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-tos 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 atResource, 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 Apples iBeacon and Wi-Fi tracking a consumers 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 isnt 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 dont need diapers or you just bought them thats becoming spam, he said.

I think one of the big changes that were going to see, especially in the store, is how do you add relevance to that communication?

Changing built-in behavior
Mobiles 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 doesnt help me save right on the spot, Im 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 giants 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 its a really simple execution where youre not expecting them to do a lot of different things, Booz Digitals Mr. Egol said.

[For example,] here we have a meal solution and download the coupons to your shopping cart that youre going to use its the equivalent of a coupon tear sheet, he said.

Youre skiing downhill in terms of the behavior you want. People know how to get offers when theyre shopping.

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

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