by Calvin Cheng -- April 29, 2015

As much as I advocate for “all things digital,” I find it is important to remind myself that, even in a world that is increasingly omnichannel, 94% of all US retail is still conducted in a brick-and-mortar store

Also interesting is the fact that mobile adoption rates continue to rise, with 75% of shoppers now using mobile devices during their in-store shopping experience. This presents new opportunities for retail, consumer goods, and other brands and industries looking to deliver a more immersive and valuable customer experience to integrate digital and physical “in-store” experiences with mobile apps, and/or real-time messages and offers.

Beacon technology is one example of an industry that has begun to gain a foothold in the changing face of retail.  Apple was an early adopter of beacon technology with their iBeacons (my colleague, Ben Burke, writes about them here), and they quickly put beacons into their Apple stores.  Other retailers and consumer product companies have followed Apple’s lead in their integration of beacons, including Target, Macy’s, Walgreens, Dick’s Sporting Goods, Hillshire Farms, Unilever, and Coca-Cola.

So, what exactly are beacons? 

  • “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
  • “Beacon technology is not to be confused with Near Field Communication (NFC). In-store Beacons have a range of up to 50 meters and tend to be promotionally led, whereas NFC operates within 20 centimeters and is, primarily, a way to transfer data and enhance payment technology.” – Business2Community

For many brands, the most common function for beacon technology is as a means to directly push personalized, relevant, and timely promotions, deals, or coupons to customers based on proximity and location. However, there are other ways that beacons can deliver additional value to both customers and brands. Here are five:

 

1) Increase engagement via location-based actions  

Major League Baseball installed beacons in 28 of its 30 ballparks at the entrances and exits. Users of the MLB mobile app can get special content, and some teams like the San Francisco Giants have aspirations to extend geo-targeting to nearby events and activities in the ballpark, in order to increase customer engagement while they are on-premise.   

 

2) Connect offline behavior to digital activities

In Sweden, Unilever is using beacons to connect (and track) a customer’s visit to Unilever’s Knorr food truck, and then measure that customer’s affinity for retargeted Knorr-branded messages served via the mobile app of a Swedish newspaper. This application of beacons is interesting because Unilever used the beacons to learn more about their consumers’ behavior, rather than pushing an offer directly and immediately.

 

3) Exchange deals and services for customer data

Although a study done by Swirl revealed that 60% of shoppers already open beacon-sent messages, customers are equally aware of the benefit felt due them from brands in exchange for their attention.  One Washington DC shopper cited in the Swirl study stated, “I wouldn't mind letting a retailer know my location if it meant I'd receive coupons or benefits when I'm in the store[….] I'm essentially already providing that information, so I might as well get something out of it in the process.”

 

4) Provide a seamless customer experience  

Brands always look for ways to improve their customer experience, and Starwood Hotels is no different. Their beacon pilot enables concierges to greet guests by name, accelerate (if not bypass) the check-in process, and notify housekeeping if guests are still in their rooms. Another mobile-optimized experience is Starwood’s beacon-enabled keyless entry that combines beacons and Bluetooth Low Energy.

 

5) Empower store associates

Store associates remain a critical asset (and expense) in the delivery of a value additive in-store experience.  Nevertheless, customers are becoming increasingly self-sufficient thanks to online product information, reviews, and price comparisons.  This self-sufficiency requires different tactics be used by store managers in how they deploy their people. As Gartner suggests, “By using a combination of location-based technologies, real-time store monitoring and alerts via beacons, associates can be redirected from pricing merchandise in another department to greeting and assisting the high-value customer.”

 

Retailers and non-retailers alike are exploring innovative ways to connect digital and physical experiences for their customers and employees.  The Internet of Things (IoT) includes the ecosystem of connected devices, the data captured and analyzed from those devices, and the potential for actionable insights from the data (as referenced in my earlier blog post on IoT). Retailers and brands like Walgreens are finding creative ways to deliver value through integrated customer experiences that use their mobile applications in-store mode, connected devices including fitness and health trackers, and their beacon pilot in the Duane Reade stores in NYC.

In the weeks and months ahead, I’ll be interested to discover how retail and CPG brands engage customers (myself included!) in new ways that are relevant and personalized based on digital and offline activities.  In what ways are you excited and/or nervous about interactions like this with brands?