This week I want to go back to beacons, this time in supermarkets. Do you like supermarket shopping? Now that I’m getting older and more mellow (yes, really!), I don’t mind it so much, but when I was younger and in even more of a race against time, I hated it. Hated it. I love cooking, I just hated the shopping. And I confess that, in spite of coming from the e-commerce world, I liked food shopping online even less, all that page navigation, and the lack of textures and shapes…
Now we have a technology that could make supermarket shopping fun, fast, and almost like a game. Beacons.
I wrote earlier about the potential of beacons in retail, and supermarkets are a subset of retail, so why the re-hash? Because the characteristics of supermarket shopping are quite different from the rest of the sector. The clients have different objectives, the logistics are a huge part of the process, and the marketing is even more challenging. Beacons are helping to change the way we shop in all retail sectors, perhaps none so obviously as with supermarkets.
It starts before you walk in the door. Almost all large supermarket chains in the US and Europe have apps for your smartphone, but most for now are limited to helping you manage your shopping list, and to sending you coupons and generic marketing messages. The precision that beacons offer, knowing exactly where you are in the store, will change that. Some chains are now experimenting with mobile platforms that link the apps to beacons (InMarket in the US with Safeway and Giant Eagle, Proximus here in Spain with Carrefour). The roll-out so far is slow, but the possibilities are very interesting indeed.
With beacons at the supermarket entrance, the store knows when you walk in, and can send you a cheery greeting and an invitation to open the app. You will probably get a couple of promotional messages (3-for-2 on crackers, welcome to our Week of the Banana), and then, perhaps, a really useful function. If the app knows your shopping list, it could plot the most efficient route through the aisles, so you could get out of there faster. And re-order your shopping list for you so you know what to pick up as you go along. Beacons and a nifty algorithm can take a huge part of the “where-do-I-find?”-related stress out of supermarket shopping.
But, obviously, the supermarkets don’t want you to get out of there faster. They want you to linger and spend more. Beacons are also changing grocery marketing. Positioned in every aisle, they know where you are, and can send you information about special offers in the aisle you’re at. If the app knows your typical shopping list, or products that you have bought in the past, it can send you coupons for products that it knows you might want to save on. Sure, you’d probably buy these products anyway, but if the store can bring forward the next purchase, its cash flow improves. And who hasn’t fallen for the “if you buy two, you get one free!” every now and then?
Beacons could allow supermarkets to encourage more time in the store in a more effective, fun way. Games, perhaps? Scan five products beginning with “c”, then go to customer service to pick up your free bar of chocolate, for instance. Or a message like “warm baguettes coming out in 10 minutes!”.
Cross selling? The supermarkets could send you dinner ideas, according to where you are, or what’s already in your basket. Say you’re standing in front of the dried pasta, and a recipe for cheese lasagna appears on your phone screen. Preparation time only 30 minutes, excellent, so you head on over to the cheese aisle to pick up the ricotta and mozzarella.
As for finding products, I would so love to know where everything on my list is! Beacons and a comprehensive directory can help with that. Customers can type in the product they’re looking for, and see on the little map on their phone screen where it is and how to get there. No more running around for half an hour looking for the self-raising flour. The supermarket where I shop in Madrid has the sugar in the coffee aisle, not with the baking goods, go figure.
Supply management can become more efficient. Beacons can send alerts to the warehouse when a shelf section is almost empty. And can help plan an efficient re-stock, according to the location, the rate of depletion and the time of day.
And beacons can tell management so much about customer behaviour once in the store. Where do they go first? How long do they linger? Where do they spend the most time? All of this information can be broken down by customer profile. And the more the chain knows about its customers, the more targeted and less intrusive are its marketing messages. Let’s face it, the supermarkets have to do marketing. And if what they know about you helps them to only send you messages that might actually save you money or time, that’s definitely preferable.
The supermarkets could also earn advertising revenue from brands. Coca-Cola, for example, could send ads directly to customers who are in their aisle, via the supermarket app. That level of targeting would be much more cost efficient for the big brands than the blanket coverage of traditional media, as people are much more likely to pick up a six-pack, even on impulse, if they are actually in the store.
It does require a significant overhaul in the supermarket chains’ software systems, but the potential cost savings are significant, and client retention is especially important in an increasingly competitive sector. Beacon use is perhaps even more appealing to small supermarket chains or even individual stores that can’t compete with the big advertising budgets of their mega-competitors, for the competitive advantage that targeted marketing can give them. Obviously the smaller stores wouldn’t need nifty functions like aisle navigation, but beacons can help to create a loyal community of coffee-lovers, or local residents. Registered clients can receive information not just on special offers but also on events (new bean tasting session! live music in the bookstore next door on Saturday!), and birthdays can be remembered (swing by for your free cup of coffee!).
The big inconvenience is physical. To really take advantage of all that beacons in supermarkets can offer, we would need to keep our phone on and in our hand the whole time, with another hand free to tap when required. As anyone who has tried to shop with small children will tell you, both hands free is a luxury that not all of us can enjoy. Now, if the supermarkets can at the same time come up with a nifty contraption that supports your phone at a comfortable height without impeding your movement radius, that would be a good marketing gimmick…