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UK brands proximity marketing survey


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UK brands proximity marketing survey

  1. 1. How they see the future of marketing-to-mobile in-store Brands and proximity marketing Results from the independent survey of UK brands by Vanson Bourne, January 2015
  2. 2. Introduction Proximity marketing - delivering contextual messages to in-store smartphones and gathering insights from the data the interactions produce - is going to have a significant impact on retail, leisure and hospitality marketing, to name but three sectors. So says anyone with the words ‘mobile’ or ‘futurologist’ in their job title. But what do the people who are expected to implement it, the brand managers, the people with the problems to solve and budgets to spread thinly, have to say? That’s what we set off to discover when we commissioned independent research company Vanson Bourne to ask brand managers in 100 significantly-sized UK brands what they thought of the technology. What they came back with, frankly, shocked us. From our own conversations with brands we knew that they were very interested in the benefits the tech brings. What we didn’t really expect was exactly how keen they were. As you will see from the data collected here, the overwhelming majority of brands surveyed are looking to implement proximity marketing. In fact only 1 person in the whole hundred wasn’t interested. Maybe we got lucky with the sample size? Maybe Vanson Bourne’s questions were very cleverly phrased. In both cases I don’t think that’s what’s happening here. I think, in a sign of just how quickly brands are realising the importance of mobile to consumers, they are determined not to lose competitive advantage to a rival brand who will, in their eyes and backed up by the survey, almost certainly will be benefiting from the technology. What the survey tells us, more than anything else, is that brands are not just ready to embrace the technology, they are doing so right now. Ian Malone CEO Airspace January 2015 Brands and proximity marketing 2
  3. 3. %! The survey was conducted in January 2015, in the United Kingdom, by Vanson Bourne, an independent research company who specialise in technology industry research. The survey is an independent study which surveyed 100 marketing and brand decision makers from organisations in the retail, hospitality and leisure industries with at least 500 employees in the UK. 3 Brands and proximity marketing
  4. 4. ADOPTION Who will adopt the technology and how quickly?
  5. 5. 99% of UK marketing and brand managers surveyed are going to invest in proximity marketing From Airspace’s own, direct conversations with brand and marketing managers we know that, overall, their attitudes towards proximity marketing are positive – the benefits for both consumer and brand are so clear there is little reason not to think this is going to be a very effective channel – but even we, as proximity marketing specialists, were quite staggered by just how many of the respondents were looking to adopt the channel. Just 1% of the retail, hospitality and leisure brands weren’t looking to invest at any stage (it was a leisure brand, in case you were wondering). Of the positive respondents, there are interesting geographical differences. In Yorkshire and The Humber, for example 67% had already implemented proximity whereas that figure dropped to 24% in London, although a much larger percentage in London were actually in the process of investing. Northern Ireland was the only region that hadn’t either already or was in the process of investing in proximity and Wales was the region that has embraced the technology the most, with 100% of respondents saying they had either already invested or were currently doing so. The time is now
  6. 6. 79% of UK marketing and brand managers surveyed have already or are in the process of investing in proximity marketing. 28% of the brands surveyed have already invested in proximity marketing in one form or another. 51% are currently in the process of investing the the channel. As we’ll see from other questions in the survey, it’s not just the sheer volume of respondents answering positively but the fact that they are acting immediately. This implies that proximity marketing is well-and- truly on it’s way to becoming an established channel in the marketing mix. It’s no longer a case of ‘if’ but ‘when’ a brand adds proximity to its shopper engagement strategy. Even clearer, as seen from the graphic, any brand that isn’t committed to engaging consumers in- store and in-venue is going to be in the minority and is very likely to lose out to their competitor’s advantage. The time is nowThe time is now
  7. 7. 79% of UK marketing and brand managers surveyed are either already investing or looking to invest in proximity marketing in the next six months. When is key. The last to invest will be the biggest losers as, like with any new technology, there are insights to be made and processes to optimise before campaigns deliver the best ROI. 22% of respondents were looking to invest within 3 months. 57% were looking to invest between 3 and 6 months, with the average amount of time they would ideally be looking to invest coming in at 4 months. 10% will be investing in 6-12 months. The larger companies, those with more than 3000 employees, are slightly more likely to invest within 6 months (77%) whereas of the smaller sized 500-1000 employee companies 71% were investing within that timescale. The retail sector is most eager, with 80% of brands ready to invest within 6 months and of that 24% investing within 3 months. The hospitality industry is dragging its heals slightly; although 78% will invest within 6 months, it’s all within a 3-6 month period. Another 17% in hospitality will deploy within the year. Only 2% of respondents hadn’t put a date on investment. The time is nowThe time is now
  8. 8. 79% of the UK marketing and brand managers surveyed are either already investing or looking to invest in proximity marketing in the next six months. The time is nowThe time is now 8% 22% 57% 10% 1% 0% 2% Would ideally already have implemented it 0-3 months 3-6 months 6-12 months 12-24 months Longer than 24 months Not sure
  9. 9. IMMEDIATE ENGAGEMENT What stands out for brand and marketing managers?
