By  on July 28, 2014

Call it a captive audience.

Several Hudson’s Bay and Lord & Taylor stores have begun sending digital notifications to consumers’ smartphones as they are shopping inside the department stores.

Hudson’s Bay and Lord & Taylor, both divisions of the Hudson’s Bay Co., have deployed the mobile shopping experience via the Swirl in-store beacon marketing platform. The digital messages cover a limited number of brands and categories including new product arrivals, look books, hot items, trends, gifts with purchases and discounts.

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The partnership with Swirl involves 10 stores: Hudson’s Bay on Queen Street and in Yorkdale, Toronto; Vancouver, Calgary, and Ottawa, and Lord & Taylor in Manhattan and Scarsdale, N.Y., and in Boston, South Shore and Burlington, Mass. The program officially starts today though some of the stores began sending out the push notifications last week.

“As we continue to observe consumers using their mobile devices, we want to find ways to take advantage of it,” said Michael Crotty, Hudson’s Bay and Lord & Taylor executive vice president and chief marketing officer. Crotty characterized HBC’s partnership with Swirl as essentially an experiment to create a more engaging mobile shopping experience and capture greater sales.

To participate in the program, customers must have either the store app or the SnipSnap coupon app and must opt in to receive push notifications. The notifications are emitted by small, battery-powered transmitters known as beacons, which recognize the apps on smartphones in the store. The beacons are about the size of a hockey puck and can be unobtrusively placed under counters or behind displays. They have a five-to-300-foot range. The Swirl platform leverages Bluetooth Smart and Apple’s iBeacon technology.

At the five Lord & Taylor stores, beacons are on the cosmetics, contemporary and shoe floors, and in the 424 Fifth and Black Brown 1826 private brand shops, Michael Kors handbags and Alex & Ani jewelry.

In Hudson’s Bay, beacons have been placed in the cosmetics, contemporary, home and ladies shoe floors as well as in the 424 Fifth, Black Brown 1826 and Alex & Ani shops.

Alex & Ani, Kenneth Cole and Timberland are already Swirl clients that have rolled out the technology to all of their stores.

Hudson’s Bay and Lord & Taylor are the first major department stores to roll out the technology, though other major retailers are expected to announce rollouts before the holiday season, according to Hilmi Ozguc, founder and ceo of Swirl Networks. Swirl and HBC will be measuring consumers’ reactions to the in-store notifications to determine the preferred number of push notifications to send out and how much of an interlude there should be between notifications. The content is controlled by HBC. The companies will also have to gauge any concerns over privacy and information security issues.

“We are experimenting. It’s a limited rollout,” Crotty said. “When we see how consumers are interacting with mobile devices, it is not hard to believe that they will get very comfortable with and really appreciate targeted messages when they walk into a retail environment. It’s not intrusive because you have opted to get in. We can do a good job delivering a good message. It’s highly likely consumers will see the value in this. What is nice is we can move fast with this without making a significant investment.” HBC and Swirl declined to disclose the costs of the rollout. Another company engaged in beacon technology is StickNFind and some other retailers. Macy’s, for example, has been testing the iBeacon at its Herald Square and San Francisco Union Square flagships via the Shopkick mobile app. Customers download the Shopkick app, then activate it when shopping in the stores to receive special offers.

“Beacon technology is the future of retail marketing and Swirl’s platform will assist us to make every visit to Hudson’s Bay or Lord & Taylor even more rewarding for our customers,” said Liz Rodbell, president of Hudson’s Bay and Lord & Taylor.

Swirl, based in Boston, is backed by Hearst Ventures, SoftBank Capital, Longworth Venture Partners and General Catalyst Partners. He also said when consumers receive notifications on their smartphones in the stores, the response rate is high. He said that of those opting into the program, 75 percent swipe the notification and half who look at the content redeem the offer, which is typically a sale.

Asked if Saks Fifth Avenue, which is also a division of Hudson’s Bay Co., will sign up for Swirl, Ozguc said, “Not yet. We’re working on it.”

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