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How to place beacons in a supermarket for high sales conversion

Written by Ed Anderson | Feb 6, 2015 8:55:00 PM

Beacon solutions for brick and mortar retail are mentioned in most of the published reports on hot retail trends for 2015. The devil is in the details is a phrase that applies to initial beacon solution deployment set up. Good intent isn't enough...immersion in the details is a huge help in crafting a solution that will work with your customer. As one of our advisors, Mike Clifford former CIO of Whole Foods said:

 

  • I got excited about Shelfbucks because I think it'll work...I've looked at a lot of apps in my time as a CIO, and you just know they are not going to work. I think a lot retailers use those apps because they want to play in the digital game, they want to be able to say that they are doing these things. But I don't think they make any money, I don't think they achieve their objectives. But I think Shelfbucks will work.
  • Shelfbucks will work because it has a practical delivery in a coupon that customers can recognize...it has something that customers can relate to in a traditional print media, and here it is on-line thru a digital delivery--so it has this cool factor of getting it thru a digital device and a traditional factor of something they are already familiar with and they can use
  • If you want to make a ten times change in technology in a retail brick and mortar experience, you have to do that one "X" at a time...if you try to do it 10X at a time, the customer is not going to be familiar with it
  • What the customer gets, is something they are familiar with, it's just now in a digital form so it has that cool factor and a traditional factor

 

Let's look at a planogram of a large supermarket (created by the author) with clusters of paper coupons at the shelf (green connotes clusters of 1-4 items and red connotes 5 or more items):

The big picture of beacon solutions in a brick and mortar store is to bridge the old with the new...to leverage the consumers' familiarity with paper coupons, AND to exploit the prevalence of shoppers carrying their mobile phone with them while shopping.

The key to placing beacons inside a supermarket

You can leverage existing newspaper ads by putting beacons at the shelf for items currently being promoted in newspapers. This is consistent with Mike Clifford's advice to make a practical delivery of a coupon they are familiar with but thru a digital delivery to a more modern device like a smart phone.

The store depicted above had 679 items with paper coupons at the shelf. It will be more efficient to place beacons on shelves where multiple items have deals on them rather than just one item. The store above had 80 instances of 3 to 5 or more promoted items within 8-12 linear feet of shelf space of each other. This is a logical starting point for beacon placement.

The next step is to drop the poorest performing deal clusters. A simple stack ranking using, for instance, the formula below would identify those beacons to be pruned.

 

This step would produce the greatest yield of revenue impact for the least cost of beacon deployment.

Next: Exploit known cross selling opportunities

Merchants know cross selling opportunities within their department and between adjacent departments. For instance: hair conditioner near shampoo or drier sheets with washing machine detergent. Merchants want their vendors to succeed, but merely cannibalizing one vendor's product for another doesn't move the needle of comp store sales. CPG companies have divisions of products and cross selling opportunities abound between divisions and within divisions. Shoppers may forget to buy the obvious companion product and the store sales person isn't there at the first moment of truth

Conduct a workshop with merchants to identify the cross sell opportunities within a department or between two departments. Then create algorithms that trigger push notifications to the shopper. Shoppers will see the value of these since it might save them a second trip to the store. 

This is a missing link for many brick and mortar retailers and could lead to an acceleration of comparable store sales growth. We mentioned a dramatic example of this in another blog post titled How iBeacons can make a more relevant and personalized shopping experience. 

Conclusion: This approach helps the loyal shopper who gathers paper coupons, but would prefer a way to get deals without the hassle of cutting and saving coupons in her purse. This approach appeals to the Millennial persona who is never without their smart phone. Lastly, this approach appeals to the shopper who loves recommendations from Netflix or Amazon and would welcome recommendations that are relevant to the purpose of their trip.