How American Eagle Outfitters provides customer value via beacons
American Eagle Outfitters, which has installed beacon technology in more than 100 locations, found that offering small, timely rewards for trying on clothes dramatically impacts behavior.
The chain was one of the first retailers to install shopBeacon technology from shopkick earlier this year, enabling users of the app to receive messages upon entering a store and as they walk around. Initial findings show that the percentage of shopkick users who visited the fitting room area to try on clothes was more than double for those who received a beacon-enabled incentive offer versus for those users that did not.
?The real challenge is what do we do with beacons,? said Joe Megibow, chief digital officer at American Eagle Outfitters, San Francisco. ?Our customers are digital natives - just merely throwing technology at them does not work.
?If we are not providing something of value to them they will opt out,? he said.
?We were trying to find out, rather than using push messaging messaging, is there something else we could do that would provide a small value. Could we nudge someone to do something in the store.?
American Eagle Outfitters ran some early test pilots with beacons at holiday last year.
More recently, it ran a test across 100 stores with more than 10,000 customers. Half of the customers who walked into a store received the normal shopkick reward points, which are known as kicks.
The other half of customers received a second message offering them an opportunity to earn an additional 25 kicks ? which translates to approximately 10 cents ? if they visited a fitting room.
The results suggest that beacons paired with an incentive can be used to encourage in-store behavior.
The American Eagle Outfitters learnings are significant because beacon technology is still so new and retailers are trying to figure out how best to use it.
The retailer plans to continue to test ways to use beacon technology to encourage shopper behavior in its stores.
For example, some locations share space with the retailer?s Aerie lingerie brand. Beacons could be used to encourage shoppers to visit the Aerie store.
The shopkick app, which rewards users for walking into participating retail locations, can be used at many leading retail locations, including Macy?s, JCPenney and Best Buy.
Beacons made a splash when they were first introduced last year because of their ability to recognize and communicate with consumers? mobile phones at a hyperlocal level.
Currently, more than 7,500 shopBeacon devices are live across 3,000 stores. According to shopkick, this makes its beacon network 20 times larger than other beacon networks.
Shopkick also reports that it has driven more than $1 billion in revenue for its partner retailers since its launch in 2010.
Pointing to how mobile shopping is gaining steam, more than half of the revenue occurred during in the past 12 months.
The app has also driven more than 50 million verified walk-ins to stores, 100 million product scans and millions of transactions.
Last month, Shopkick was acquired by SK Planet, the mobile commerce and ecommerce division of South Korea wireless network SK Telecom.
The deal is an example of the growing value of location-based shoppers services, including those built around beacon technology, as well as mobile?s significant potential to influence offline sales (see story).
Still, it is still early days for beacons and retailers are hungry for information about how consumers are engaging with them.
A Bloomingdale?s executive at the recent Mobile Shopping Summit 2014 said that beacon strategies require campaigns and education so that consumers know what to expect when they engage with the in-store technology (see story).
A recent report from Forrester suggested that retailers should resist temptations to simply push advertising messages and instead look for ways to contextualize their offerings in real-time (see story).
?We ran the test for nearly two months and what we saw was pretty amazing,? Mr. Megibow said.
?We had a beacon in the fitting room and at the front of the store,? he said. ?We knew for sure, if they came into the store, if they came into the fitting room and if they had received an offer.?
Chantal Tode is senior editor on Mobile Marketer, New York