What are beacons?
Beacons are small transmitters that are constantly sending a signal to all devices listening for such a signal. Apps on mobile devices can listen for that signal and, when they receive it, trigger a location-based action. In retail, beacon technology tracks a customer’s path around a retail store by communicating with smartphone apps through a Bluetooth signal, offering tremendous potential to target customers with relevant, contextual, personalized and appropriately-timed messages.
What is Apple’s iBeacon?
There is some confusion over Apple’s iBeacon and whether or not beacon technology can work on Android and Windows mobile devices or tablets. To clarify, yes, it can. Apple’s iBeacon is not hardware.
iBeacon is a system built into the latest version of Apple’s iOS 7 and 8 mobile operating system that lets iPhones and iPads constantly scan for nearby Bluetooth devices. When iBeacon identifies a beacon, it can wake up relevant apps on someone’s phone, even if that app is closed and not running in the background. Additionally, iPads and iPhones can act as beacons; they can emit beacon signals to wake up apps on other iOS devices.
Who makes beacons?
The number of companies making physical beacons and beacon technology is increasing daily. Here are 5 companies that are at the top of their game.
- Estimote – the largest and most well-known beacon manufacturer, already more than 10.000 developer kits have been distributed.
- Signal 360 – is compatible with more than just iOS7 phones because of its combination with audio technology. This means that 95% of the smartphones are compatible with their beacons.
- Glimworm – use Apple’s iBeacon to send a signal to smart phones up to 50 meters away. They are super secured with a 6 digit PIN code to operate. They can be rebranded with your company brand and logo and the code is open source.
- GPShopper : Their beacons are pre-integrated with their enterprise-class mobile content management system and reporting tools for retailers, making set-up, management and reporting easy. They can be used for both proximity marketing and for reporting only.
- Blue Sense Network: It has best in class iBeacon certified beacons and is compatible with all Bluetooth enabled smartphones. The secure firmware ensures tamper-free operation and has 200m+ of long range models available.
How are beacons used in retail today?
Customers have to opt-in to the technology by enabling apps to accept messages from the beacons. Retailers therefore have to find ways to incentivize the beacon acceptance process in order to convince customers to accept location tracking technology despite growing privacy concerns. To complete the process, customers have to turn on Bluetooth, accept location services on the relevant app and opt-in to receive in-store notification. Once customers have taken all the necessary steps, the beacons offer a variety of opportunities for in-store engagement. For example, a beacon located in the shoe department can recognize the customer’s proximity and push a coupon to their mobile device. Because that customer has downloaded the app, he or she gets access to exclusive deals with very little effort.
Integration with social media is another feature with great potential for retailers. Stealz app is a C2C based business model where users can check-in and share photos from a given place via their social channels in exchange for special offers. Since introducing iBeacon integration the app has seen a 45% increase in check-ins per user, 28% increase in photo shares per user and 245% increase in business acquisition.
Beacon technology allows for:
- proximity based coupons and flash sales
- store maps
- contactless payment
- smart signage
By tracking a customer’s path through the store, retailers can better position merchandise, identify areas in their stores that are difficult to navigate and shift salespersons to departments where they are needed most, depending on the time of day or day of the week.
By tracking which opted in customers make a purchase, retailers can see a customer’s reaction to a particular offer, sale, promotion, video, or photo in real time. Data from a 2014 Swirl survey shows that beacon marketing campaigns are affecting shopper behavior with 30% of customers surveyed redeeming beacon triggered offers.
What is the potential of beacons in the future?
Beacon technology can do everything from guide you to the correct airport terminal to turn off your lights when you leave for work in the morning. In retail, beacons sole purpose is to encourage customers to spend money. As you enter a store, your smartphone might welcome you with a sale alert. Stand in the home goods section for a while and a coupon may pop up for a new coffee maker. Here are three ways beacons might affect your next retail purchase:
- Location + personalization – Imagine beacons working as cookies, but in the physical world. When you shop online ecommerce sites can track your movements through cookies, but when you walk into a store, retailers have had no way of knowing where you go or how you spend your time in the store. Until now. Beacon’s can track your location and how long you spend browsing certain products to help the store predict your needs. An e-commerce platform, through its mobile touchpoint could pull location data based on a customer’s proximity to a beacon, and match it to previous exposures of an ad. That’s a massive step forward for building an omni-channel retail environment.
- In-store navigation – What if a customer could upload their shopping list into a grocery app and beacons could direct him or her on the most optimal route around the store, giving specific directions for all of the items on the list.
- Customers as beacons – Beacons can facilitate person-to-person communication, which can be helpful for paging sales associates from within an app, rather than wandering around searching for the nearest unoccupied associate.