sell frequency and quality are measured.

Pilot test 4: Emphasis on push marketing using the micro–location of the shopper to trigger sending offers to the shopper in the department they are dwelling in…20 beacons positioned in key shopping zones/departments. 

Include at least ten stores in each Pilot test

In order to get valid test results, the test stores should have similar characteristics and enough stores to ensure that results can be extrapolated across the entire chain. This cell size may vary by vertical or format the retailer operates in, but you’d want enough stores in each cell (five to ten stores) to allow for the results to be a valid “proof point.”

Many retailers have omnichannel initiatives, and the iBeacon journey must consider how it fits into the larger omnichannel strategy.

Pilot testing alternate ways to improve personalization and conversion will lead to a better performance in the chain-wide rollout of iBeacons at the shelf.

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