Pull 2015: Proximity marketing - the five Ps of retail marketing

With the massive growth of digital and mobiles (over 30m smartphones in UK alone) we appear to be a world that is constantly online, all the time, says Comobi2 founder Chris Arnold ahead of the DMA's Pull 2015 event.

We spend most of our time glued to the little screen, texting, Twittering and Facebooking our daily moments of trivia to our friends to share our experiences to make us feel part of something bigger. In fact, 94% of adults now own a mobile.

There’s little doubt that mobiles have changed how we interact with our friends and the world of brands. So it is no surprise that the marketing industry has been quick to champion the mobile as the next big media opportunity.

ON-MOBILE vs OFF-MOBILE – PUSH vs PULL

Yet while we chase each and every new aspect of technology, many traditional channels like POS and outdoor, remain both highly effective and are even growing.

So brands can take two key routes, target consumer through the mobile or target the consumer through other methods to use the mobile – Push vs Pull.

While ‘push’ thinking sees the consumer as a target, ‘pull’ sees them as an empowered customer. To use an analogy, which do you prefer, a pushy sales assistant or one that is there when you need them?

The outdoor industry have heavily invested in technology, Clear Channel now have over 25,000 Adshels fitted with both NFC and QR and launched a large format digital media offering under the brand of Storm.

RETAIL SPEND – THE FACTS

Despite the many inflated claims about online purchasing, according to the Office for National Statistics, we spend around 88.5% of retail spend off line in the high street, bars, restaurants, cinemas... it’s a long list. And it is focusing on this proximity to purchasing that many brands see as the most rewarding place to spend their budgets; especially as online is getting so crowded. Why chase the 11.5% when you can chase the 88.5%?

The retail trade has adopted the 4 Ps of marketing (Product, Price, Promotion & Placement) since E. Jerome McCarthy created it in the 60’s, but now we have a 5^th – Proximity Marketing.

Proximity Marketing (also known as Proximity Mobile Marketing and Hyperlocal Marketing in the US), simply put, is all about engaging with consumers close to purchase, by utilising both traditional channels and technology.

The challenge now is not to jump on technology bandwagons but to embrace the wider range of what is available and to join the dots.

A perfect example was the BA poster that linked flight data with Storm’s Coventry House digital panel (above Piccadilly Circus). As a BA flight flew over, a kid appeared on the screen pointing and the headline identified the flight. As a great example of data meeting traditional ad thinking, it’s no surprise it won a bucket load of awards.

NFC

The use of NFC (Near Field Communications) in Adshels means that consumers can now connect immediately with a website in response to a poster. From downloads to direct purchasing, NFC provides a quick and convenient way for consumers to act on their impulses. In Australia they have really mastered the art of using NFC, and have shown how inventive it can be. In the UK it’s enormous potential for brands is still just starting to be realised.

The great potential for NFC enhanced Adshels is linking to retail, to see it as an extension of point of sale (POS), working to bring customers into the store where NFC can be further used for customers to check into their loyalty account, get information on any item in the store, compare prices, discover accessories and even order direct.

Retailers are now also putting NFC tags on their windows (like Shopdirect, Cancer Research and Dutch retailer Vic) to allow consumers to tap and connect to their online shop, receive vouchers or information.

BLE

The other technology that has caused a buzz is BLE (Bluetooth Low Energy) and Apple’s own version, the iBeacon. The approach is referred to as ‘microfencing’ because it works within specific geographic boundaries, from a small section of a store to a whole department.

The main difference between NFC and BLE is that NFC is ‘pull’ – consumers can choose to connect by tapping an NFC tag, while BLE pumps out a message that automatically opens an app on your phone and ‘pushes’ a message at you.

Both have their roles, and used well, each can create a positive benefit to both retailers and consumers, though BLE is more prone to abuse.

One smart use of BLE is for blind people, to allow them to navigate in difficult places. Similarly, NFC tags have been placed on medicine bottles to allow blind people to hear instructions and details about the medicine.

BLE is also great for environments like museums and art galleries. Sadly they are becoming popular in casinos too, encouraging people to bet as soon as they enter the building.

Wi-FI & Li-Fi

Of course we shouldn’t ignore Wi-Fi, we all like to log in when we drop into the coffee shop, and it’s a perfect opportunity to push messages to coffee drinking consumers.

In Japan they are now developing Li-Fi, a light based version because there are too many Wi-Fi systems bumping into each other and causing interference.

GSM & GEO-FENCING

Exploiting our location is another technique that mobiles allow us to take advantage of, though expert advice is to use this carefully as unwanted push messages via SMS or apps may result in a more negative response than a positive one for your brand (and legally you’ll need permission from the user). However, like BLE, it can be very effective if used well, but the secret is to always give the customer something they want, not something they don’t.

AR

Augmented Reality is a great technology but has suffered from being seen as a bit of a gimmick by brands. Been there, done that, got the AR app (and a very big bill). But shopping centres in America are now using it as a navigation aid for shoppers, allowing marketers to insert offers and direct consumers towards key retailers.

TECHNOLOGY AND RETAILERS

Retailers have been in the technology game for a while but the technology that they most prefer at the moment is the tablet (especially iPads) because they are simple to use, cheap and allow a retailer to display a catalogue of merchandise way beyond the amount they can fit into a retail space. Brands like the women’s fashion retailer Whistles are able to deliver a better customer experience, greater consumer engagement and sell more range. Unlike big interactive screens, they are less expensive to run, don’t need content that needs constantly updating (and paying for) or lots of IT support.

Although there are many exciting blue-sky technologies out there, the brick wall many hit is when they need to be integrated into the main IT architecture. IT directors don’t like novel technologies that may get marketing departments excited, they see them as a dangerous liability to the system.

HOW you use technology really determines WHAT you get from it. Promotional marketing is still the number one love of retailers and it works well with mobiles.

According to JiWire, 53% of consumers are willing to share their current location to receive more relevant advertising, 57% are more likely to engage with location-based advertising, 62% share local deals with friends and 63% feel a coupon is the most valuable form of mobile marketing.

Basically, targeted offers, based upon proximity, leads to higher conversion rates.

BACK TO THE FUTURE

Unlike many gimmicks and fads technology has given us, the basis of Proximity Marketing is on traditional shopper behaviour and consumer psychology. This is why it’s an area that is here to stay. No matter how popular the Internet gets, we’ll still be spending most of our money off line, even in 10 years (according to the ONS).

The estimated value of the Proximity Marketing industry across Europe within the next few years could be $9bn, so it’s no wonder many companies are getting into this space.

But it’s still in its infancy, still untested in many areas and desperately needing leadership and fresh ideas, rather than falling back on old ones like coupons and offers. Which is also why it’s probably the most exciting area of them all, because you can combine all the tried and tested traditional techniques and channels of marketing with all the new technology. Marketing utopia!

To attend Pull 2015 and learn more about proximity, and many of the other creative technologies like Makey Makey, fill out our online form here.