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Why Alex and Ani is embracing iBeacons in all of its stores

Alex and Ani found that 75 percent of users engaged with its pilot test of iBeacon technology. (Alex and Ani)

The rush of retailers rolling out iBeacons is beginning.  On Thursday, the jewelry store Alex and Ani announced it is using the sensors in its 40 stores nationwide, which is believed to be the first full deployment of iBeacons in a retailer aside from Apple.

“We always want to try the latest and greatest. By the time it hits the common vernacular or early adopters we’ve already been first in line,” said Ryan Bonifacino, the vice president of digital strategy for Alex and Ani.

The jewelry store, which had sales of $230 million in 2013, is using Swirl’s marketing and advertising platform that helps retailers engage consumers in brick and mortar stores. American Eagle Outfitters is currently testing similar technology from shopkick in 100 of its stores to deliver location-specific deals and product recommendations to customers’ smartphones. It plans to use iBeacons in additional stores early this year.

Alex and Ani did a pilot test in 2013 at two stores with Swirl to see if it could draw in more customers. Potential customers within a certain radius of the store saw an Alex and Ani promotion on Swirl’s app and 72 and 75 percent of users near the two stores engaged with it.

(Alex and Ani) (Alex and Ani)

“Retailers want to be able to tap everyone on the shoulder in their stores. This is the equivalent of what we’re doing with push notifications and full-screen experience,” Swirl CEO Hilmi Ozguc said.

Swirl has had at least talks with the majority of the top 100 retailers about using the technology, an interest Ozguc said took off after Apple began using iBeacons in its stores.

Bonifacino sees the iBeacons as a chance to retain customers and subtly encourage them to make more purchases.

“The technology allows me to position things around a store to compare our core product offerings and the results of those sales to complementary products to actually determine if they are indeed complementary,” Bonifacino said. “I never want to give a customer on average an excuse to buy one or the other, I want to upsell.”

By using data wisely, retailers say, they can be better informed about the costs of acquiring and retaining customers so they can better spend marketing and advertising budgets.

Swirl’s technology lets Alex and Ani see if customers are new or returning. They can track gender trends among shoppers as well. For example, Alex and Ani might notice its customer base has shifted to mostly men in the days ahead of Valentine’s Day. Realigning products in the store could result in better sales.

“If they’re a new customer and I want them to have a certain experience, maybe the math will tell us perhaps a lower price point is the way to go and you shouldn’t have the expensive stuff in the front of the store,” Bonifacino said.

Swirl’s work is rapidly evolving, suggesting that the iBeacon space is uncharted territory where rules, best practices and methods are fluid. Swirl begin by launching its own app to leverage the iBeacon technology. Now it’s often working with retailers to use iBeacon within each individual store’s app. Ozguc expects that in a year 80 to 90 percent of Swirl’s work will be with third-party apps, not the apps of specific retailers.

To reach every customer who walks into a store, the technology will need to be on widely distributed apps. “Most of us are not going to have 30 to 40 retail specific apps on our phone,” Ozguc points out. Apps that are extremely common, and made by companies with digital advertising backgrounds would be a good fit to take iBeacons in retail to the next level, he says.

Matt McFarland is the editor of Innovations. He's always looking for the next big thing. You can find him on Twitter and Facebook.



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