Get Elastic Blog | April 14, 2014
The obvious application of beacon technology is to push content – be it welcome greetings, discounts and special offers, product information, branded content or other alerts.
What else can beacons offer in-store? Based on the research in Forrester Research, Inc.’s March 2014 report The Emergence of Beacons in Retail Get Elastic believes there are 5 reasons retailers should look into the technology.
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 (like Uber for shopping!) Smart stores will dispatch sales associates to the right “department” based on their areas of expertise.
Beacons can also support turn-by-turn directions to locate products. Combined with a voice or text search function, this can be very helpful for speedy grab-and-go shopping.
In-store nav can be useful if you have an app downloaded that syncs your Wish List or favorites, the ability to locate which ones actually exist in store, and to guide you to which products you’d like to view or purchase that day.
There’s also potential for “gamification,” such as Easter egg hunts.
Retailers are no doubt chomping at the bit to collect more data on in-store behavior to optimize merchandising. While there are many ways to do this currently, the connection to mobile has potential for tying habits to customer segments, such as cross-channel buyers, frequent visitors, customers of a certain age or sex, or out-of-town visitors.
PayPal Beacon notifies a retailer when an app-wielding customer enters the store, and a beacon located near point-of-sale interacts with the customer’s phone app to complete the transaction.
Beacon technology is a step towards closed-loop channel attribution where a marketer can measure the impact of mobile advertising exposure on in-store sales. For example, an ecommerce 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.
There remain a couple challenges here: 1) attribution can only be made across the segment of opted-in, tracked customers (incomplete data), and 2) beacons can’t track attention. Proximity to a beacon does not mean attention, neither does exposure to mobile advertising.
Retail beacon hurdles
Despite its potential, the biggest hurdle for retailers is perceived privacy. The success of beacon marketing and merchandising relies on enough opted-in users. Some studies suggest customers are highly resistant to being tracked in-store, even if it improves the customer experience.
Beyond privacy, beacon relevance and usability is also important.
Journalist Sébastien Page recounts his underwhelming experience at a Californian Apple store. Beacons welcomed him 5 times at different points in the store (including upon leaving), and product information did not come up when and where he expected.
Before implementing in-store beacons, it’s imperative to determine what content is most appropriate and relevant to deliver (and where), what the customer expects/wants (and doesn’t want) from the experience, and what veers into the gray area of spammy notifications. Your strategy should be informed at least in part from real customer input and testing.