In today’s fiercely competitive hi tech world, it can be a challenge to say the least to stay on top of the constant releases and updates of innovative technologies. These technologies are evolving every facet of our lives from the way we conduct business to the way in which we monitor our blood pressure. In particular, new advances in wireless technology, specifically beacons, are already gaining huge traction and projected to greatly affect a wide-range of industries and fields. In this piece we will primarily focus on the benefits of beacons in relation to retail businesses as they are currently being utilized the most in this particular industry.
Beacons: What Are They?
Beacons are small, inexpensive devices based on Bluetooth low-energy (BLE) wireless technology that helps provide more accurate location-information with greater precision compared to GPS, NFC and Wi-Fi. Basically, these devices help in transmitting small amounts of data using the BLE technology up to 50 meters. Beacons differ from other location based technologies in that they are solely a one-way transmitter and require a specific application to be downloaded on the user’s phone in order for the user to receive the transmissions. Specifically, “iBeacons” (which you have probably heard of the most) are Apple’s standardization of the beacon technology, and the most popular/widely used in today’s market.
Benefits of Beacons in Retail
1. Effective Advertising Tool
If you run a retail business, then utilizing beacon hardware can greatly help in attracting the attention of your customers, as it can serve your advertising messages straight to the user as soon as the user’s device comes within a beacon’s proximity within your store. These personal, tailored messages can not only assist in increasing upsell, but also serve as a medium to enhance the customer experience. In addition, beacons and loyalty apps can be used together to reward customers for a myriad of location-based actions. Beacons also troubleshoot the innate physical limitations of brick and mortar stores by bundling extra product and services, resulting in expanding the potential for more purchases. Take Macy’s, for example, one of America’s leading department store chains who was the first retailer to adopt this special technology. By teaming up with Shopkick app, Macy’s sent customers location-specific deals, discounts, and recommendations while in their store. Their test of the technology was such as success that they installed more than 4000 iBeacon devices in their locations nationwide. Other major retailers are following suit. According to Business Insider, nearly one third of the top 100 retailers in the US will have deployed at least some beacons this year and at least 85% by the end of 2016. Moreover, they expect beacon technology to influence over $4 billion worth of retail sales this year.
2. Cheap and Easy to Adopt
Beacon hardware is quite affordable. For instance, a set of three to four iBeacon transmitters that is linked to an app and a CMS cost around $100 or even less. What’s more, setting up a beacon hardware is pretty simple and contains a UUID (Universally Unique Identifier). Once you’ve installed the transmitter, you are only left with the process of creating tags, actions, etc.
In a nutshell, the iBeacon and other beacon brands are cheap and can be used instantly since it they come available in ready-to-use form. So even if you are unsure if beacon technology will be successful for your brand, it is worthwhile and cost-effective to at least test it out.
3. Boosts the Power of Personalization
The focus on personalization in mcommerce has already demonstrated notable value and with beacon technology, personalization is essentially intrinsic. Everything ranging from coupons to product recommendations via beacons warrants personalization and if done right, can be extremely invaluable for your brand name and customer loyalty. Just as shopping applications such as ASOS can send personal shopping recommendations based on previous purchases, so too can beacons, yet with even more efficacy because the consumer can see and hold those recommendations in person. Moreover, if a store is particularly crowded with all salesman occupied, consumers can still have a personalized, assisted experience by way of the beacons. Yet bear in mind, once messages from beacons appear spammy, annoying, and/or generic to users, then users will easily turn off their Bluetooth thus disabling the notifications, or worse, uninstall the associated application.
4. Provides Insightful Data
When it comes to assessing consumer behavior, online stores have had a notable advantage over brick and mortar stores due to their ability to utilize web and mobile analytics. Now thankfully, with beacons, retailers can better assess the behaviors of their consumers within their physical stores. Beacon technologies can enable a retail chain to set parameters for analyzing consumer behavior and create a data inventory. For example, retailers can assess what time of day and day of the week in-store shoppers are most likely to download a particular coupon. While large-size organizations typically require ‘Big Data’ to make distinct decisions, small and medium size companies can most certainly make use of the beacon technology for understanding users’ behavior patterns. That being said, even larger corporations can glean unique insights as well. Thanks to the advent of cloud computing even SMEs can help capture data essential for a positive outcome.
5. Increases App Engagement and Retention
With mobile shopping and consumer mobile device usage continuing to grow, beacons can act as the useful bridge between the physical and digital retail space. Due to the fact that beacons work via mobile apps, there is fantastic potential for applications to increase their user engagement and retention rates. By leveraging the technology of beacons, apps can establish themselves as a pivotal tool for shoppers. Take for example multinational retailer Carrefour, which saw a 400% increase in mobile application engagement thanks to the implementation of beacons. Despite this awesome statistic, retailers should not be nonchalant about their app’s user experience. The positive potentials can be just as great as the negatives if their UX is not thoroughly tested and maximized.
Currently, there are over 30,000 active beacons present in the market and by 2016 they are expected to influence over $40 billion worth of US retail sales. There is no denying their potent influence on purchases, app engagement and retention, and customer experience. To put it simply, retailers who do not take advantage of this technology in the coming year, could see themselves falling behind their competitors.