  10. 10. The time is nowReal-time interaction of respondents think the ability to drive footfall is an important benefit of proximity marketing Driving footfall is just one benefit of proximity marketing, but it’s a benefit that the respondents rated very highly. The ability to draw nearby traffic into store, using techniques including geo-fencing, was given a rating from 1 to 9, with 9 being ‘very important’. 66% scored this capability as rating a 7 or higher and another 12% thinking it was more important than not. Interestingly, the larger the business (by number of employees) the more importance was given to driving footfall. For companies with more than 3000 employees, the percentage rating 7 or higher rose to 77% and overall 98% of this group believed it was more important than not. By industry, the retailers seem most keen to benefit with 92% feeling it’s an important benefit with the leisure sector still keen, but the least enthusiastic with 81% seeing driving footfall as more important than not. Still a very high score. Regionally, the respondents outside of the London area were more likely to see driving footfall as a benefit compared to those in London.
  11. 11. The time is nowReal-time interaction of respondents reported the ability to be more timely in delivering infor mation to customers is an important benefit Context is the key to delivering relevant communications, which is why proximity marketing is so exciting for businesses with physical visitors. The ability to deliver engagement quickly when a consumer is nearby means brands can engage in activity not possible with other channels. It’s the ultimate definition of ‘in the moment’ marketing and rightly scores very highly with our group of brand and marketing professionals. 80% of respondents rated the ability to deliver timely information at least 7-out-of-9 (with 9 being ‘very important’). Only 6% felt the capability to be less important than more important. Using timely (as in nearby) engagement also scored very highly in a specific example of proximity in action: Cross promoting other products was a popular benefit, scoring 7 or more with 84% of the survey. The larger companies especially seemed to highly rate the ability to market nearby or associated products, with 90% seeing it as a key benefit.
  12. 12. NOT JUST VOUCHERS How are brands going to be using proximity?
  13. 13. The time is nowBeyond the voucher say the ability to drive loyalty with their customers is an important benefit There are many reasons to deploy proximity marketing. At these early stages of this new, hyper accurate stage of the channel it would be understandable if brands simply wished to use financial incentives, like vouchers, to convert visitors to consumers. But we are glad to report that the brand and marketing managers surveyed absolutely see the potential of the technology to do so much more. Driving loyalty, especially, was very highly rated by the group. Only 5% rated it as less than important and the vast majority scored 7/9 or more, with 9 being very important. It was the more medium sized companies (1,000 – 3,000 employees) that rated the benefit the most, with all of them seeing driving loyalty as important and a whopping 92% giving it a score of 7 or more. Loyalty was also important to the retail respondents, who score it more highly than the leisure and hospitality sectors.
