BANGKOK: The use of in-store beacon technology to deliver location-based mobile offers can recruit new customers to the brand and category, generate sales uplift and drive cross-purchase opportunity, according to research.
In an ESOMAR paper, Shifting customer engagement in the multichannel retail era, Teeradet Dumrongbhalasitr and Vijay Balaji of dunnhumby, Thailand, outlined the impact of an iBeacon campaign undertaken in Tesco Lotus stores across the country.
Building on existing mobile applications – among the retailer's 15m Clubcard loyalty customers, 4m have downloaded the app to shop online and get promotional information – some 5,000 iBeacons were installed in stores in order to better understand how shoppers interact with push messages.
The authors reported that 8.7% of the customers who were exposed to iBeacon coupon offers took action and they spent significantly more at both retailer and brand level.
Some 45% of these shoppers were new to the brand, generating 17.6% basket spend uplift and 19.7% volume uplift, the research found.
Further, among exposed customers, there was also a 27.4% higher customer activation rate compared to customers who were not exposed.
"So, exposure to relevant offers based on location in-store works," the authors stated.
But the effects were not seen uniformly across categories. For example, health and beauty products saw the most success in recruiting new customers to the brand from outside the category.
Food and laundry, on the other hand, were more likely to see shoppers switching brands within the category.
"Linking multiple data sets from purchase behaviour, Clubcard information and location-based data could deliver personalised offers and shift customer behaviour by using mobile and innovative technologies," the authors suggested.
And while customers need help in understanding how the iBeacon offers work, in-store activation will help them achieve that.
"Breadth of offers and depth of discount [will] help customers embrace the new geo-location based communication technology," the authors argued.
Data sourced from ESOMAR; additional content by WARC staff