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Walgreens' latest mobile app update includes an increase in beacon-enabled deals and coupons, reports GeoMarketing.
The company has been testing beacons in its Duane Reade locations since February to push mobile coupons and promotions. And while Walgreens is well poised to see a lift in sales due to such tools, the company has some significant consumer concerns to overcome before adoption spreads.
Beacons could drive growth in engagement and sales at Walgreens locations.
- Consumer packaged goods (CPGs) are a prime target for beacon usage: That's because CPG products are typically inexpensive items that are purchased frequently. This allows beacons to gather lots of data on shopping habits and use that data to send personalized, location-based messages.
- CPG shoppers want coupons: Sixty-one percent of US shoppers who have never tried in-store tracking before say that receiving discounts and coupons from a retailer would drive them to opt in. A further 47% cite loyalty rewards as something that would cause them to opt-in to location-based messages. Considering the frequency of CPG purchases, pushing coupons via beacons could prove to be extremely beneficial in boosting loyalty and total sales.
- Beacons are already having an impact: In total, BI Intelligence estimates that $8 billion worth of CPG spending this year will be influenced by beacon-triggered messages that shoppers receive on their smartphones while shopping in stores, or about 2% of sales in the category. This is due to the requirements needed to receive beacon-triggered messages and the total size of the CPG market.
But significant hurdles remain for Walgreens.
- Shoppers are concerned about their privacy: Thirty percent of US shoppers who have not tried in-store tracking and push notifications before say that they will never do so, according to a report from Walker Sands. This is mostly due to privacy concerns about being tracked and sharing access to shopping data.
- Beacons require a number of mobile features: The number of requirements that must be met on the shopper’s mobile device in order for beacons to be able to push content is likely the biggest barrier to widespread beacon influence. According to our estimates, only about 17% of smartphone users in 2015 met all the specifications needed to receive any kind of beacon content.
This latest update could be instrumental for Walgreens, as it's becoming increasingly clear that retailers must enageg with shoppers across multiple channels in order to coax the money out of their wallets.
BI Intelligence, Business Insider's premium research service, forecasts that U.S. consumers will spend $385 billion online in 2016. Moreover, BI Intelligence predicts that number will grow to $632 billion in 2020.
This is hardly surprising considering e-commerce's healthy growth. Though the U.S. retail average growth rate in the first half of 2016 was just 2% for total retail, it was 16% for e-commerce.
The number of online shoppers has grown by nearly 20 million from 2015 to 2016. And these 224 million shoppers are spending more, as the total amount spent online grew from $61 billion in the first quarter of 2015 to $68 billion in Q1 2016. Finally, these customers are transacting more frequently, as the number of online transactions has risen by 115 million from 2015 to 2016.
But all of this shopping online creates its own set of challenges, both for consumers and the companies that are trying to get their products onto shoppers' screens and into their shopping carts. In short, you need a plan.
And to create your ultimate e-commerce battle plan, you need the right intel.
BI Intelligence is here to help.
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