Proximity technology alone won’t transform retail—it must be used to address customer need in the digital age.
Proximity technology is a class of emerging technologies (which includes iBeacon, NFC, RFID and a host of others) that enable marketers to pinpoint the location of a customer at a particular point in time. Although proximity technology holds vast potential for marketers, it raises some legitimate concerns as well. Probably the most famous (or infamous) example of the dark side of proximity marketing was in the movie “Minority Report,” which depicted a world where people are under constant surveillance, allowing governments and businesses to track people continuously via retina scanners. In this futuristic landscape, digital billboards identify customers as they pass by and speak to them with highly personalized marketing messages: “Hello Mr. Yakimoto, welcome back to the Gap. How did those tank tops work out for you?”
Fortunately for us, ubiquitous, government-controlled retina scanners don’t exist in the real world. But, an even more powerful and pervasive tracking device does — the smartphone. When paired with proximity technology, the smartphone provides all the computational horsepower necessary to create sci-fi-inspired personalized marketing experiences, experiences that truly add value for the customer rather than creating a dystopian landscape. So if that’s the case, why hasn’t proximity technology transformed retail?
Indeed, proximity technology is at a critical inflection point. Right now retailers are dipping their toes in the water. Most are focused on experimentation, and retailers are still learning the benefits and limitations of the technology. This tentative approach, though, hasn’t created the disruption retailers have been hoping for — a transformation that will lure online shoppers back to the store. Installing iBeacons in a few stores won’t by itself change macro consumer trends. Nonetheless, the question is still hanging out there: Will proximity technology truly enhance retail ROI? Or is it another technology fad that will fail to live up to its promise?
It is too early to tell for sure, but the evidence still strongly suggests that creating a personalized, in-store, digital experience will benefit retail significantly. According to a PricewaterhouseCoopers study, the majority of shoppers in every tracked category, ranging from toys and electronics to clothing, conduct research online before making a retail purchase. What if retail locations could give customers the same level of personalization they receive online?