Photo by J. Nalder.
The Hudson’s Bay Company (HBC) has recently deployed a beacon marketing platform, powered by Swirl, in two Toronto HBC department store locations: one in the Yorkdale shopping mall and one in their flagship downtown location on Queen Street West. Retail Category Consultants visited both locations and tested the beacon technology with HBC’s shopping app to assess its user-friendliness, and its value-add to customers.
How Do Beacons Work?
Swirl’s beacon platform leverages Apple’s iBeacon technology, which uses Bluetooth to track a customer’s location in a specific iBeacon compatible store. After installing the retailer’s shopping app on their smartphone and opting in to receive offers, customers’ phones are notified when there is a beacon nearby, and receive offers specific to the department they’re browsing as they walk down aisles.
Beacons are placed all around the store so that shoppers need to walk through the entire store to ensure that they have been offered all possible sales deals. Since beacons are able to track consumer data, the real value for retailers is the ability to track customers’ purchasing patterns and offer real-time personalized deals, especially since the routes customers take to reach all the deals are unpredictable.
Our Experience With HBC’s Beacon Technology
RCC first visited the Bay’s Queen Street West location to test their beacon technology. When we entered the store, a message appeared on our phone offering a discount on men’s cologne, which was appropriate because we were in that section of the store. As we walked through the remainder of the store, we received more notifications that beacons were close by. When we reached the beacon locations, however, no deals popped up.
We then tested the app at the Yorkdale mall location. Unfortunately, the app didn’t work as well. After speaking to the store manager, he notified us that there were only four beacons placed on each floor, and the large floor plan of the store made it difficult to find all the beacons. Ultimately, we had to search through the store and came up empty handed.
Where HBC’s Beacon Marketing Needs to Improve
Since beacons are new technology, retailers looking to deploy it in their stores must train all sales associates to understand how to use the app and how to address customer questions and concerns. After asking a number of associates for help with the app, only one manager was able to answer our questions.
The installation of beacons was also incomplete. We walked around several clothing racks where beacons had been installed but received no deals or product information on our phone via the app; this felt like a letdown. While the app did notify us that there was a beacon nearby, we either couldn’t find it or nothing appeared when we placed our phone beside it. Furthermore, in order to receive a deal, the customer must have her phone in their hand for the entire shopping trip, because there is no vibration or notification to alert her of a deal if she were to leave the phone in her pocket or purse. This does not make for a convenient customer experience.
Beacon marketing has significant potential. It is the gateway to personalized marketing, because it connects shoppers with relevant and timely offers, It also has the potential to increase basket size by enticing customers to walk through the entire store.
However, as RCC has written about time and again, the devil is in the details. We were disappointed that yet again, another large retailer did not appear to have their new technology sufficiently user-tested. It will also be interesting to watch how—or whether—offers become more customized as the data becomes more granular. As one of the first major retail chains to launch beacons, HBC had a huge competitive advantage with this deployment, but missed the mark on several fronts, including app performance and associate training.