After Two Years Of Beacons, Where’s The ROI Metric?
Major retail adoption is clear — but knowing whether these Bluetooth devices drives 'results' is still episodic.
Beacon installations are expected to grow by 287 percent (CAGR) to nearly 4.5 million over the next three years, according to BI Intelligence estimates. But knowing how to measure the successful use of beacons when it comes to generating sales is still an inexact science, panelists at last week’s LBMA Retail Loco conference suggested.
The panel, moderated by Kwolia’s Anne Marie Stephen as part of the two-day Chicago event, explored the value of beacons as well as implementation strategies.
While the panelists, including Gimbal’s Alan Simkowski, Swirl’s John Sharry, United Airlines’ Jeff Ulrich, and ShopperTrak’s Sampo Parkkinen all offered various ways of suggesting a framework for developing beacon “success metrics,” Julia Farina, senior product marketing manager for HP-owned enterprise IT services provider Aruba Networks, offered an example of work done on behalf of client Levi’s Stadium in Santa Clara as larger way of showing the potential benefits of beacons.
“The new Levi’s Stadium in Santa Clara is outfitted with 1,000 of our beacons, along with our mobile app platform to infuse the venue’s app with indoor positioning so that you can get to your section, you can find services and amenities, you can order food and beverages from your seat,” Farina said. “You might not think of a stadium as ‘retail,’ but like an airport, it can also be considered something like a mall.”
Within 7 months of launching this app, Levi’s had over 183,000 new user signups in their marketing/loyalty database as well as a 30 percent adoption rate — “considering that the industry average is under 5 percent, that’s pretty incredible,” Farina said. And in the absence of a dedicated measurement for beacons, Farina suggested that dollars are what ultimately count.
“[Levi’s Stadium] had a $1.25 million increase in revenue from in-app purchases,” she said. “All of a sudden, this device is now a point-of-sale mechanism for fans and consumers.”
For most brands, though, the idea of “beacon metrics” is still a nascent concept, as evidenced by the fairly sudden (this past year at least) installation of beacon programs at department store chains such as Macy’s and Target.
For marketers that do want some sort of proof that beacons can deliver dollars on top of engagement, they’ll just have to evaluate individual proximity marketing players like Shopkick, which last month claimed to have driven 33 million store visits this year and was on track to produce $800 million to $1 billion in sales for its retail and brand partners in 2015 — up from $1 billion in the previous four years combined.
Age of Exploration
Part of the reason for developing any sort of standard measurement for beacon results is that the reasons for using them tend to vary widely. Earlier this year, United Airlines began testing beacons at its Newark Airport terminal. As Ulrich, senior manager of eCommerce Digital Innovation at United, told the Retail Loco attendees, the airline was clear about what it didn’t want from its location marketing program.
“The last thing I want to hear about — and the last thing I want to do — is hear about how great it is to send a 50-cent Starbuck’s coupon to someone walking past a store,” Ulrich said. “We wanted to look at it from an operational standpoint: ‘What could beacons do if we knew where a customer is in the airport and enhance the customer service?’”
The promise of beacons to Ulrich and his team was promising because they knew so much about their customers — they just couldn’t connect that knowledge to specific places within a terminal.
“Airports have historically been these huge ‘black boxes,’” Ulrich continued. “We know you bought a ticket from us, we know you checked in, but we have no idea where you are until you’ve been scanned to board your plane.”
The decision to combine indoor mapping was part of a “proof of concept” test in Newark. United mapped the inside of Terminal C with 100 beacons to signal points of interest. So if a United app user opens the map on their phone, they get a “blue dot experience” and can be told where the nearest restaurant is and how far they are from their gate.
“It’s not about giving us information, it’s about giving the customer information,” Ulrich said. But we would like to build out the capability to know if people are approaching the gate once the airplane is boarding and we’re missing two customers. If I know they made it through security and they’re two gates over, we can signal to them that their spots are safe on the plane.”
“No more running on the tarmac,” said Stephen.
“That’s the beginning of what we hope to do,” Ulrich said.
No Silver Bullet
Aside from exploring the promises and problems associated with beacons, the panelists also sought to address the current hype around beacons.
“It’s naïve to think there is one silver bullet that can solve all your marketing issues,” said Sharry, who serves as director of Sales, Enterprise Retail at Swirl. “I would agree that retailers don’t need another way to send out coupons. Ultimately, figuring out the right plan and determining the best results requires brand involvement. In the end, the ability to serve the right message to the right person at the right time is not about one channel; it takes many channels and often, more than one partner.”
Aruba’s Farina agreed. “We’re seeing great things happening when beacons are integrated with larger systems,” she said. “That’s when you start to see more of the magic.”
To find the best success metrics for a beacon program at this point in time, Gimbal’s Simkowski said it all starts with having a sense of where the entire shopper journey begins and ends.
“The information about the shopper journey can come from a number of sources,” said Simkowski, Gimbal’s VP for Business Development. “For example, Shazam is a partner of ours that has 100 million users a month. You’re not always going to have that kind of scale, so you have to adjust according to what you do have. It’s a balance. When planning the implementation, you have to ask the right questions, and in some cases, change the conversation: is an native ad more important than being able to reward people based on location? Our message is simply to take it a step further and have it align with location.”