People have been talking about the promise of beacons as a marketing tool for some time, but lately that conversation level has escalated. Perhaps it’s because more consumers than ever will have access and experiences with beacons this holiday season. Given that, we thought we’d put together a little primer on beacons for those who are intrigued and want to know more about this fascinating area of technology-empowered marketing.
What Are Beacons, iBeacons and Eddystone Beacons
In the context of marketing and mobile marketing, beacons are small Bluetooth transmitters that are placed in strategic locations, often inside brick and mortar stores. A beacon detects the presence of smartphones within its range, and can deliver content and experiences to those devices, with the permission of the user. Key to beacons is the use of “Bluetooth Low Energy” technology that enables a beacon to run on internal power for a long time without the need for an electrical connection on frequent battery changes.
Beacons transmit a unique identifier called a UUID that helps a device “understand where it is” and display contextually relevant content for that location, as defined by the individual or company that placed the beacon. In addition to transmitting messages to phones, beacons can also be used to understand in-store traffic patterns and other behaviors by detecting the location and path of individual mobile devices.
iBeacon is the protocol standardized by Apple. Beacon device makers create iBeacon compatible devices in order to communicate with Apple devices. iBeacon is a proprietary standard limited to communicating with iOS devices. Eddystone is Google’s competing protocol. Apple licenses the iBeacon protocol, whereas Eddystone is open source. Eddystone works on both Android and iOS.
Different beacons can have very different signal ranges. Some are set for “Immediate” range, and communicate with devices only when they are within a few inches of the beacon. “Near” beacons communicate when a device enters within a given number of feet from a device. “Far” beacons can communicate with devices 100 yards away. In the retail context, the most common use cases are for “near” beacons. At least so far.
Beacons v. Geofences
Proximity-based marketing is not limited to beacons. Some marketers also use an older location-based technology, geofencing, in order to communicate with devices when they enter a particular radius. For example, an app might be designed to deliver information and offers when a person enters within 3 miles of a retail location. Geofences are generally for larger areas than beacons — distances measured in hundreds of yards to a couple of miles.
Why Retailers are Intrigued and Excited about Beacons
Four core strategic uses have been identified for beacons: in-aisle location-based marketing, automatic customer “check-in”, analysis of shopping behaviors and as a means of enabling customers to pay for purchases without entering checkout lines.
Beacons hold the potential of adding a layer of content and engagement to the retail experience. In an environment where malls and many brick and mortar retailers are struggling to attract and retain traffic, beacons are viewed as a potential tool for enhancing the in-store experience. Some also believe that they could be a powerful tool to combat showrooming – when store visitors visit retail to evaluate goods but transact online to save money. Many retailers also see them as a way to drive loyalty and to better understand the shopping habits of their customers.
While most discussion of beacons revolves around consumer experiences, this Digiday piece, and many retail analysts, believe that data collection may be even more important to retailers than creating consumer-facing experiences, at least in the long haul. By more precisely understanding shopping habits, retailers will be able to take steps calculated to increase transactions and ring.
Retailers Using Beacons
A number of leading retailers are testing and implementing beacons and beacon technology in their stores. Some of the biggest include Macy’s, Lord and Taylor and Simon Malls. Other users of beacons include Virgin Atlantic, Starwood (as a way of checking in and entering your room without a key or front desk interaction,) and certain major league sports teams for seat upgrades in stadiums. A number of additional retailers are conducting tests as well.
Beacons and Push Notifications
Beacons do not deliver push notifications or other foreground experiences to all devices. This is definitely opt-in technology, in which a user is provided a proximity-driven experience through an app that they have downloaded. Whether that is a retailer’s own app, a shopping app, or another type of app that is designed to deliver content based upon proximity triggers. For beacon technology to be beneficial to the customer experience, it needs to deliver experiences only to those that want them.
Naturally this has implications on the size of beacon marketing programs and results, at least in the near term. It is challenging to seed a new app with brick and mortar customers. Some retailers have very popular apps and will likely incorporate beacon technology into these. Other stores may opt instead to use cross-retailer shopping apps that already have a strong install base.
Five Beacon-Based, Triggered Customer Experience Use Cases
Here are a few example ways that a beacon could be used in a brick and mortar retail context:
- When a consumer enters a store, a beacon would trigger a special “VIP” offer or information about seasonal fashion trends.
- A shopper could receive notices of all available sale offers by nearing a special kiosk near the store front.
- When a person entered the detergent aisle in a grocery store, a coupon for a particular brand might be available.
- If a store visitor wanted information and reviews about a product, they could place their device next to it and receive content.
- An auto shopper could opt in to get car brochures as they shopped a dealership.
The Beacon Nightmare Scenario, and Getting the Experience Just Right
Like many other marketing technologies, beacons hold tremendous promise but also potential pitfalls. For consumers who want to receive information and offers about products that they are in market for, beacons offer a unique opportunity to juxtapose content delivery with critical moments of consideration. They could also be a great way for consumers to save on products and types of products. These could be great opportunities for brands to influence a decision process or close a sale.
But unwelcome beacon communications could severely damage a retailer or product brand. You can imagine, for example, the backlash that would be triggered if your phone buzzed six separate times as you traversed a single store aisle. Unless, of course, you were extremely price conscious and opted into such frequent communications. In any case, without robust customer experience management, beacon-based communications could easily become the pop-under of this decade.
Recently a bunch of research has been done to determine the ideal beacon push message frequency. Many think it’s about one or two messages per store. For the retailer, making sure that the customer experience is a welcome one will be absolutely critical to ensuring that beacons help instead of hinder efforts to drive sales and loyalty.
Many retailers see the true promise of beacon-based marketing as pull- versus push-based. Instead of broadcasting messages, apps will make information available when it is requested by the user. That seems a rather sensible approach given the need to tread pretty cautiously in this new marketing arena.
Beacons, Apps and Mobile App Measurement
Beacon technology is truly in its infancy, and understand customer behaviors and reactions to messages will be absolutely critical in order for retailers to get it right. Mobile app measurement will play a critical role in the process of creating and calibrating the right experience from beacon-based marketing.
Mobile app measurement will help marketers understand the behaviors that take place in apps, whatever triggers them. That sort of incredibly granular understanding will be critical as retailers test and optimize their way to ideal customer experiences. In addition, the ability to segment app users based upon their reactions to content and actions will likely help retailers create more custom and personal experiences based upon individual shopper preferences.
This isn’t an area where brands or retailers will want to “wing it” without a robust and granular feedback loop.