The challenges that today’s retailers face for building revenue and profitability are widely and vigorously discussed; however, the solutions have remained elusive in recent years.
- E-commerce continues to leech sales from traditional retail stores.
- Growing numbers of retailers have downsized or disappeared entirely.
- Reliance on free standing inserts and paper coupons remains, but today’s shoppers view them as increasingly impractical.
In contrast, when shoppers buy online, retailers know who they are and provide highly personalized offers. Shoppers have easy access to ratings and reviews about products that interest them, and can instantly determine whether the product they hope to buy is in stock and available.
It’s clear that a bold response is needed by physical retailers. The following chart asks the question, which of these would you miss the most?
The responses highlight the fundamental challenge and – if you look closely – the most viable solution for physical retail.
Over the next 10 years, the predominant segment of shoppers (today ages 16-44) will use smartphones or go online and, secondarily, watch television for product and shopping information. They won’t much miss newspapers and magazines or the radio.
Smart beacons make store aisles digitally interactive.
To weave mobile and brick-and-mortar together, a new technology strives to make the retail shelf more interactive and engaging – smart beacons, such as Apple’s iBeacon. Smart beacons at the retail shelf that communicate with smartphones are ready for prime time based on their ability to deliver relevant information and opportunities to shoppers, including:
- Deals on product shoppers are interested in at the shelf. Think of this as a second screen for circulars and coupons – presented on the smartphone.
- Ratings and reviews curated for quality and delivered to shoppers while they are looking at the products they are considering.
- Personalization and suggestions for additional products that have relevance to the purpose of their shopping trips.
From the shopper’s viewpoint, this delivers the best of both online and physical store capabilities. Younger shoppers trust the ratings and reviews from social media and, when also presented with timely, relevant deals, will be far more disposed to convert to buying.
CPGs will in turn gain access to an entirely new channel – physical stores – and a productive way to redirect ad spend to the in-store mobile medium.
You can see the mismatch in ad spending we highlighted in a previous Blog post, specifically the shortfall of spending in mobile that exists today of $20 Billion. CPGs have simply not had an easy, measurable way to reach the shopper at the shelf, making it hard to correct the imbalance… until now. To see how this works live at the landmark Tarrytown Pharmacy in Austin, click here.
Retailers will benefit from this innovation in multiple ways. They will give the shopper improved pricing transparency, personalized offers augmented by curated ratings and reviews from a leading, reputable source. In addition, retailers will benefit from category growth, higher conversion rates to buying and a shopping experience that is superior to that of retailers without a smart beacon solution delivering deals at the shelf.
They will need to adhere to best practices: Be light on push and heavy on letting the shopper “pull” deals off the shelf. Over time, data analytics offer the ability to test A/B splits on deals and effectiveness of product placement on the smartphone.
At the end of the day, this technology will usher in a new era of shopping that delivers extraordinary new benefits to consumers, brands, and retailers.
We previously published this as a guest Blogger on Bazaarvoice here.Bazaarvoice and Shelfbucks have partnered to incorporate reviews into smart beacon-based mobile solutions, to present deals and UGC to shoppers in the aisles via their smartphones. This solution was demonstrated May 13 and 14, 2014 at the “Shopper marketing experience” display at the Bazaarvoice Summit 2014.