{"id":14694,"date":"2016-11-16T17:48:38","date_gmt":"2016-11-16T22:48:38","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/bea-con-and-carry-on\/"},"modified":"2016-11-17T19:00:36","modified_gmt":"2016-11-18T00:00:36","slug":"bea-con-and-carry-on","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bea-con-and-carry-on\/","title":{"rendered":"Bea-con and Carry On"},"content":{"rendered":"<p>In late 2013 Apple announced the arrival of the \u201ciBeacon\u201d, a simple piece of technology that was accompanied by some of the greatest hyperbole that the marketing world had yet seen: \u201cBeacons are taking the world by storm\u201d <sup>[1]<\/sup> \u201cApple\u2019s iBeacon signals turning point for mobile engagement\u201d <sup>[2]<\/sup> \u201cBeacons have been generating buzz\u2026today it\u2019s catching fire\u201d <sup>[3]<\/sup> If you\u2019re reading this and are wondering when exactly your next retail experience is going to be \u201ctaken by storm\u201d, you\u2019re not alone. For reasons we&#8217;ll explore, the technology has only had very limited traction in a handful of retailers.<\/p>\n<p>A beacon is a golf ball-sized device which sends out a short-range Bluetooth signal that can be detected by smartphones. If a user walks within proximity of a beacon, the signal gets detected by the user\u2019s smartphone and triggers an app to display a message, a prompt or some other notification <sup>[4]<\/sup>. They\u2019re cheap (up to $40 each), easy to install and have battery life of up to three years <sup>[2]<\/sup><\/p>\n<p>For a retail marketer, therefore, the device becomes a solution to a number of challenges:<\/p>\n<ul>\n<li><em>Shopper data<\/em>: given that GPS signals cannot usually penetrate a bricks-and-mortar store, the beacon becomes a viable geo-locating device to allow retailers to track shopper foot traffic.<\/li>\n<li><em>Contextual marketing<\/em>: the beacon can allow the marketer to deliver personalised, targeted offers <sup>[5]<\/sup><\/li>\n<\/ul>\n<p>For Macy\u2019s, these solutions could revolutionise their business model by differentiating Macy&#8217;s via the shopping experience. Within the shopper\u2019s \u201cpath to purchase\u201d, the beacon allows the marketer to provide shopper value with\u00a0tailored, timely messages (such as a discount or a prompt from the shopper\u2019s wishlist) to prompt a purchasing decision at the crucial \u201cmoment of truth\u201d, when the shopper is in front of the fixture <sup>[6]<\/sup>. This combines the best of internet-style personalised shopping with physical in-store theatre.<\/p>\n<p>Take a look at this video to see how it works.<\/p>\n<p><sup><a href=\"https:\/\/www.youtube.com\/watch?v=c3h0eKGfUfI\">https:\/\/www.youtube.com\/watch?v=c3h0eKGfUfI<\/a> [7]<\/sup><\/p>\n<p>&nbsp;<\/p>\n<p>Let\u2019s now look at a beacon-based marketing initiative. Macy\u2019s pioneered beacon technology by deploying 4,000 beacons across its 850 stores in 2014 and then used the technology in their \u201cWalk In and Win\u201d campaign on Black Friday in 2015 <sup>[8]<\/sup>. This was a scratch-and-win game using the Macy\u2019s app; if the shopper walked into a Macy\u2019s on Black Friday, the store beacons would prompt the app to present a game which the shopper could then play for instant prizes. All the shopper had to do was follow some simple steps:<\/p>\n<p>&nbsp;<\/p>\n<p><sup><a href=\"https:\/\/youtu.be\/IVY5dZFDmys\">https:\/\/youtu.be\/IVY5dZFDmys<\/a> [9]<\/sup><\/p>\n<p>&nbsp;<\/p>\n<p>Given that engagement required a 90 second educational video, this campaign asked a lot of the shopper:<\/p>\n<ul>\n<li>Download (or update) the app<\/li>\n<li>Register with their name, address, mobile number and email<\/li>\n<li>Enable the following:\n<ul>\n<li>Push notifications<\/li>\n<li>Location services<\/li>\n<li>In store notifications<\/li>\n<\/ul>\n<\/li>\n<li>Walk into a store on Black Friday<\/li>\n<li>Turn on Bluetooth<\/li>\n<li>Play the game, potentially win<\/li>\n<\/ul>\n<p>Was it successful? Unfortunately \u201cthe ultimate results of the Walk In and Win promotion haven\u2019t been publicly shared\u201d <sup>[10]<\/sup> so we must leave the results up to our imagination. However at first glance it seems that execution of this campaign was not its strongest point. Too much commitment was required to engage. Too much personal information was required. Finally, the campaign failed to deepen a personal relationship with the shopper with any kind of tailored offering. The whole concept of personalisation was abandoned in favour of driving penetration of the Macy\u2019s app.<\/p>\n<p>So, whither beacons? The current state of play is a mixed bag: Only 23% of US retailers have satisfactorily implemented them. Another 23% have no plans to use them; the remaining 54% have some varying levels of enthusiasm. More worryingly, 52% of smartphone users have no interest in the concept or are actively concerned about privacy implications <sup>[11]<\/sup>.