Digital coupons based around location-aware delivery mechanisms like NFC (Near Field Communication), WiFi and GPS typically enjoy far higher redemption rates than those without, particularly in the form of impulse purchases.
That's one of the key findings of a Juniper Research white paper on the state of digital retail marketing, which is expected to increase from $174 billion in 2015 to $362.1 billion by 2020.
Capitalizing on Location
Based on data gleaned from more than 1,000 data points, the white paper found coupons will play an important part in the retail marketing mix, driven in part by the rise of Bluetooth beacons.
Beacon technology defines the location of a smart device using BLE (Bluetooth Low Energy or Bluetooth Smart) signals. If a consumer with an enabled smart device, is in the proximity of a beacon transmitter and has Bluetooth switched on, then companies and brands have the abilities to push pertinent content and information to that device.
Juniper Research analyst Lauren Foye, who authored the white paper, told CMSWire that beacons are notable because they provide retailers a significant way to engage customers at the time while they are shopping. Coupled with loyalty schemes and rewards, they help brick-and-mortar stores monetize customer traffic, she said.
And it's a two-way street: beacons can push media such as ads, coupons and supplementary product information as well as harvest customer data to provide more personalized experiences.
Juniper isn't the first to note the advantages. As CMSWire contributor Nimmity Zappert explained, "By using location data coupled with consumer interaction data, marketers are delivering a more engaging customer experience that truly provides value. They do this by matching micro-location technology with real-time decisioning and historical data to create a truly individualized in-store experience for shoppers, rather than just sending random offers."
Luring Customers Back to Stores
Juniper forecasts that almost 1.6 billion coupons will be delivered annually to consumers via beacon technology by 2020. This is up from just 11 million this year, as retailers seek to develop proximity marketing campaigns in and around their stores.
Foye said many brick-and-mortar retailers are intensifying efforts to get customers back into the stores. To shift them from the convenience of online shopping, they have to offer incentives like promotions and special offers, she explained.
“Loyalty schemes integrated with digital coupons appear to be particularly effective," she said.
As beacons become more sophisticated, so will the coupons customers receive, she explained. By using data collected about the customer from multiple channels, retailers will be able to offer hyper-personalized deals and offers for ever more personalized experiences.
The Ad Blocker Problem
But while almost everyone loves a bargain, not everyone likes sharing their personal data. “People are concerned it will be used in a negative fashion and worried they will be overloaded with offers," she said.
That's prompting more people to turn to ad blockers.
Research earlier this month, also from Juniper, estimated that digital publishers stand to lose more than $27 billion by 2020 as they struggle to find effective strategies to counter ad blocking.
The findings predict ad blockers will grow increasingly sophisticated over the next five years, cutting global digital advertising revenues by 10 percent by 2020.
“Ad blocking is actually having a massive impact on revenues. While we have seen that it has been happening on desktop already, it is also having an impact on mobile. A 10 percent decline is a massive number and retailers are really going to have to tackle the ad blocking issue,” Foye said.
Title image by Benjamin Child