  14. 14. The time is now Enhance displays or deals that already exist 32% How they see the technology being used Giveaways 47% Offering vouchers/coupons 50% Promote new displays or deals 68% Special offers 56%
  15. 15. The time is nowHow they see the technology being used Tactical campaigns that can be started and withdrawn quickly 52% Welcome back / hello again 50% Draw to specific locations 50% Draw in passers-by to enter 47% Maps or store guides 21% Invitations to special events 18%
  16. 16. DATA & INSIGHTS It’s not just about engagement:
  17. 17. The time is nowInsights to drive conversion say the ability to gather more accurate data to better understand their customers is an important benefit of proximity marketing How long has someone dwelt in a department or next to a product? Do they react to shoe offers better than dress offers? These insights are going to be vital not just for campaign planning but they are going to better inform how stores should be stocked, staffed and designed. The same level of analytics that has previously only been available from website data is now going to be available as real-time in-store analytics and it’s going to potentially revolutionise retail and leisure locations especially. This has clearly not been lost on UK marketing managers who highly rate the ability to gather more insights on the way consumers act in store. In larger companies, these insights are more valued than in the smaller companies, with just 4% feeling more accurate data was neither important or unimportant, a figure that rose to 12% of the companies in the 500-1000 employee category. Across the board, each sector was naturally very much in favour of gathering insights, although the hospitality respondents were more likely to mark this ability as very important to them.
  18. 18. The time is nowInsights to drive conversion report proximity marketing is useful for understanding which online customers also shop in- store There is an interesting conversation to be had around who owns the proximity relationship with the customer. Is it the eCommerce people, who understand digital relationships and metrics? Or is it the retail team, who know best how to effectively market in-store? Organisations need to realise that proximity delivers a new possibility; bridging the gap between digital and bricks and mortar. As such they will either need to create new roles or deeply integrate previously unconnected departments. So whilst understanding the value of connecting online browsing history with a customer in-store is obviously key, especially with larger brands where 90% of respondents think the ability is important, putting it into practice is going to be an interesting challenge as message delivery and legacy CRM systems are integrated. However, it will be worth it. The survey reveals there’s obviously an appetite for this symbiotic relationship and it’s not lost on all three industries involved. Retail brands see the most benefit with 100% agreeing that the ability to connect digital to physical is more important than not. They get it.
  19. 19. The time is nowInsights to drive conversion Say it is useful for understanding customer movement patterns around stores Much of the excitement around proximity marketing is understandably about the quality of engagement that precise location detection delivers. But many brands, Walmart in the US being a prime example, use hyper-accurate detection to learn more about their customers’ behaviour, movement patterns, product preferences and more. Until the super accuracy delivered by beacons, for example, was available, understanding in-store behaviour meant undertaking surveys, expensive monitoring equipment and more. There isn’t yet universal app engagement, so proximity marketing will only deliver a sample snapshot of what might be happening in-store, but it delivers it in real time, meaning business managers can react instantly to potential problems and opportunities. This is not lost on our respondents, with three quarters agreeing it’s going to be an important benefit. Interestingly, nearly twice as many managers in the hospitality sector gave a maximum 10/10 importance score versus the retail industry. As hotels reside in this sector, the easy assumption to make is that - knowing a guest is actually in the hotel - is going to make up-sell and cross-promotion offers more effective.
  20. 20. The time is nowProximity is the way forward 93% believe proximity marketing will add more value to their company’s marketing
  21. 21. The time is now 93% In summary It’s obvious the retail, leisure and hospital industries get the benefit of proximity marketing. It’s equally obvious that the absolute minority who don’t get it (remember the lonely guy in the first infographic?) are going to lose out to the majority that do embrace the opportunity. What we can see ahead is a blossoming of disruptive technology that will deliver benefits to both consumers and the organisations that market to them. We can see brands, who have previously struggled to get a decent return on their investment in mobile, realise that mobile could be their most effective channel. For the visiting customer, benefits don’t just come in the form of deals or offers or extra content, but from the improved store layouts or extra staff that the in- store analytics might have brought into play. For the locations, whether it’s a chain of 600 cafes or a single football stadium, the technology is going to help them learn more about what we as visitors want, how we like to ‘be’ in-store and ultimately what will make us convert a visit into a purchase. Becoming more loyal to the brand in the process. If you would like to know more about how your organisation can benefit from proximity engagement and insights, please contact us using the channels below. The full survey, including all data, may be made available upon request. Website: Email: Telephone: 00 44 (0) 7043 0718 Twitter: @airspacenetwork