Dear Business Insider: We have the beacon fix.


BUSINESS INSIDERThe recent article “THE STORE OF THE FUTURE REPORT: The top 5 retail technologies that could fundamentally change the in-store experience about the use of Beacons” by Nancee Halpin (@nanceepansy) at Business Insider caught our eye. Ms. Halpin experienced several new technologies available at brick and mortar stores including interactive fitting rooms, interactive storefront displays, and heat mapping technology.

Her beacon experience failed to excite her:

Many major retailers have implemented beacon programs that allow them to reach consumers on their smartphones while in-store. But so far, many of these integrations are underwhelming.

How could this be? At Kocomojo, we have seen engagement rates of 60% and higher. On Facebook, the average retail brand only gets half of that. We have seen marketers and tech folks rejoice at the ease and speed that they can get their personalized beacon campaign up and running. We need to dig beyond the bullet points to see what exactly happened.

Beacons are one of the most important new consumer-facing retail technologies of the past few years. We expect that beacon-influenced sales at the top 100 retailers could reach $44 billion next year.

Well, okay, agreed. Let’s dig deeper into Ms. Halpin’s research pool.

We tested out this technology first-hand at Best Buy, Duane Reade, and American Eagle stores in the Union Square neighborhood of New York City.

  • To do so, we first had to download the Shopkick app, which all three stores use to connect with beacons.
  • Secondly, we had to ensure our Bluetooth capabilities were enabled on our mobile device prior to entering each store.

Shopkick is a five-year-old mobile app that now boasts more than 13 million users; it allows shoppers to collect “kicks,” or points, that customers can accumulate to claim prizes, including gift cards to major retailers like Macy’s and Toys ‘R’ Us, or products like tablets and designer handbags.

Okay, now we are beginning to get it! The only beacon program used was the third-party app Shopkick, where customers earn only Shopkick rewards. Then, they can trade in the “kicks” rewards in a variety of stores. In essence, you are putting all of your beacons and your brand in one big Shopkick bag.

Ms. Halpin found that Shopkick couldn’t always detect that she was in the store, the app only reached out to her on entry– and the rewards seemed empty. So, customers are interacting with Shopkick (well, when it works) not directly with a brand. In essence, the brand is loaned out. When an experience is “underwhelming” it not only creates a poor perception of Shopkick, but also on the brand that it is representing.

Nancy Halpin, why on earth would people loan their brand out to a third party?

She believes these are the main reasons: 

  • It’s easier for retailers to partner with a third-party app rather than have to implement the back-end tech infrastructure themselves.

An excellent observation, but it doesn’t have to be that way. We recognize that building valuable and rewarding consumer experiences within a brand’s app does require sophisticated back-end technology. The Kocomojo proximity marketing platform, KocoConnect solves that problem by giving retailers the tools to create their own direct beacon experiences without having to build a back-end tech infrastructure. Think of it as the WordPress of beacon technology. When brands first had blogs, they had to build their sites, some of which were uninspired and clunky. WordPress allowed brands to create great looking sites and avoid an expensive backend startup. That’s how KocoConnect works; it’s a middleware beacon solution connecting the brand to its customers.

KocoConnect is app agnostic which means it can work with any existing app. For example, Toys ‘R Us can integrate KocoConnect into their mobile app within a matter of days. This enables them to reach their customers with their own promotions, conversations, and rewards in their application– and have complete control over their brand voice.

Retailers can potentially reach more people beyond those devoted shoppers who have already downloaded and regularly use the company’s own app.

We can see an upside to that if you are a small retailer or just starting out. But the numbers don’t always match up. If someone visits Target, there is a good chance that they are using the existing store’s app already. So why make them use an app that could expose them to the competition? Further, by using a third-party app, it doesn’t let the brand speak directly in their own voice.

American Eagle and Best Buy have two different voices, by using a third party app they become the Shopkick voice.

  • Retailers assume that a loyalty app like Shopkick will be popular with consumers and give them a good reason to opt into location-based messaging.

We believe that as a brand having your app tied to your loyalty program is the way to be popular with your customers. With a well-designed app, you control your messaging and shoppers don’t have to seek out third-party coupon apps to find the greatest deals. With KocoConnect, you control the rewards you offer and can make near real-time adjustments to any promotion.

Brands are just beginning to warm up to beacons and proximity-based marketing. For the average consumer, a third-party app like Shopkick may be the most accessible way to interact… for now. Kocomojo offers solutions that will further personalize the beacon shopping experience, making it easier for brands to hold on to their identity and let consumers have a lot more fun.

Ms. Halpin, if you want to talk, feel free to ping us. We’ll show what the next generation of beacon marketing looks like.