Could beacon technology light the way for retailers?

3rd Aug 2014

Travel around many parts of the country and you might see remnants of a bygone era standing atop hills and ridges – beacons. Lit with fire, they were used to communicate from village to village, valley to valley typically to warn of invasion.  History lesson over. But a new form of beacon is having a similar impact – this time attracting a new shopper invasion.

If you’d mentioned Bluetooth to the average shopper five years ago, chances are they would have remembered it as a rudimentary way to send messages to mobile phones within close proximity before the advent of the internet-enabled smartphone. Now, however, the rise of mobile commerce means Bluetooth technology is being used in a new way within the retail industry, to influence consumer behaviour within stores and inform their buying decisions at the shelf-edge.

Bluetooth beaconing is transforming the ways that retailers and shoppers engage within the store environment, to provide a more satisfying - and profitable - in-store experience. Beaconing works by sending out a signal to Bluetooth-enabled mobile devices, in order to pinpoint a visitor’s location on the shop floor. Based on that location, a tailored message can then be sent to that phone promoting offers relevant to the products in the area the shopper is.

Of course, Bluetooth is not a new technology so you might be wondering why this form of in-store interaction is not commonplace already. The simple answer is that technology changes are only adopted when there is consumer appetite, and up until now there hasn’t been much of a desire to communicate via mobiles in a bricks and mortar retail scenario. This is changing, however; a recent survey by eDigital Research revealed that in addition to carrying out direct mobile commerce, half of smartphone users would now be receptive to receiving messages sent to their mobile via a Bluetooth beacon in-store, while a separate study by Savvy Marketing found six in 10 UK shoppers would like to receive digital coupons to their mobile phone to use in the store environment.

The coupon statistic in particular is an interesting point about how Bluetooth communication can increase opportunities for omni-channel and bricks and mortar retailers. Up until now, stores have relied on paper discount vouchers, often distributed at the checkout for use next time, which have much less traction than online discount codes and can of course be transferred to another shopper. A digital coupon issued in the store, though, is a timely way to increase basket value during a specific shopper’s visit by enticing them with special offers as they move around the aisles. 

From revolutionary to indispensable

Bluetooth technology gives retailers the ability to gather more information than just location – from the smartphone user’s loyalty application, data such as the length and frequency of previous visits and information on their recent in-store purchases can be extracted, so that businesses can tailor offers to products they know will appeal to each shopper individually. In fact, grocery chain Waitrose is already trialling Bluetooth technology in its Swindon store to measure the power of real-time, location based promotions.

Beacon technology also has the power to transform shopper experiences at the shelf edge. Whereas GPS has a 50-100m location margin for error, beacon location is incredibly accurate, and therefore it can be used to deliver information to the shopper on the exact product they are standing in front of. This could be in the form of a discount voucher, access to further information on that range or even a tongue-in-cheek reminder – there’s no harm in pushing out a notification asking if they’ve forgotten to pick up the item, considering they bought that product the last three times they visited the store! In its Bluetooth beacon trial, Waitrose is encouraging shoppers to scan barcodes in order to read customer reviews on their phone, and they can also add the item to their virtual shopping basket in order to keep track of their order ahead of the checkout. Waitrose is even offering Swindon’s smartphone-engaged shoppers the opportunity to pay for goods via a mobile wallet. 

Beaconing isn’t just a useful tool in terms of capitalising on mobile commerce to increase consumer value, either. It can also be used to track shoppers’ journeys around the store, regardless of whether they buy anything, in order to gather important data on the in-store journey. By collating this data, retailers can produce a heat map to show where people go, how long they stay there and their route around the store, from which profit-making business decisions can be made.

For any retailers still sceptical about the benefits of Bluetooth beacon technology, perhaps this closing statistic from Gallup will seal the deal: in a survey conducted during March this year, 22% of shoppers said the rise of mobile technology had increased the amount of shopping they did in-store, compared to online. By the year 2015, there will be two billion smartphones globally, which will account for 80% of all internet activity – at this point, beacon technology in retail may have transitioned from revolutionary to indispensable.

Jacquie Boast is senior vice president, global sales and marketing at Displaydata.

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