Beacons - Evolving in Retail and Payments
May 29, 2014
Retailers are constantly looking for opportunities to gain a competitive edge. Not only do they compete with one another, but they also compete with consumer shopping habits like showrooming (i.e., researching products in-store only to buy them online somewhere else later on).
Today’s landscape of mobile-based technologies and cloud networking capabilities are giving way to new opportunities to create competitive advantage and enhance the shopping experience. Retailers that can quickly and successfully implement new innovations that attract people to their stores and retain loyal customers will not only see return on their investments, they will improve the in-store shopping experience.
One of the many innovations that retailers are researching are beacons. Beacons are devices placed inside stores that communicate wirelessly with consumers’ smartphones. By using Bluetooth technology, beacons can detect consumers as they enter the store and immediate communicate with them. These communications can be used to send media, promotions, coupons, advertisements or product information. Beacons can also detect consumers’ interests and collect information based on how people are moving through the store.
Retailers can see immediate benefits from employing beacons. First and foremost, retailers will now have the ability to communicate directly with consumers in the store. These are potential customers who have already shown interest in your products by walking in. Being able to offer them customized offers based on shopping habits and preferences is extremely effective. Not only does it improve the consumers’ shopping experience, it prevents consumers from showrooming.
Secondly, there is value in data collection. The information that is being transmitted and received from beacons can be used in conjunction with point-of-sale (POS) systems to track purchase history, consumer movements within the store and coupon redemption, to name a few. With this type of information, retailers will gain insights around store layouts, inventory, coupon testing and other metrics that will help them compete with rival retailers and improve their overall shopping experience.
Beacons have the opportunity to provide a lot of value to retailers, but there are some limitations to their widespread use. Consumers hold a lot of the power; they have to be comfortable with “sharing” this information. Not only would consumers need to enable their Bluetooth connections on their smartphones, they’d also have to determine just how much personal information they’re willing to share. Beacons and other geo-based programs are not mainstream yet as many consumers aren’t ready to receive targeted messaging or be tracked through their shopping experience.
Companies like PayPal and Apple have already begun testing their beacon products and it’s just a matter of time before other technologies are developed to enhance the retail experience. From self-serve kiosks to mobile loyalty programs, in-aisle check-out and now beacons, the retail environment is changing. Is it for the better? Only time will tell. One thing is for certain, if the dotcom boom took us away from the retail store, the mobile boom is creating opportunities for retailers to bring us back in.