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Beacons put a dent in CPG brands' in-store strategies


An in-store offer from a beacon

While consumer packaged goods brands continue to bet on mobile to connect more directly with consumers, new technologies such as beacons will not make it any easier for brands to reach in-store shoppers unless they partner with retailers.

Both retailers and CPG brands want access to consumers while they are in-store with retailers fueling some of the technology and CPG brands bringing in consumer insight. At the same time though, CPG brands are beginning to establish closer one-on-one relationships with consumers that do not rely on retailers, which could wane down with the growing interest in beacons and in-store technologies.

“Consumers can get deeper information, how-to’s just by interacting with the Beacon, but to me, right now, it is still the year for retailers to start testing and learning about this technology and behavior,” said Derrick Lin, brand strategist at Resource, Columbus, OH.

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“Probably right now [in the] short-term, partnering with retailers is the way to go [for CPG brands],” he said.

In-store challenge
Even though beacons and in-store technology are a hot topic in mobile right now, the interest is primarily coming from retailers themselves who already have comprehensive mobile strategies and in-store marketing programs.

CPG brands have increasingly ramped up their mobile strategies, but are slightly newer to use the medium than retailers and therefore may lack some of the assets needed to create compelling in-store experiences on their own.

Take mobile apps, for example.

In-store technology can be triggered through several tactics including SMS, mobile Web and apps, but apps are a common activator that grocery chains such as Safeway and Giant Eagle are already using (see story). 

Certain CPG brands including Kraft and Procter & Gamble have developed some interesting apps, but struggle in driving day-to-day utility. 

Therefore, some experts believe that CPG brands are not ready to fully embrace beacon and in-store technology without the support of a retailer due to labor and capital investments.

“I think a lot of the more complicated things like handhelds or kiosks are capital intensive, they expect you to engage in some new behavior that you have to learn, and while they can add a lot of value, the cost and the adoption rates make it hard to get a really good ROI out of those investments, especially when you can just focus on the smartphone and the experience,” said Matthew Egol, partner at Booz Digital, New York.

“I think these capital-light, cloud-based, smartphone-based solutions are going to do much better than putting a lot of capital into the store,” he said.

“Why would you invest in all this specialized stuff that requires a lot of investment and a lot of changed behavior?”

Alternative forms of in-store tracking
Beacons and other forms of location-based technologies have garnered some significant interest from retailers to bring another level of engagement to consumers who are fixated on their mobile devices in-store.

As this interest grows, so do privacy concerns around Apple’s iBeacon and Wi-Fi tracking a consumer’s every move inside the store (see story). 

At the same time, some marketers are working around the privacy concerns of tracking in-store shoppers with even newer forms of technology.

Light bulb manufacturer Philips, for example, is piloting a light-based service in European retailers. Consumers can download a stand-alone app, which works with the in-store LED lights to serve consumers offers throughout the store. 

Philips' in-store mobile app

This focus on owning the in-store experience through location could be appealing for retailers since they are able to control all parts of the experience, but misses out on some of the additional insight that CPG brands are interested in, such as past purchase behavior and customized product recommendations.

“Everyone is excited about beacons and location in the store, but the location alone isn’t enough to truly engage a consumer,” said John Caron, vice president of marketing at Catalina, St. Petersburg, FL.

“If you walk by an end cap that has diapers on it, and every person who walks by gets pushed a message that says, ‘diapers,’ if you don’t need diapers or you just bought them that’s becoming spam,” he said.

“I think one of the big changes that we’re going to see, especially in the store, is how do you add relevance to that communication?”

Changing built-in behavior
Mobile’s promise to make on-shelf CPG marketing more interactive has been sluggish to take off since the challenge is still around grabbing the attention of a consumer who has already made a brand decision before coming into a store. 

The challenge for CPG brands using mobile in-store is that marketing has to change a fundamental behavior.

On-shelf marketing in particular has traditionally been a struggle because consumers likely already know what they are looking for and are loyal to one brand.

Additionally, search makes up the bulk of what consumers are doing on their mobile devices in-store versus scanning a QR code, downloading an application or texting into a promotion that is promoted on a shelf.

If a consumer does take the time to scan a QR code, often the experience does not match the same on-shelf marketing message or takes too long to load with bad cellular connections. 

Consumers also increasingly expect to redeem an offer while in the store, so it is imperative that marketers cut down the number of steps required to download content to the bare minimum.

“We know that the top behavior for moms and CPG shoppers are the deal coupons, so if your action doesn’t help me save right on the spot, I’m not going to use it,” Resource's Mr. Lin said.

On the other hand, a text-to-win campaign or reward programs can be effective for on-shelf marketing if the call-to-action is simple and straightforward.

For example, Coca-Cola teamed up with Family Dollar with a campaign that activated the soda giant’s My Coke Rewards loyalty program. Consumers could access social and digital content after leaving the store, which helped build engagement.

Dannon also recently ran a text-to-win campaign in grocery stores that targeted Hispanic families (see story).

Dannon's on-shelf campaign

Additionally, alcohol brands including Diageo, Anheuser-Busch and SABMiller are leveraging mobile content, sweepstakes and contests in-store to launch products.

“I think what works best is if it’s a really simple execution where you’re not expecting them to do a lot of different things,” Booz Digital’s Mr. Egol said.

“[For example,] here we have a meal solution and download the coupons to your shopping cart that you’re going to use — it’s the equivalent of a coupon tear sheet,” he said.

“You’re skiing downhill in terms of the behavior you want. People know how to get offers when they’re shopping.”

Final Take
Lauren Johnson is associate reporter on Mobile Marketer, New York

Lauren Johnson is associate reporter on Mobile Marketer. Reach her at lauren@mobilemarketer.com.

Related content: Software and technology, mobile, mobile marketing, Matthew Egol, Booz Digital

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Comments on "Beacons put a dent in CPG brands' in-store strategies"

  1. frank viljoen says:

    February 28, 2014 at 5:55am

    Moms and CPG consumers are certainly always looking for a deal, however at the same time, they certainly don't appreciate spam. There does need to be a collaboration and investment between the retailer and the CPG brands, and this is where they can begin incentivising the consumer based on their shopping habits. With technology everchanging almost as fast as consumer habits, money will need to be spent in store, but this is where the CPG brands and Retailers need to understand exactly which method will be embraced by the consumer. Get it wrong and that will be a bad investment!If you want the consumer to remain loyal, they need reason, ie incentives and good ones. Along with all the other mobile interactions of downloading Apps, messages etc, the shopper is not going to waste time on shelf edge interactions, least of all in a busy supermarket.There is one place where shoppers inevitably have to go no matter which brand they are looking for, and that is the checkout. There is also usually a fair bit of dwell time around this area  not that anyone in marketing needs reminding. This is where the brands can take advantage of capturing their loyal consumers attention and delivering incentives towards their current or next shop. The way in which consumers choose to interact depends entirely on which OS they are using. If one OS decides to use Pull, and another Push, that is irrelevant. Its down to the consumer how they ultimately choose to interact. With Push being Beacons and Pull being NFC, it will be the UX that determines which OS will attract more users.Brands depend a lot on loyalty, but do they actually know who their customers are, and how often they repeat their purchase? My guess is that they do not know their individual customer least of all their personal shopping habits. If brands create loyalty schemes along with incentives, such as your local coffee shop, they would be able to monitor the consumer habits a whole lot closer, and at the same time direct incentives specific to the client which can then be redeemed instore. Advertisers too can take advantage of targeting consumers by offering incentives in and around the town, in magazines, newspapers etc, and these incentives could all be  stored in the Brands App on the smartphone to be redeemed instore.
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