E.Leclerc Langon a hypermarket in the French town of Langon has tested out the use of location-based services along with a customer loyalty app using technology from Austrian firm Zumtobel. As expected, the technology increased sales.
The retailer E.Leclerc wanted to enhance fixed retail through digital transformation. Zumtobel Group Services (ZGS), the service branch of the lighting company supported E.Leclerc Langon on this pilot project to evaluate the added value of retail lighting concepts linked to the Internet of Things (IoT).
With the project, light serves an infrastructure to create new shopping experiences and to enable customer interaction that was not possible before. At the same time, the project has given new insights into using the “Internet of Light” and enhancing the loyalty of retail customers.
The results revealed an increase in sales from selected customer groups by over 40% compared to the same period during the previous year. The pilot test concluded that retailers financially benefit from a networked IoT lighting solution with improved sales numbers in addition to savings on lighting electricity and maintenance.
“With the expertise of ZGS and connected lighting, we were able to design a modern and interactive shopping centre in Langon – a place where our customers can experience a completely new way of shopping,” reported Alain Lafforgue, CEO of E.Leclerc Langon.
During the first stage, ZGS installed Bluetooth beacons in the existing TECTON LED smart location luminaires from Zumtobel to create a network of connected and digital lighting throughout the store. According to ZGS, the beacons, which can be integrated into the lights during regular maintenance, do not need any extra space and do not require a separate power source. These units establish a connection to customers and talk to them directly, while the customers utilize a smartphone app to shop.
“Lighting is the ideal infrastructure for IoT applications”, explained Stephane Vasse, head of IoT Business Development. “In this pilot project, we installed a system of luminaires with integrated beacons, a localisation platform and linked it to the E.Leclerc customer loyalty program. In this way, we were able to help E.Leclerc Langon
boost the knowledge of customers and respond even better to their needs.”
The test phase of the project has been running since the beginning of December 2017, and the first set of findings are just in.
They notified 2260 customers in three test groups in an email and texts about the new app and its functions in the store. The customers made up three test groups including two consumer segments and an addition group of 437 employees. The consumer groups were “Diamond” customers with high turnover (who buy a lot) and “Family” shoppers.
The retail smartphone app included several features intended to boost sales such as push messages, location-based offers, helping to locate a particular product, and offering an option to highlight and request missing products. The smartphones connect to the beacons via the downloaded app. The app alerts customers to dedicated offers in real time via a “push message” when they enter a particular area of the store.
According to ZGS, 1119 respondents downloaded the app, and the number of users increased continuously during the pilot phase. For the first phase, 771 people actively used the app in the hypermarket. E.Leclerc Langon and ZGS compared the purchasing behavior of the app users at the end of the test phase and to the sales for non-app users.
The first set of findings from the proof of concept study showed that push messages (proximity marketing) for selected offers significantly grew sales amongst all three test groups compared to the same period in the previous year.
Proximity Marketing Found to Boost sales Among Certain Groups
Revenues from app users in the customer test groups increased by 34% (Diamond) and 42% (Family) compared to the previous year.
“This new type of marketing relates to the location of the buyer and forms the basis for completely new customer experiences in the store,” confirmed Tariq Hussain, Head of Strategic Partnerships at the Zumtobel Group. “Direct interaction with a targeted approach increased sales figures, the number of visits in the shop and the average basket size.”
Virtual Customer Interaction Enhances Customer Satisfaction
The app using the “Internet of Light” also helped E.Leclerc Langon enhance customer communication when they search for particular products. During this interaction, the store can ask for feedback about the store’s performance and customer behavior, and the customers can notify the store about empty shelves and items not in stock. ZGS says customers can also pass on additional feedback about their shopping trip to the store directly via the app.
“Thanks to virtual customer interaction, we are getting to know our customers and learning more about their individual wishes. With this knowledge, we will be able to increase satisfaction levels and thereby generate greater customer loyalty,” reported Alain Lafforgue, who is delighted with the results. As one customer confirmed, the response from store shoppers has been equally positive, “I think it’s a good thing that I don’t have to look at my smartphone all the time, but rather that the app assists me through the store and shows me the recommendations based on my location. The targeted and personalized promotions have also motivated me to try out new products.”