How Alex and Ani Is Pioneering the Future of Retail
It may be time to kiss email marketing campaigns goodbye. The future of marketing is more in the moment. Welcome to the age of iBeacon.
For the uninitiated, iBeacon is a location-sensing technology built into Apple's iOS 7 operating system (Android devices can download iBeacon apps). It communicates with other iBeacons in physical locations to track users' whereabouts. And in a sure sign that this concept is taking hold with mainstream retailers, Alex & Ani, a $230 million jewelry store chain, announced Thursday that it will be rolling out iBeacon technology in all of its stores across the country.
Plenty of other retailers, from American Eagle to Safeway, have been testing iBeacons in trial runs at a limited number of stores, but until now, Apple, unsurprisingly, was the only company to put its full trust in the technology and roll it out across all of its stores. After a successful trial run, Alex & Ani has now decided to do the same.
"The future of commerce," says Ryan Bonifacino, vice president of digital strategy for Alex & Ani, "is being more intelligent about what your customers want and taking a one-to-one approach to sales."
Alex & Ani is partnering with Swirl, one of many beacon-based marketing firms that have cropped up in recent years. Swirl not only sells in-store beacons, which communicate with shoppers' phones via Bluetooth, but it also provides retailers with a marketing dashboard where they can track customer data. Swirl provides retailers with mobile app technology, which can link to a brand's existing app and push promotions and other information to customers.
Unlike some brands, Alex & Ani didn't use the trial period to promote flash sales and other discount promotions. Instead, because Swirl has its own app and audience of users, it became a sort of customer acquisition channel, letting Alex & Ani educate nearby Swirl users about its jewelry. According to Bonifacio, of the number of users who saw one of Alex & Ani's promotions, about 30 percent visited a store. He says the percentage of people who actually bought something was in the "high teens."
As Alex & Ani rolls this technology out to all 40 of its stores, however, Bonifacio says it will serve a greater purpose than purely customer acquisition. For starters, Alex & Ani plans to launch its own app this year, which will enable the company to track customer purchase history and make smarter recommendations to them in store. It will also be beneficial from a merchandising perspective, since Swirl's technology can track where shoppers walk throughout a store and determine the best place to showcase certain products.
While Alex & Ani may be an early adopter, however, it's not hard to imagine that other brands will soon follow suit, especially considering companies like Foursquare are already moving in on the location-based promotion space. For retailers, this could be one of the most exciting technological innovations to come along in advertising in decades. After all, when are customers more prone to buy something than when they're in your store? According to a new report by Business Insider Intelligence, the use of beacon technology may soon expand beyond the retail market, too.
Of course, this type of marketing will require a good deal of fine tuning--the last thing a retailer can afford to do right now is completely alienate customers with overly invasive promotions in an increasingly privacy-obsessed world.