Beacons and Mobile Wallets - eMarketer

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Beacons and Mobile Wallets

July 29, 2015

Lucinda Newcomb
Vice President, Mobile and Site Product Management

Cosmetics store chain Sephora was one of the first retailers to partner with Apple when Apple Passbook launched in 2012. Today, the retailer continues to leverage the mobile wallet to drive awareness for its Beauty Insider program and is looking at beacons to further engage consumers while they are in-store. Lucinda Newcomb, vice president of mobile and site product management at Sephora, spoke recently with eMarketer’s Rimma Kats about the allure of mobile wallets, as well as the company’s exploration of beacons.

eMarketer: What attracts Sephora to mobile wallets?

Lucinda Newcomb: The mobile wallet is far less about offering discounts—that’s not our business model. It’s more about driving our loyalty program. Our Beauty Insider program is a key part of our offering, and it connects us and drives that loyalty with our client base. Not having to carry around your plastic card anymore was incredibly attractive to us.

eMarketer: As systems like Apple Pay and Android Pay add more support for loyalty programs or rewards, what impact do you think that this development will have?

Newcomb: This is where we see our app as a fundamental part of our loyalty strategy. We’ve been having a lot of conversations with Google and Apple about what those capabilities that we’re building are, because once our most loyal customers download the app, we have a much better interaction with them.

We know more about them. Once they’re signed in, we can do a lot more with personalization. We can also do a lot more with driving frequency of usage, providing them not just with a buying experience, but also with content that they’re interested in.

“If you walk into one of our stores that has a beacon right now, it will give you a notification that tells you of the products that are currently in your basket.”

eMarketer: How are Sephora’s mobile wallet promotions typically being delivered to users?

Newcomb: We have an extensive program surrounding notifications. We’ve been running a pilot on our beacons in several of our stores and seeing results there. If you walk into one of our stores that has a beacon right now, it will give you a notification that tells you of the products that are currently in your basket. That’s been one of the best notifications in terms of open rates that we’ve seen.

We have a hierarchy of these messages to make sure that we’re not deluging everybody who walks into our store and has the app.

eMarketer: How long have you been using beacons?

Newcomb: When we first implemented beacons eight months ago, we had a global opt-in that asks you, when you open the app, whether or not you’d like to receive in-store notifications as a separate category of notifications. Once you’ve opted in, then you will see those when you walk into the store. We’ve implemented beacons in a couple different locations within the store. As you go within range of a particular beacon, that beacon is going to fire specific messages.

There are two categories of messages. There are the messages that would fire for anybody who has the app and has the app open when they walk into the store. If you’re near our Beauty Studio, a message like a mini-makeover service may pop up. We also have a beacon near the cash wrap where, when you go to check out, we suggest you bring out your Beauty Insider card to make sure that you get your points. Those are the kinds of general messages that we’re sharing as you walk around the store.

eMarketer: Are the beacons installed in all of your locations?

Newcomb: No. This is still a pilot—it’s not in all of our stores. We want to make sure that these messages are improving the store experience for our clients and not just bothering them. We’re really looking at this as, how do we make those messages helpful and additive to your store experience and help connect you to Sephora, as opposed to flooding and overwhelming you as you walk through.

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