Macy’s just made a big bet on beacons — the proximity messaging technology widely hailed as a key ingredient in the future of retail. The company says it plans to expand its partnership with the Silicon Valley-based Shopkick from a small pilot in the retailer’s flagship stores in New York and San Francisco to a national roll-out that will include over 4,000 beacons in Macy’s locations across the US.
It’s an impressive step forward for Shopkick, which CEO Cyriac Roeding says is nearly the most widely used retail shopping app in the world. Shopkick offers user rewards to shoppers who use the app while in-store, it and generated half a billion dollars for its partners last year. The expansion of shopBeacon, which is built upon Apple’s iBeacon Bluetooth Low Energy (BLE) protocol, allow Macy’s to personalize the shopping experience for customers in real time.
“That will be driving consumer engagement in the store,” said Roeding.”Think about it this way: A Macy’s store now turns into (your personal) Macy’s store. It goes from our store to your store. That’s the big difference.”
The system will remind people to open the app as they approach a Macy’s location. It will guide them through the store and suggest items they may like all while communicating on a first name basis.
“In a funny way, we’re going back 100 years when people were known by name,” said Roeding. “When they walked in, people knew who they were, and they were greeted. They knew what they might be looking for based on their previous purchases. We’re now doing that electronically with technology, and shopBeacon is doing that for Macy’s.”
ShopBeacon will allow Macy’s to market at a more regional level before quickly tailoring data toward hyperlocal, personal marketing. Users who opt in will receive special offers specifically for them.
“By early spring 2015, these Macy’s offers can be even more precisely tailored by departments in the store,” he said. “This enhancement in Macy’s mobile technology arsenal will allow for increased consumer engagement and promotional and marketing relevancy that will benefit customers nationwide.”
The vast expansion seems to indicate large chain retailers are sold on localized marketing. Roeding said it has become accepted that a strong virtual presence is now a necessary part of the brick and mortar retail experience.
“The insights of retailers with regards to omni-channel (retailing) are pretty profound,” he said. “When Target hired its new CEO Brian Cornell, one of the key things he said was omni-channel was the most important part of his job.”
Shopkick wants shopBeacon to create a digital layer on top of the physical world that allows users to experience what they like about online shopping while in a Macy’s store. If the expansion is successful, it likely won’t be long such experiences becomes the norm.
“I don’t think that’s very far away,” said Roeding. “I think in a couple of years every big retailer will have iBeacon or a similar technology installed. It’s a must have in order to make a store more personal and entertaining.”
Staying ahead of the tech curve has allowed Macy’s to thrive at a time when many thought old school department stores were going the way of the dinosaurs and print newspapers. Not too many people predicted the venerable retail institution would partner up with a Silicon Valley startup to once again change the face of retail shopping.
“Macy’s has been a trailblazer in omni-channel for many years already,” said Roeding. “Compare Macy’s stock price over the last five years to 95 percent of all other retailers, and you can see what it does. Macy’s stock has been rocketing up in the last five years. Remember five years ago when people said department stores didn’t have a future? You look at Macy’s and you see how terribly wrong that is.”
Mason Lerner is a contributor to Street Fight.