Beacons technology showed up full of promises, a win-win approach for retailers and consumers, but we’re not there yet. Beacons are low cost micro location based tags, often referred as “the indoor GPS”, using Bluetooth low energy for communicating with enabled devices.
For a retailer, there are several reasons why beacon technology can be attractive: it can attract customers in store, boost engagement with those already inside, help to recognise, reward and understand the best customers and obviously target ads and other messages to consumers as they walk through a store. It could also be used to monitor staff performance, checking where staff is and what is really doing.
Compared to other technologies, it works indoor while standard GPS does not, its application is not restricted to the payment moment as it happens with NFC and does not require an active behavior by the consumer as QR code would do. And last but not least, great surfaces can be covered with really limited costs.
But in order for the implementation to be a success, retailers need customers who want to use them. It’s not very difficult to understand the potential weaknesses of the idea. First of all, the device (usually the smartphone) of the consumer must be ready to accept the communications, usually by giving access to the retailer app. If you imagine several retailers in the same street using this technology, that would generate a bunch of messages to the same person to get into each store. Then, once inside, Beacon would allow staff to recognize the person, nice to have, but clearly a bit artificial. Then we can imagine the person walking around in store receiving again messages and offers each time he or she passes by an aisle. Some imagine that grocery stores could place beacons in their aisles and have FMCGs bid against one another for the exclusive right to advertise via those beacons. Agency executives say consumers are open to mobile ads so long as the ads are relevant to time, place and activity, but it’s still a fine line between annoyance and utility. I cannot envision happy people bombarded by discounts and offers.
It appears that theory and reality are currently walking in opposite directions. It’s true that less than 1% of the 3,5 million retail stores in the U.S. have rolled out beacon tech, but this number is growing and there are some examples of success.
I have the feeling that when a technology is really successful, the adoption rate is faster than beacons is achieving, but I still see some reasons why beacons can finally spread:
- Obviously the value is not in the technology itself, but in the way data can be transformed in valuable information; if beacons are coupled with a good loyalty program and advanced analytics, they can help to understand the consumer behavior more in deep;
- Beacon technology can “bridge” consumers physical and online experiences: to make this happen the retail have to access to the online behavior, something that can happen only if the consumer allows it or it’s part of a coalition loyalty program, where data of multiple partners can be combined together;
- They can help fighting “showrooming” with targeted discounts and offers.
Business Week on Beacons
The Guardian on Beacons
Digiday… dry and direct as usual
15 examples of successes and failures with Beacons
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