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Macy’s Piggybacks On Its Sound System To Locate Customers

Written by Evan Schuman
July 19th, 2012

Macy’s on Wednesday (July 18) confirmed that it is deploying Shopkick mobile marketing throughout its entire chain. Although any chain-wide move by Macy’s—especially on a mobile marketing app—is worthy of note, the interesting element here is how it went chain-wide. It piggybacked on its existing store music system, which not only slashes the cost and time of such a mobile deployment but extends the wireless reach far beyond the entrances that Shopkick normally covers.

Behind this approach is a deal Shopkick cut with Mood Media, one of the largest retail in-store music providers. Mood, which last year purchased legendary elevator-ride-ruining Muzak, handles many of the largest chains, including Walmart, Target, Home Depot, Sears, Toys”R”Us, Foot Locker, Abercrombie & Fitch, TJX, CVS and Macy’s. Mood claims about 450,000 stores in the U.S. What this means is any chain that happens to use Mood for audio (not all of the chains listed necessarily use Mood for music; Mood has several other product lines, such as kiosks and digital signage) has a quick-and-easy way to offer Shopkick.

Even better, this move will address one Shopkick shortcoming. In a typical retail deployment, Shopkick places transmitters (small speakers that cost about $100 each) near the entrance or entrances to the store. A customer then needs to have his or her phone turned on and the Shopkick app launched before entering the store. Otherwise, the app won’t hear the Shopkick signal and won’t, therefore, register the customer as having arrived at the store, which means no points awarded to that customer and no notification sent to the retailer that the customer has dropped by.

By leveraging Mood’s speakers (in some stores, hundreds of Mood speakers are already in position), Shopkick’s signal could be beamed everywhere. So if a customer didn’t launch the app until he or she was 100 feet into the store, standing in the housewares section, the app would still be detected.

The Shopkick deployment method never limited Shopkick activity to just by the entrance. Shoppers have always been able to walk into the store and test products or scan barcodes or interact with displays in a dressing room for more points. The difference, said Shopkick spokesperson Alia Dudum, is that “rewards for scans and interactions don’t require a signal to be awarded.”

Shopkick signals are not detectable by human eardrums, so the signal is played on top of the music without any musical degradation. (If anyone is thinking, “You mean it’s possible to degrade Muzak?” don’t go there.)

Mark Elfenbein, Mood’s Chief Business Development Officer, said his firm is preparing more retail tactics with its speakers. By triangulating between speakers—detecting the signal strength from different speakers—Mood can determine a customer’s exact location, something it has been trialing with Puma. Technologically, this isn’t a new idea. But by piggybacking on audio speakers already in place in almost a half-million stores in the U.S., it can provide some extremely cost-effective retail mobile marketing options, way beyond Shopkick.

Mood plans to charge retailers monthly fees for adding these services, but Elfenbein wouldn’t give a range for the fees. “It’s something. It’s not zero, but it’s very affordable,” he said.

On the Shopkick program, by expanding it to the Mood speakers, it enables much more information to potentially go to retailers. Current Shopkick transmitters only broadcast the store number. But Mood can theoretically broadcast a different signal from every speaker, enabling the signal to say, for example, “Macy’s flagship store, sweater display.” As the phone moves and detects different signals, it can map the exact customer path, including how long the shopper stood in front of particular products.

Elfenbein cited another Mood advantage, which might be a complicating factor for Shopkick. For some chains, such as Abercrombie, the chain wants to have the music heard outside the door, as a lure to bring in customers. (Or, in the case of some of the teen fashion stores my 14-year-old daughter seeks, it acts as an unusually effective parent audio repellent.)

That’s great for general shopper acquisition, but it could undermine Shopkick’s pitch to marketers that signal detection proves the customer is actually inside the store. Still, that problem could be dealt with by simply not including the Shopkick signal with outside speakers and only using them for speakers that can be heard from inside the store.

This piggybacking approach does more than eliminate purchasing a huge number of $100 speakers from Shopkick. An even bigger issue is the cost—and logistics—of arranging for these installations at every store. Between those two financial and deployment time advantages, the deeper coverage within the store, and the existing deployments in so many major retail locations, this approach could be a key move forward for mobile marketing. Might even be worth listening to elevator music. OK, not quite, but it’s getting close.


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