Asda trials beacon technology as sales dip

The UK's second largest supermarket, Asda, yesterday became the latest of the large grocers in the country to report a drop in sales – although CEO and president Andy Clarke said he is confident the business is following the right strategy.

Like-for-like revenue, excluding petrol sales, was down 1.6% year on year in the 13 weeks to 30 September, but Clarke said that the Walmart-owned retailer has been gaining market share in a sector where the other major players, Tesco, Sainsbury's and Morrisons, have lost some ground in recent months.

Commenting at a media briefing in London, the Asda boss argued that Asda reacted to warning signs about changing market conditions earlier than its nearest competitors, although he admitted there was still work to do in terms of competing with the emerging discounter grocers, such as Aldi and Lidl. These German firms have significantly grown their respective share of the UK supermarket sector in recent years, and are causing traditional players in the space to redefine their proposition around price and shopper value.

Clarke said Asda has continued to deliver its 'Redefine Value Retailing' strategy through price drops, operational and store format reorganisation, as well as online innovation.

"The last quarter has seen a shockwave go through our industry and others are starting to respond to the challenges they face," the Asda CEO remarked.

"I expect that we will see another tough quarter and I'm under no illusions that the battle continues to rage. A new reality is upon us and although we were the first to adapt, we need to do everything to remain ahead of our traditional competitors whilst removing reasons for customers to go to the small discount shops."

One Asda future-gazing strategy that was made public this week revolved around the use of beacon technology in its stores.

Speaking at the Nimbus Ninety Ignite conference, Asda's head of partnership marketing Nick Bamber revealed that the grocer is currently using non-customer-facing version of the technology in around 20 stores so that senior management can gauge its potential impact on shoppers.

His comments, reported by Marketing magazine, indicated that the trial will not be rolled out across the retailer's store portfolio in the next 12 months. He also warned there are barriers to wider roll-out because customers must have the relevant software and ensure they keep their Bluetooth switched on.

Essential Retail caught up with a number of tech companies to assess their reaction to Asda's early investigations into beacon technology.

Ian Malone, managing director at mobile marketing platform Geemo, welcomed news of Asda's initial steps towards using proximity marketing tools, coming as it does after other retailers such as John Lewis, Tesco and Waitrose have already trialled similar systems.

"For us, this announcement further demonstrates how retailers are trialling proximity marketing solutions not just as a mechanism to deliver coupons and vouchers, but rather as an innovative new method for retailers and brands to better understand the needs and wants of their customer base," he explained.

"The increase in big name retailers in the UK beginning to trial and introduce this technology demonstrates how marketers are seeing the enormous potential it has and the benefits it can achieve, whether this is in an improved customer journey or an increase in footfall in-store and ROI."

Neil Garner, CEO and founder of mobile marketing, loyalty and payments vendor Proxama, added that beacon technology can improve footfall into stores and help build consumer relationships.

"Asda follows in the footsteps of major brands such as John Lewis and Mothercare, as well as stadiums such as the KIA Oval and those in the Major League Baseball, who have trialled beacons," he noted.

"But, to get the most out of the technology, retailers need to mature these into long-term programmes to ensure investment is made into educating consumers and building confidence around the tech. Once this has been achieved, the true potential of beacons will be realised and retailers will be able to use them to reach consumers in a new way and increase revenues."

Paul Hennin, director, marketing international at tech business Aerohive, remarked: "As beacons are just a transmission tool, they need to be underpinned in-store by connectivity such as Wi-Fi to really enrich the customer experience.

"For example, with beacon technology, retailers can prompt customers when they arrive at the store or in a specific department and ask if they want an associate to meet them. A 'help' button incorporated in a mobile app that a user can access via the in-store Wi-Fi can summon an associate, giving consumers exactly what they need, thereby creating a meaningful touch-point and converting a potential sale."

John Fleming, EMEA and Australasia marketing director at digital marketing firm Webtrends, cited recent research from his company that found 42% of Britons said they would like to receive real-time information and offers from retailers when in the vicinity of a store. Of these people, 11% indicated that they would like real-time reminders from their phone when in-store so they can be directed straight to the item they have previously searched for online.

"Retail stores specifically can galvanise their traditional bricks and mortar approach by providing a seamless online/offline experience to their customers," he added.

"By tracking a customer's online shopping behaviour such as browsing history, most popular purchases and average order value, brands can send a promotion based on this intelligence to the customer when they are near or in a physical store. For example, Asda's marketing team know that Jack searches and buys a lot of pork pies through online shopping, so when he is next in-store they can send him to the specific aisle where his favourite pies are, with a special offer or promotion that encourages him to buy today."