Marketing with Beacons

Monday 16th, November 2015

supermarket photoThey started out the size of a grapefruit – but today Beacons are just tiny stickers that can be put on walls or objects. Beacons are small enough to be attached to a wall or countertop but they are all set to change how everyone from retailers and event organizers to transit systems, enterprises, and educational institutions communicate with people indoors.

How they work?

Beacons work like traditional beacons in that, they are objects that can send signals all around them to let people know their locations. They send small packets of information, from distances of between two inches to about 50 meters depending on the environment. When a smartphone comes into range, the beacon’s signal triggers content from either a local database or cloud-based storage. The smartphone user will then see a notification on their home screen saying a discount, reward incentive or contextual suggestion is near by – even if the phone is locked. Beacons are gaining a lot of traction with retailers or brands because it gives them the opportunity to communicate directly with shoppers not just at a store level but in an aisle or even at a fixture.

Beacons in marketing

Right now, beacons are riding the first wave – there is in-store retail engagement and offline payments. Retailers are using it to provide their customers with product information, or any deals or flash sales. They also use beacons to speed up the checkout process with a completely contactless payments system. Beacons can form a link between a phone that has a payment app and the store’s POS system – and through this, the shopper can pay for the stuff he has picked up, without even going to a register. That being said, there are issues that need to be addressed for a wide spread adoption of beacons. There are several layers of permissions to work through before customers can use beacons, for instance – they have to switch on Bluetooth, accept location services on the relevant app and then opt to receive notifications. Right now, Apple’s iBeacon is built into its devices and iOS7 mobile operating system – which means that there are 200 million iOS devices that can already serve as transmitters and receivers.

On the one hand, consumers have mobile devices in hand – giving them access to a wealth of information, including product prices and locations. On the other, there is a drop in traffic that goes to brick-and-mortar stores. It doesn’t mean that the physical store is defunct. It just means that the role of a store is changing – and this is where technology and beacons can help. Beacons allow the providing of value to the customer through many ways – this can be through offers, personalized service, assistance with decision-making, and providing new convenience services.

Kenneth Cole saw a significant increase in offer redemption rates using beacon technology. Aloft Hotels uses beacon technology, through which customers can unlock hotel doors after they check in. Tesco uses beacon technology to improve service and personalization – there are alerts on click-and-collect orders. They can also help customers find the products that are on their shopping lists, in the store.

Beacons can also be used by the retailer for mobile analytics – they can aggregate and analyse customer movements to improve store configurations. They can find out how many customers visited the store, how many times they visited the store and how long they stayed each time  – where they went, what routes they took, where they stopped or where they moved past quickly.

According to a study by InMarket, shoppers who get beacon offers and promotions are 19 times more likely to interact with the advertised product. Despite the fact that beacon marketing is nowhere near mainstream, beacons are changing our shopping experiences once and for all.

The scope is tremendous

Beacons are private because it gives users control of the apps that leverage the beacon. This also generally means that beacons are authenticated and with user permission, which can ultimately lead to tremendous experiences as a result.

Beacon Marketing started off in pockets where owners delivered content or offers through their own branded mobile apps. This kind of thing works great for engaging with brand loyalists – but the fact remains that they form a very small percentage of the total in-store traffic.  To widen their reach, some retailers started to work with beacon-sensing capabilities in their mobile apps, like Condé Nast and SnipSnap. Some large third-party mobile apps, like Facebook, are exploring adding beacon-sensing capabilities. Experts say that as beacon marketing matures, major brand advertisers will enter this ecosystem in a big way. Retailers would get their brand partners to participate in their in-store mobile marketing programs, who present relevant and engaging content which will go to great lengths to enhance the shopping experience. For brands this is a great way to deliver a highly engaging mobile experience to customers at the exact places where their products are sold.

The possibilities are endless. It is just up to brands to tap into it.

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