The beacon is poised to alter the shopping experience and create a stronger bond between customer and retailer, all while providing valuable, location-based information to marketers. Beacons, and the proximity-marketing services they deliver, are already in use all over the US. Apple Stores, Macy’s and even Major League Baseball have embraced the beacon. As their success stories continue rolling in, you can bet that beacons will soon be sending their signals all over your city.
Beacons are small and relatively inexpensive pieces of computing hardware, often wrapped in silicone or some other light material with adhesive on the bottom that can be affixed to a wall or countertop or plugged into a computer or electrical outlet. They use low-energy Bluetooth to transmit messages to mobile computing devices, such as smartphones or tablets. Apple’s iBeacon service, built into newer iOS 7 devices, uses the very same Bluetooth technology. And like most of Apple’s twists on technology, their implementation requires some additional data formatting.
Bluetooth signals work effectively indoors and out, unlike cell coverage or even Wi-Fi, which tend to get spotty when taken out of their element. If a customer walks past a beacon you’ve placed near your store’s entrance, whether you operate out of a shopping mall or open-air retail center, the beacon can transmit a short, semi-personal message, such as “JUST FOR YOU! 40% OFF. ACT NOW!”
Consumers have become experts at ignoring the vast amounts of marketing content surrounding them on a daily basis. The impersonal promotions found on billboards and TV commercials are losing their effectiveness as shoppers seek a more rewarding and personal connection with the brands they support. Using the beacon’s micro-location capabilities, retailers can cut through the advertising clutter and speak directly to any customer within 5 inches to 150 feet of the signal. Not since Twitter have retailers been closer to their customers, and companies are already experimenting with this groundbreaking marketing technology.
Not surprisingly, Apple was one of the first retailers to bring beacons into the store space. After creating the iBeacon infrastructure, Apple decided to try it out first hand by implementing it in all 254 of its US retail locations. If you haven’t stepped into an Apple Store lately, it’s worth your while to go see the iBeacons in action for yourself. That is, if you have the right hardware. As MacWorld blogger Joel Mathis discovered, the iBeacon technology doesn’t work on the iPhone 4 or any earlier model of smartphone. However, if you have a 4s or later, you owe it to yourself to try out this enhanced shopping experience.
Safeway and Giant Eagle have recently begun installing inMarket iBeacons in at least 200 grocery stores across Seattle, San Francisco and Cleveland. The goal at the start is to better understand how shoppers move about the store, as well as to deliver real-time offers of staple items. The inMarket iBeacons will communicate with two inMarket apps, including List Bliss and CheckPoints. The former will send users a pop-up notification when they walk in the door of a store, telling them that an item is on sale. The latter will tell them which items will earn them the most rewards points. Regardless, inMarker CEO and cofounder Todd DiPaola is proud to proclaim, “Besides Apple themselves, we are the first to take this groundbreaking technology out of single-store betas and into consumers lives throughout the heartland of the US.”
Macy’s is running a small trial using Shopkick’s shopBeacons, which will notify customers of deals when they enter the store. For customers with the Macy’s app, the beacons will tell them how many loyalty points they have accumulated and can offer more personalized rewards. In addition, Macy’s also hopes to link customers’ online shopping accounts. For example, if there is a product on a customer’s online wish list, the company could offer a coupon for that product when they visit the physical store.
According to Macy’s CMO Martine Reardon, “We have made great strides in creating the best omnichannel experience at Macy’s and delivering the most relevant messages and offers to our customers at what is arguably the most helpful moment – while they are shopping in our stores – can be very advantageous for the customer.”
Venture-backed Shopkick has begun rolling out similar services to numerous other retailers including American Eagle Outfitters, Best Buy, JC Penney, Target, Crate & Barrel and others. Shoppers in these stores will receive a welcome message on their phones when they enter, along with details of “location-specific rewards, deals, discounts and product recommendations in the store.”
Alex and Ani, maker of jewelry and accessories, uses beacons in the company’s 40 stores, in large part to help the retailer better understand which store layouts and displays offer the greatest customer appeal. Ryan Bonifacino, Alex and Ani’s vice president of digital strategy, is a big believer:
“One of the things that iBeacon can do is provide data about consumer behaviors in stores to test the effectiveness of merchandising and store layouts — you can now actually A/B test physical displays in stores — as well as staffing levels. The implications for retailers (and others) are profound.”
According to MarketingLand, Timberland and Kenneth Cole have developed similar beacon programs and will be rolling them out at some point in 2014.
Even entertainment venues are experimenting with beacons, as seen with Major League Baseball’s decision to install “thousands” of iBeacons in at least 20 ballparks around the country. According to MacRumors, ballparks will individually decide which functions to offer via beacons, though delivering more details on nearby food offerings, ticket programs and merchandise discounts are all likely to be part of the mix. The NFL experimented with iBeacons at MetLife Stadium during Super Bowl XLVIII, though the league has not yet announced any followups.
Coca-Cola, a major sponsor of the upcoming World Cup, is considering how to incorporate beacon technology during this massive event. The company may use beacons to direct thirsty attendees to nearby vending machines or concession stands.
For beacons to work properly, smartphone users must have Bluetooth turned on and must allow for location tracking. In addition, users must have the store’s app on their device. The hope is that the mutual benefits of beacon-based proximity marketing for consumers and retailers will encourage customers to knock down any technical barriers standing in the way of widespread beacon adoption. As more mobile devices begin reading BLE signals and people become comfortable leaving their Bluetooth on, there’s no doubt that beacon technology will remake how we shop and how retailers sell.