Why Beacons are the new killer technology in retail
Even if the technology behind beacons is still a work in progress, industry research is already suggesting that this technology could help retailers struggling with declining traffic and sales. In fact, in-store retail and offline payments are considered the first wave of beacon applications.
In the U.S., large retailers such as Macy’s, Target, and Urban Outfitters have begun experimenting with beacons this year for their geolocation marketing, and all have reportedly received positive feedback from their customers. Whilst locally trials have been done before by several retailers, including Chatswood Chase shopping centre’s in Sydney. Another trial by St George Bank has seen Apple iBeacon devices installed in three bank branches, to send welcome messages and tailored information to customers.
So, what exactly are beacons and how do retail beacons work?
First off, beacons are small, wireless devices that use Bluetooth low energy (BLE) technology to send and receive data within small ranges. Typically, one beacon is needed for every 5,000 square feet of store space. They are normally attached to walls, the countertop, shopping carts, and other strategic places inside the stores. A beacon is powered by only a single battery that can last for months.
It’s important to note, however, that beacons work in tandem with specific, integrated apps (e.g. shopping apps and online payment apps) previously installed by the customer or shopper. This is how beacons connect to the smartphone or tablet of the shopper. Without the right app, beacons won’t be able to perform their functions.
Beacon technology is similar to NFC (near-field communication) technology. However, unlike NFCs, beacons don’t require contact between devices to work. They are capable of “waking up” the required app as long as the shopper’s bluetooth is on and the smartphone is in the range of a beacon (approximately within 70 metres).
Great for targeted marketing
Beacons offer plenty of opportunities especially for retailers to connect with their customers. One way is through relevant messages such as:
1. A welcome message
2. Personalised coupons
3. Special offers
4. Loyalty rewards
5. Reminder of what’s on your shopping list
These devices can also collect location and behaviour data from shoppers as they move along the aisles of the store. Retailers use this crucial information to improve their targeting and ultimately increase in-store sales by:
1. Offering the right discounts at the right time.
2. Pushing notifications about the products the shopper is interested in, including their specs, stock and prices.
3. Encouraging the shopper to avail of contactless payment to speed up the checkout process.
4. Introducing slow moving products.
Collecting and analysing data is the key to understanding what a customer desires. What’s also great about this tactic is that even if you’re pushing personalised messages to shoppers, you’re not pushing the boundaries of their privacy – and this is something most people appreciate.
To beacon or not to beacon
Regardless of the size of your business, beacons can be a potential game-changer for you. Aside from being a strategic investment, beacons are easy to deploy, and require minimal maintenance. Other benefits include:
1. Customer convenience. As soon as a customer enters a store, there’s that intent to purchase. This is why if you provide them with information that they need like product details or seasonal deals, you are helping them make quick and informed decisions. The sales cycle is shortened. They would no longer need to wait for staff to be available or wait in line to buy items they want.
2. Enhanced shopping experience. Beacons resonate well with the modern consumer. In a time when everyone is carrying a mobile device everywhere, consumers will likely appreciate receiving information at the right time and at the right place. Shopping experience becomes easy and enjoyable. It’s giving more than what they expect.
3. Affordability. The low-cost use of beacon technology makes it affordable for almost any small business.
4. Being able to compete with large retailers. Larger retailers have no monopoly over this technology. Your ability to use them helps level the playing field.
5. Customer intelligence. Beacon-enabled apps collect data on customers’ spending habits and product preferences, this type of information will enable you to create more personalised, targeted offers in the future.
Beacons offer hope not just for offline retailers and bricks and mortar businesses. Other potential users of this technology include event organisers, transit systems, enterprises, educational institutions, and small businesses who want to communicate with people indoors.
This is a real marketing opportunity for forward-thinking businesses who are always looking to better understand their market and grow their businesses offline.