“From welcoming people as they arrive at a sporting event to providing information about a nearby museum exhibit, iBeacon opens a new world of possibilities for location awareness, and countless opportunities for interactivity between iOS devices and iBeacon hardware.”

This is Apple’s opening gambit in promoting iBeacon. As with most developments in the payment industry, the Cupertino giant is at the cutting edge.

Customer tracking technology is in its infancy, but is fast becoming a critical part of any retailer’s business strategy. In short, it’s all about customer engagement.

Beacons – such as the iBeacon introduced with iOS 7 in June 2013 – are typically Bluetooth Low Energy (BLE)-powered, low-cost transmitters that interact with other nearby devices/services.

Why is BLE important? BLE is the signal emitted by beacons, and it’s important for three reasons. First, BLE transmits radio waves, just like Wi-Fi or mobile/cell phones, but BLE’s simpler modulation means less disruption. Disrupted signals are useless to a retailer trying to connect, stay in touch, and interact with a prospective customer. Second, BLE consumes only a fraction of the battery power that classic Bluetooth does. Third, BLE requires potential customers to opt-in to its service. This is crucial from a marketing point of view for retailers. User privacy is key and so BLE is popular as it requires the potential customer to opt-in, unlike Wi-Fi which is automatic: no permission is given. Smartphone users need to disable Wi-Fi connectivity to opt-out, an annoyance for potential customers.

Those ‘Black Friday’ push notifications

The use of beacons has quickly evolved into a potential saviour for brick-and-mortar stores. During the ‘Black Friday’ sales extravaganza, millions of in-store customers throughout the U.S. would have received push notifications on the numerous deals in their vicinity.

American Eagle outfitters installed beacons in 100 stores and they were amazed by their success.

“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. We were trying to find out, rather than using push messaging, is there something else we could do that would provide a small value? Could we nudge someone to do something in the store?” said Joe Megibow, chief digital officer at American Eagle Outfitters in San Francisco.

So, beacons have to bring something of value to the shopping experience and customers have to opt-in: and the results of American Eagle’s beacon experiment?

“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.”

Recent data collected by Swirl Networks from the company’s beacon deployments in recent months shows that beacons are influencing the way we shop. More than half of customers are engaging with the feature and many are also redeeming beacon offers when making purchases.

Swirl’s data found that beacon marketing campaigns are now influencing shopper behavior:

  • 73 percent of shoppers surveyed said that beacon-triggered content and offers increased their likelihood to purchase during their store visit.
  • 61 percent said they would do more holiday shopping at stores that delivered mobile content and offers while they shop.
  • 61 percent said they would visit a store with beacon marketing campaigns more often.
  • 60 percent said they would buy more as a result of receiving beacon-triggered marketing messages.

Beacons are now shining a light on the future of shopping at physical locations. It goes a little something like this: a customer meanders through stores (after being enticed inside via a push notification), then they receive additional iPhone/smartphone push notifications of a ‘30% off’ sale two aisles down. Once they have satisfied their shopping appetite they pay with a tap of their new iPhone/smartphone. Simplicity, just what customers and retailers want.

Analytics for the brick-and-mortar retailer

The real attractiveness of beacons is that they bring the analytics of online commerce to the brick-and-mortar store. Once a customer opts-in then the data collected is priceless for a retailer.

Opt-in is crucial as trust between retailer and customer is key. The onus is on the potential customer to allow the beacon service to track their movements in-store, therefore allowing the retailer to notify them of deals in their vicinity. If they opt-in they have to see value in return.

The value comes in providing information on in-store offers, how to make a purchase, or whether a certain product is about to sell out. These are all value added services for the customer, it makes their visit to the store easier and allows them to build a relationship of trust with the retailer.

New tech with high customer awareness

Good news for retailers: customers are already au fait with this new technology. U.S. research carried out in October 2014 by Placecast found that more than half (52%) of the 2,066 respondents said they were aware of in-store beacons, and 15 percent have engaged with them. This is quite an understanding of a technology that is still in its infancy.

“We are all now assuming that there is technology in stores that can connect with our phones — whether it’s opening an app or getting a push notification. But the real art lies in delivering timely and useful ads and offers, not overwhelming the consumer, and making sure the promotions are targeted accurately,” said Placecast CEO Alistair Goodman.

A recent Gartner report into e-commerce trends predicts that by 2018, 70% of e-commerce will move from business-to-customer (B2C) and business-to-business (B2B) models to models that focus on the individual customer experience. By 2018, organizations that have fully invested in all types of online personalization will outsell companies that have not by more than 30%.

Engage with, and optimize, the customer experience: this strategy will lead to increased revenue opportunities as a trusting relationship grows between retailer and customer. This approach links in with an omni-channel strategy: the confluence of mobile, cloud, social, and big data.

As already stated, beacon technology is now enabling retailers to bring online analytics to the in-store habits of their customers.

As the Gartner report advocates, “In increasingly hybrid application environments (licensed software, SaaS and cloud services), “how” vendors deliver their service is becoming almost as important as “what” they deliver.” This is precisely where Aviso comes in with our Novate/VAS offering.

Aviso’s Novate/Value Added Services

Retail payments is a rapidly-changing environment. Hot on the heels of the EMV standard came the PCI regulations and now retailers are grappling with point-to-point encryption (P2PE), self check-out, tokenization, mPOS, NFC, contactless cards and a number of other technological initiatives.

Here at Aviso we understand that retailers need a helping hand to scale this mountain of regulation, encryption, standards, and innovation.

Aviso’s Novate product offers simple technology that is easily integrated with a customer’s existing payment platform. In essence, it is a single cost-effective solution to all payment needs.

Beacon technology is fast becoming a must-have value added service (VAS) for retailers. Here at Aviso we are acutely aware of the potential that these services offer to our clients.

Fostering a long-term relationship with your customer should be a key part of any strategy and beacon technology enables, and indeed enhances, this approach.

Novate/VAS connects your payment system to value-added service providers – helping you profit from your payment system. It provides a flexible interface that can be used to enable merchants to offer sophisticated value added services to their customers, as well as giving value added services providers a single point of access to large numbers of merchants.

In addition, a Novate customer (retailer or acquirer) can combine multiple value added services for the same transaction. The routing system will allow you to prioritise the sequence of services and also which services apply to any particular transaction. What’s most exciting is that Novate enables multi-party settlement flows, so that providers of special offers can be included as part of an overall merchant settlement process. For example, if a company wishes to promote its brand in a merchant’s store by offering a discount, Novate can settle the merchant discounted amount while debiting the brand.

Here is a selection of additional features incorporated into Novate/VAS:

Rules based routing table

Flexible routing within Novate allows transactions to be routed to a range of endpoints.

Omni-channel

Novate’s ability to manage transactions from any channel enables it to provide ubiquitous service across all channels.

Integrates with many types of services

Flexible interfacing makes it easy to connect to a wide range of service providers such as DCC, loyalty schemes, gift-cards, e-vouchers and mobile top-up.

Manages real-time & batch processing

In addition to managing the real-time processing, Novate can also provide any file extracts required.

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