iBeacons were introduced by Apple in mid-2013 and more companies especially in the retail sector are seeing the opportunities for utilising Bluetooth Low Energy (BLE) beacon technology. iBeacon is both a brand and a standard for BLE beacons by Apple, however most BLE beacons are iBeacon compatible. BLE beacons allow apps on iPhones, Android phones and other mobile devices to respond automatically when the user gets close by.
Beacon usage in a retail environment
When beacons are used within a retail environment, retailers can send proximity-based alerts to shoppers at the precise moment and location in their store. Essentially, beacons are giving rise to contextual shopping. Using this highly targeted form of advertising, it helps to enable the customer to make a decision on purchase within the context of the store. To retailers, this is the holy grail of advertising. As an example, a beacon knows when you’re within a few feet of a Baked Beans stand so you receive a discount coupon on Baked Beans. This can be far more effective then attempting to mail you a coupon a month earlier in the off chance that you might be in the mood for beans and toast. Plus rather than receiving lots of notifications simply because you may be near a store, the pinpoint accuracy of a beacon message uses contextual signals to talk to you when it matters the most. Your phone will become more like your personal assistant armed with personalized answers and advice at the point in time you need it.
In a recent survey, beacon usage in retail stores caused a 19 fold increase of interactions with advertised products. A 16.5 fold increase in app usage in store and a 6.4 fold increase in the likelihood that a customer kept the app that sent them the beacon message. (Study by inMarket, June 2014).
However, it is true that the vast majority of shoppers already use their mobile devices for ‘showrooming’. This practice is where shoppers check on their devices in store for cheaper alternatives at a competing online store. Showrooming isn’t going to go away as mobile networks get more efficient and more widespread with the recent rollout of 4G and some retailers now offer free WiFi. However, showrooming shouldn’t be avoided but actively embraced by retailers and beacons offer a good way to combat the negative aspects of this practice. If your store is being used as a showroom, at least make sure it is your goods that end up being purchased either in the physical store or via your online store there and then. Even if you can’t compete purely on price with online stores, you can offer value through the same device that the shopper is using to check out a competitor. Beacons can be used as a call-to-action and to push out mobile coupons and promotions. Essentially, when the customer is in your store, a purchase in the moment is much more appealing.
However, it is vital that brands treat the value exchange with their customers with the highest respect, creating communications of quality rather than quantity with rich content and interactions. It is a privilege to be invited to access the customer’s most personal of digital devices, developing an honest relationship with them and embracing showrooming will become part of that process.
Furthermore, interactions like this can drive a shopper to pick up an item and buy it on their mobile at that moment without the need of a checkout.
Joel Blackmore, the Senior Innovation Manager at Somo pointed out that:
‘Instead of limiting mobile payments to physically queuing up, tapping your device onto a till-point and then leaving, Apple has introduced a system that allows a user to be greeted on their device as they walk into a store, to be guided through the store’s layout, to be shown product information and promotions and to pay without being in a queue (and without tapping anything).’
Whilst all this sounds great, there are significant challenges to overcome most notably the lack of expertise available either in-house or from external agencies. Mark Cody, the Senior Group Marketing Manager at Tesco remarks that:
‘Lack of expertise is a big challenge, not just in our company but a lot of agencies don’t get it. They claim they do, but if you scratch the surface they don’t.’
He also goes on to mention that the company will only begin to truly understand mobile as a ‘new breed of people’ enter the business. Presumably, the ‘millennial’ generation could help steer the innovation as they have grown up with mobile technology playing a part in their everyday lives.
Privacy is another concern. Many stores employ WiFi tracking to track customer behavior around a store. Apple’s development of its next mobile operating system, iOS8 will affectivity end this practice. iOS8 will randomize device IDs so tracking those IDs will no longer yield any worthwhile data. Beacons can step in and fill this gap because they offer privacy by design as the customer has to opt-in to receive notifications, i.e. they have to download the app to receive the notifications.
An emerging technology
There is no doubt that beacon technology is still in its infancy and is still emerging despite the hardware coming with onboard radios and temperature sensors. But there are some good examples currently being deployed to create great customer experiences in store and to provide entertainment such as House of Fraser’s beacon enabled mannequins. Potentially, coupling this technology with digital interactive signage, cameras and facial recognition software could further enhance the overall experience the customer has.
Beacons also have their usage outside a retail environment such as airports. Virgin Atlantic trialled beacon technology to speed up the checking of boarding passes and to also push offers such as free currency exchanges. EasyJet also setup a similar trial where passengers were sent information at various points around an airport such as security gates and baggage drop offs, to notify them to have boarding passes and other documentation ready.
We are only just merely scratching the surface of what we can do with beacon technology. It is important to note that having an appreciation of the user and their context, will give rise to great user experiences regardless of whether this is in the physical or digital environment. Beacons could play a very big part of delivering a truly omni-channel retail experience for the customer.