“Beacons” are all the buzz in brick-and-mortar retail, and they’re poised to change the game immensely for both retailers and shoppers. If you haven’t heard of them, here’s a quick Beacon rundown.
What are Beacons?
Beacons are little battery-powered sensors – about the size of a quarter – that can be placed throughout a store’s physical layout. Created initially by Apple, the “iBeacon” protocol technology was built into its iPhone 4S smartphones, and later, more extensively, in the company’s iOS 7 release. Last year, Apple unleashed the power of beacons in its stores, where it could send shoppers notifications of available software updates.
Beacon technology now includes newer generations of Android-powered devices, and empowers retailers and shoppers to communicate in real-time through low-energy Bluetooth protocols. In the video below, I walk through a whiteboard explanation of iBeacons:
How do Beacons work?
Beacons sense the presence of a mobile device by sending out “pings” through Bluetooth. Based on signal strength, a beacon can pinpoint the precise location of a mobile device inside a store. The beacon then communicates this data to the store’s server, which in turn can push coupons, offers, and messages to the phone, opening a dialogue with the customer.
Why are Beacons used?
Beacons have the potential to enhance two-way communication with shoppers. Sending a welcome message is an easy first step, leading to the extension of a promotional offer for shoes when a shopper approaches the shoe department. The power of beacons lies in providing value to shoppers through key differentiators such as customer service offerings and “clienteling” opportunities. But the real impact comes with personalizing the shopping experience by tying beacons into CRMs and other systems.
Imagine a scenario where a retailer recognizes you as you enter a store or a department. Through beacons, a notification can be sent to a sales associate, alerting them to your presence, your interests, and your recent purchase history. The system then allows them to assist you with your shopping journey, making it not only personal, but also more targeted and efficient.
Another scenario borrows a feature from ecommerce, where an online retailer might initiate a chat with a shopper who lingers for a while on a particular webpage. The same service can be provided in physical stores where, through the use of beacons, a shopper can be asked whether s/he has any questions or is in need of assistance from a sales associate.
Bridging brick-and-mortar with click-and mortar
In an article entitled “A Retail Ray of Light” in the current issue of Stores magazine, RetailNext’s own Maria Fernandez-Guajardo, vice president of product management, is quoted on an emerging demographic of shopper, Millennials, and how savvy retailers can best serve their needs:
That new shopper, according to Fernandez-Guajardo, is a Millennial — at ease with using technology tools and wanting to extend that use to physical stores. It is a group that avoids most printed promotional supplements in the search for deals.
“It’s just the way they are,” she says. “They know how to browse. They know how to find the product. They read the reviews. They feel uncomfortable even talking to associates. They are used to one-click checkout. That’s the way that they shop.”
Thus retailers, as they figure out their positioning with beacons, might approach the opportunity as bringing the best of bricks-and-mortar to the e-commerce experience.
“Now you can browse and you can shop with all the benefits of online, but you have the benefits of bricks-and-mortar, which is instant gratification. You can take the merchandise with you,” Fernandez-Guajardo says.
Just the beginning
While beacons are all the buzz in retail right now, they’re still at early phase of adoption. Because customers tend not to welcome distractions, interruptions, or even “spam,” retailers will be challenged to implement beacons in a way that enhances the shopping experience. By placing the customer experience first, retailers can implement beacons in ways to find true value-added and differentiated service—a key ingredient for winning in retail.
Find out more about beacons and other technologies in location analytics during our upcoming webinar, “Zooming in on Shoppers: Using Location Analytics to Improve the In-Store Experience.” The webinar will take place on Tuesday, April 15th from 11:00am to 12:00pm PT. To register and secure your spot, click here!