Member Article

The ABC of Beacon Technology

Discover how this new technology will improve the customer experience and encourage customers to buy more.

What is Beacon technology?

Beacons are a low-cost piece of hardware — small enough to attach to a wall or countertop — that use battery-friendly, low-energy Bluetooth connections to transmit messages or prompts directly to a smartphone or tablet.“ Business Insider

How does it work? Shoppers need to have downloaded your app (or a third party app) to receive and respond to the beacon signal. You choose how wide you set the range.

Apple is championing the way with its iBeacon implementation. Apple has built iBeacon into devices and operating systems. Many third party manufacturers have built beacons that can send iBeacon messages to Apple devices.

This technology has the potential to revolutionise indoor communication.

Warning! What’s the difference between Beacon technology and NFC?

Beacon technology is not to be confused with Near Field Communication (NFC). In-store Beacons have a range of up to 50 metres and tend to be promotionally led, whereas NFC operates within 20 centimetres and is, primarily, a way to transfer data and enhance payment technology (i.e. contactless payment cards and Oyster cards).

How does Beacon technology work?

The in-store Beacon technology provides retailers with the opportunity to enhance the shopping experience, often with special offers and discounts. Beacons can help the retailer upsell to the customer by directing them to specific sections of the shop and suggesting products. They can also provide further product information and display store guides. They also have the capability to allow shoppers to share products through social media, save products for later and even call for assistance in-store!

Will Beacon technology benefit my business?

In-store Beacons have proved to be particularly effective in the US, driving brand engagement and driving an increase in purchases. They also provide retailers with useful information about who uses their stores – eg, their age, gender and what they looked at.

Over a 30-day period in April-May 2014:

Interactions with advertised products increased by 19 times for users who received a beacon message. In-store app usage was 16.5 times greater for users who received a beacon message. Shoppers who received a beacon message were 6.4 times more likely to keep an app on their phone, versus those who did not.

It’s not just retailers trialling beacon technology… Pure plays are also getting in on the action. Vouchercodes parent company RetailMeNot is trialling Beacon technology in US malls – working with retailers to drive people into stores with relevant voucher codes.

That said, it’s crucial to get ‘buy in’ on beacon technology from your staff to encourage them to promote it in-store.

Beacon technology in the UK

UK retailers are still pretty wary about Beacon technology! However, several retailers such as Mothercare, Tesco and Waitrose are all undertaking or planning trials of the technology.

Mothercare hopes to use the technology “To engage with customers, rather than for promotional messages.” Tesco plans to launch a new Clubcard app. Waitrose is testing Beacon technology in its concept store in Swindon, trialling marketing messages to extend its relationships with customers beyond the checkout.

House of Fraser is also engaging with customers when they approach mannequins in their Aberdeen store. It is also trialling the technology in their shop windows, so people can ‘shop around the clock’.

Beacon technology gets personal…

Beacons are expected to become an integral part of every physical retailer’s customer relationship management armoury. Retailers have access to data about customers, such as location and buying behaviours, that can help increase personalisation.

Some customers worry that this technology is too immediate and intrusive. However, signs are that consumers are receptive if the technology enhances their shopping experience…

.. But your customers are in control.

Customers can choose to turn off the settings on their mobile, keep the app closed and keep Bluetooth switched off. Ultimately, your customers decide if they engage with you.

The retailer’s greatest challenge is encouraging people to download and engage with the application that contains the Beacon connection.

Key Beacon technology take aways:

• Beacon technology will drive brand engagement and encourage new customers.
• You will be able to upsell to customers in-store and increase revenue.
• You need to create an engagement strategy to appropriately promote Beacon technology and encourage your customers to use it.

Beacon technology uses apps, which indicates technology is becoming ever more important to retailers. Find out which other technologies, channels and devices you need to invest in with the eGuide: What is omni-channel? Copy and paste this link into your browser: http://bit.ly/retaileguide

This was posted in Bdaily's Members' News section by Sanderson .