Beacon Technology

Beacons are the next big thing in mobile technology and are becoming the most rapidly adopted in-store technology since mobile card readers. The biggest problem with indoor spaces is that they often block cell signals and make it nearly impossible to locate devices via GPS. Beacons are a solution. Beacons are a low-cost piece of hardware (small enough to attach to a wall or countertop) that use Bluetooth low energy for communicating with beacon enabled devices such as smartphones and tablets. They are poised to transform how retailers, event organizers, transit systems, enterprises, and educational institutions communicate with people indoors.

Beacons offer the potential to target a consumer at the most opportune moment. Brands are no longer limited by shelf displays and point-of-sale campaigns to communicate their messages, and brand marketers can extend past the store floor or shelf to deliver a personalized, digital form of outreach to identified shoppers. This technology has enormous potential to enhance the shopping experience, making it quicker and easier for customers to access the information and products they are looking for, or provide special offers or discounts to loyal shoppers. It can also provide retailers with invaluable data about their customers’ shopping habits and staff activities and efficiency – allowing them to make improvements in store and maintain service standards and operations.

To unlock the massive potential of beacons, retailers need customers who want to use them. The main barrier to wide adoption of beacon technology is the fact that customers have to voluntarily download and install a smartphone app for it to work. And this is only the first layer of permission. Customers also have to turn on Bluetooth, accept location services on the relevant app, and opt-in to receive in-store or indoor notifications. To overcome this, retailers need to educate customers about the benefits this technology offers and demonstrate the unique benefits they wouldn’t get otherwise. One option for retailers is to provide a more personalized shopping experience by providing indoor maps, shopping tips, targeted product offers and offering special in-store only coupons and discounts. Another option for retailers is to integrate beacon technology with popular third-party shopping apps such as PayPal or ApplePay. The scope of beacon technology will expand once retailers allows these third-party apps to hook into their in-store beacon system. Customers may not download apps for every retailer they plan to visit, so it makes sense for the retailers to open up their beacons to outside apps in order to send alerts and notifications to their users.

U.S. retailers are currently racing to adopt beacon technology. According to Business Insider, half of the top 100 American retailers are already testing beacons in 2014, and they will have this new technology installed in about one-third of stores by the end of 2015. The samereport estimates the beacon installed base to witness a CAGR (compounded annual growth rate) of 287% over the next five years! It’s clear that beacons have the potential to play a significant role in retailers’ ongoing efforts to provide ever-more personalized and seamless consumer experiences. The long-term benefit of adopting beacon technology – in-store engagement becomes more relevant, interesting, and, ultimately, more profitable. 

Sources: Business Insider, GroupM Next, TechCrunch, and The Guardian