<\/p>\n<p>With this in mind, to integrate beacons within Macy\u2019s operating model we can consider the Product Diffusion framework for successful innovation:\u00a0<sup>[12]<\/sup><\/p>\n<ul>\n<li>Relative Advantage\n<ul>\n<li>Beacons must provide a significantly improved shopper experience versus simple browsing. Macy\u2019s must be militantly focused on personalising the messages, not just pushing out more marketing noise.<\/li>\n<\/ul>\n<\/li>\n<li>Compatibility\n<ul>\n<li>Macy\u2019s needs to ensure beacons fit seamlessly within a shopper\u2019s digital ecosystem by reducing the hassle required to engage with the experience.<\/li>\n<\/ul>\n<\/li>\n<li>Complexity\n<ul>\n<li>Macy\u2019s must ensure that privacy concerns are carefully handled. Asking for a ton of personal information up front can be perceived as \u201ccreepy\u201d.<\/li>\n<\/ul>\n<\/li>\n<li>Trialability\n<ul>\n<li>To drive shopper engagement with beacons, provide incentives to trial \u2013 perhaps a blanket discount on purchases after downloading the app.<\/li>\n<\/ul>\n<\/li>\n<li>Observability\n<ul>\n<li>Macy\u2019s should consider a way to show shoppers the benefits of engaging with the technology, perhaps by promoting word-of-mouth or via social media engagement.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>In a broader sense, this framework is a timely reminder as we enter the era of the \u201cInternet of Things\u201d: tech is the easy part, but execution is the all-important final 95% of strategy!<\/p>\n<p>&nbsp;<\/p>\n<p>(796 Words)<\/p>\n<p>&nbsp;<\/p>\n<p>[1] Chuck Martin, &#8220;How Beacons Are Changing the Shopping Experience&#8221;, <em>性视界 Business Review<\/em>, September 1, 2014, https:\/\/hbr.org\/2014\/09\/how-beacons-are-changing-the-shopping-experience, accessed November 2016.<\/p>\n<p>[2] Heather Clancy, &#8220;Apple&#8217;s iBeacon Signals Turning Point for Mobile Engagement&#8221;,\u00a0<em>Fortune<\/em>, February 28, 2014,\u00a0http:\/\/fortune.com\/2014\/02\/28\/apples-ibeacon-signals-turning-point-for-mobile-engagement\/, accessed November 2016.<\/p>\n<p>[3] H.O Maycotte, &#8220;Beacon Technology: The Where, What, Who, How and Why&#8221;,\u00a0<em>Forbes<\/em>,\u00a0\u00a0September 1, 2015, http:\/\/www.forbes.com\/sites\/homaycotte\/2015\/09\/01\/beacon-technology-the-what-who-how-why-and-where\/#635b82904fc1, accessed November 2016.<\/p>\n<p>[4] &#8220;What is iBeacon? A Guide to Beacons&#8221;,\u00a0<em>iBeacon Insider<\/em>,\u00a0http:\/\/www.ibeacon.com\/what-is-ibeacon-a-guide-to-beacons\/, accessed November 2016.<\/p>\n<p>[5] Nic Newman, &#8220;Apple iBeacon Technology Briefing&#8221;,\u00a0<em>Journal of Direct, Data and Digital Marketing Practice<\/em>, 2014. Vol. 15 No. 3, pp 222-225.<\/p>\n<p>[6] James Martin, &#8220;6 Things Marketers Need to Know About Beacons&#8221;,\u00a0<em>CIO<\/em>, February 24th, 2016, http:\/\/www.cio.com\/article\/3037354\/marketing\/6-things-marketers-need-to-know-about-beacons.html, accessed November 2016.<\/p>\n<p>[7]\u00a0https:\/\/www.youtube.com\/watch?v=c3h0eKGfUfI, accessed November 2016.<\/p>\n<p>[8] Lauryn Chamberlain, &#8220;Macy&#8217;s to Test Beacon Messages Outside App, Explore Retargeting&#8221;, <em>GeoMarketing<\/em>, March 24, 2016,\u00a0http:\/\/www.geomarketing.com\/macys-to-test-beacon-messages-outside-app-explore-retargeting, accessed November 2016.<\/p>\n<p>[9]\u00a0http:\/\/www.macys.com\/campaign\/social?campaign_id=629&amp;channel_id=1&amp;cm_mmc=VanityUrl-_-win-_-n-_-n, accessed November 2016.<\/p>\n<p>[10] Ian Riner, &#8220;When Mobile, Beacons and Games Merge: A Look at the Macy&#8217;s Case Study&#8221;,\u00a0<em>Survey Sampling International<\/em>, June 23, 2016,\u00a0http:\/\/www.surveysampling.com\/blog\/when-mobile-beacons-and-games-merge-a-look-at-the-macys-case-study\/, accessed November 2016.<\/p>\n<p>[11] &#8220;What&#8217;s Going On With Beacons?&#8221;\u00a0<em>eMarketer<\/em>, July 15, 2016,\u00a0https:\/\/www.emarketer.com\/Article\/Whats-Going-On-with-Beacons\/1014218, accessed November 2016.<\/p>\n<p>[12] Everett Rogers,\u00a0<em>Diffusion of Innovations Fourth Edition<\/em>, (New York, NY: The Free Press, 1983), pp 204-251.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Beacons took the retail world by storm in 2014, but have had limited traction over the years. In this post, we\u2019ll explore a recent execution of beacon technology in Macy\u2019s, and use it to provide a useful operating framework to show how the technology needs to be integrated to provide the best customer experience.<\/p>\n","protected":false},"author":1779,"featured_media":15024,"comment_status":"open","ping_status":"closed","template":"","categories":[2119,826,1036,168,16],"class_list":["post-14694","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-beacons","category-big-box-retailers","category-digital-retail","category-marketing","category-retail"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bea-con and Carry On - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bea-con-and-carry-on\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bea-con and Carry On - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Beacons took the retail world by storm in 2014, but have had limited traction over the years. 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