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

Why Beacon technology may be not the future of retail

When I read Nick's post on Beacon technology, I was immediately excited. I've been following this space for at least a year now and have been waiting for some revolution to take over my local BR, Zara, and TJ Maxx stores. But nothing has happened, or maybe something has, but I haven't noticed it (which would be bad from a marketing perspective!). First and foremost, I wholeheartedly agree that Beacon technology has massive potential to change how we approach communication, customer engagement, and service; it can become another form of digitally-driven marketing to form a personalized and valuable relationship with consumers, particularly from a retail or in-store perspective. However, I do think there are a number of challenges. I list them below:

1. Opting-in is a must.
When I think about wanting a better in-store experience and how Macy's can do that for me through beacon technology, I ask myself, what do I have to do? I need to have the Macy's app on my phone (which I don't) and I need to turn on BLE (which I previously didn't but only do so now in support of BLE-tech). If I make it past these two steps, I then need to be able to receive push notifications and to be realistic, how many consumers want more notifications? Not me. Downloading the app and opting in may present a large barrier for many retailers, but an opportunity still exists.

2. Consumers may not want to be engaged via their mobile device while shopping in the store.
As a consumer shopping in a retail clothing store, I am rarely on my phone checking out deals or looking up trends on blogs. I am just browsing. How often am I on my phone, holding onto it as I browse the t-shirts rack? Close to 0 times. Now, on the otherhand, this application may work for electronic stores, public areas such as airports, and sports stadiums where beacon technology could prove more powerful because the phone is a more meaningful device for the consumer experience.

3. The in-store digital experience will bring in more revenue.
Let's say I happen to be spending a little more time in the jeans section and Levi's knows my historical purchasing history from my registered account; why should Levi's give me a promotion? Are they giving money away unnecessarily? There is a trade-off in what could have been organically-driven revenue versus promotion-driven and what falls in-between is money left on the table.

I'm sure there are many other challenges Beacon technology faces but these are some of the biggest barriers from my perspective. However, the industry is quickly learning that other channels outside of retail are potentially more valuable and larger in scale. I'm looking forward to where beacon technology lands and how I can be positively impacted as an end-user.

Source: http://techcrunch.com/2014/07/08/in-five-years-ibeaconbluetooth-low-energy-device-market-to-reach-60-million-devices/

Facebook Backtracks on Beacon

The launch of Facebook's Beacon system a few weeks ago triggered an outcry among users and privacy advocates, who found the automated posting of purchases and other activities on third party websites to users' Facebook news feeds intrusive. Facebook was even likened to the Grinch, for ruining users' holiday surprises by posting the gifts they had purchased online for all to see. In response, Facebook has made important changes to the Beacon functionality. The policy for posting Beacon activity to a user's news feed has changed from opt-out to opt-in, and the opportunity to control one's privacy settings have been made more prominent in the site's interface. Score one for user privacy rights?

More on the development here: Breaking: Facebook Updates Beacon

Facebook's official Beacon FAQ