Macy's and Shopkick Mash Up Mobile Tech to Personalize Offers

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Macy's is using a mix of technology to pitch offers to consumers as they move within its store and shop across channels.

The retail chain is working with shopkick to dramatically expand their deployment of Bluetooth Low Energy beacons and the vendor's ultrasonic technology to sense when a consumer has entered a store and which departments the consumer is visiting. Macy's will send personalized offers and other tailored content in near-real time based on the shopper's location.

"It's the combination of BLE and ultrasound together that is the most powerful way to reach consumers in a store," said Alexis Rask, the chief revenue officer at shopkick.

Shopkick is following a test run of beacons at Macy's locations in New York and San Francisco with a full rollout of more than 4,000 beacons at stores across Macy's footprint. The installation is expected to be completed by the end of September, with activation following shortly thereafter. Macy's would not provide an interview for this story, but said the beacon expansion is part of a broader initiative at the retail chain that also includes support for the upcoming Apple Pay mobile payment system and new mobile apps for Macy's.

During the initial phase of the shopkick deployment, Macy's app users will receive the same Macy's offers or promotions that are available to all shoppers. By the spring of 2015, the offers will be tailored based on consumers' individual behavior.  

"There's details about products that we think you may be interested in because of your app browsing behavior," Rask said.

Shopkick's system rewards consumers with a currency called "kicks" when they visit a store. It also has partnerships with Visa and MasterCard to determine when the consumer makes a payment.

Shopkick, which has used sound-based technology connected to Macy's internal music system for the past few years to sense location and deliver offers, is now combining this system with Bluetooth beacons to increase its accuracy.

Shopkick first uses ultrasound to verify a shopper's actual presence in the store. Ultrasound cannot bleed through walls, so it provides the most accurate way to determine that a shopper has entered the store and is not standing in a parking lot or in another nearby business, Rask said.

Among other benefits, beacon technology can "wake up" an app that is in the background, instead of the consumer having to remember to open the app in the store, Rask said.

The shopkick app then guides the consumer through the store via strategically-placed beacons. The number of beacons may vary based on location, though each beacon generally has a range of about 150 feet. Rask said some stores will have up to 20 beacons based on factors such as department location and square footage, which can range from a few thousand square feet to as large as 20,000 square feet. "The Herald Square location will obviously be different than the other locations," Rask said.

Apple, PayPal and Capital One are each using beacons to combine location-based marketing with CRM as retailers chase the ultimate goal of using mobile channels for one-to-one targeted marketing.

"Today's shopper is dramatically different from the shopper of just four or five years ago. Fundamental shifts in behavior are occurring, and three new demands have come to the forefront: simplicity, immediacy and context," said Jordan McKee, a senior analyst at 451 Research.

Companies with a strong vision around mobility, such as Uber, Airbnb and Postmates, execute well on all three of these demands, which is pressuring traditional retailers, McKee said.

"The average consumer doesn't understand why traditional brick-and-mortar retailers have had a difficult time keeping up," McKee said. "The fact that it's hard to merge channels and integrate back-end systems means nothing to the average shopper; it's a moot point and an unacceptable excuse."

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