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Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

Beacon technology promises to turn the shopping experience on its head – or at least that’s what Retailers hope.

Beacons (the Apple beacon technology standard is called the iBeacon) are small and relatively inexpensive devices emitting low-energy Bluetooth signals that can be detected by a mobile app. If there are enough beacons concentrated throughout a retail store or other building, they can determine the location of the phone with pretty good accuracy as the carrier moves around.

If the phone owner also gives the necessary permissions, including an opt-in to receiving notifications from the retailer, it opens up a plethora of opportunities to put the shopping trip into technological overdrive. Here are the five most important.

Woman using smartphone in shop

1. Relevant messaging, or ‘proximity marketing’

Since the beacons can identify where the phone carrier is in relation to particular merchandise, they can be used to push marketing offers or provide product information to the customer that is location-relevant. If the retailer knows something about the customer – say, if the customer is a member of the retailer’s loyalty program and has a purchase history – the mobile marketing can be relevant to customer interests as well as their location in the store.

2. In-store navigation

The customer can easily locate sought-after items in the store by entering a product name and receiving directions to that product based on his or her current location. Or the customer can navigate turn-by-turn through a store in the same way he uses a car’s GPS system, receiving information about nearby products as he goes.

3. Beacons can be used by the retailer for ‘mobile analytics’

Meaning: Aggregating and analysing customer movements to improve store configurations and merchandise adjacencies. 

Information obtained from beacons includes:

  • How many customers went through the store
  • Where customers went in the store, which routes they took and where they lingered or moved passed by quickly
  • How many times each customer visited the store
  • How long each customer spent in the store.

4. Beacons lighting the way

Beacons can be used to encourage customers to enter the store in the first place. Currently, depending on the physical environment, beacons have a range of up to 70 metres. When a customer enters the perimeter of a store’s beacon range, they can by nudged inside with special offers or other marketing content on their mobile phones.

5. Contactless payments

With beacons able to form a link between a phone, equipped with payment app, and the store’s POS system, the customer can potentially use the phone to pay for items without ever going to a register.

So beacons hold out the promise of improving the shopping experience by fusing digital technology with the immediacy of shopping in physical space.

The customer can easily locate sought-after items in the store.

Not everyone is convinced

Issues remain, and those who say beacon technology is not an automatic home run have some compelling arguments. Privacy is a big issue, as is the potential for customers to feel like they are being constantly spammed – after all, how many people really want to be assailed with ‘relevant’ messaging as they walk through a store?

For those who do want to enable this brave new shopping experience, the need to provide a series of permissions to have the beacons go to work may be too much of a pain. For Android owners, Bluetooth needs to be on, location services accepted for the store app, and permission granted to accept retailer notifications.

Overcoming these obstacles will not be easy.

Verdict

In Australia, beacon testing is quietly underway among a few retailers but the pace is currently being set overseas. According to Business Insider, 32 per cent of the locations of the top 100 US retailers will have beacons installed this year, rising to 85 per cent by 2016.

That means a potentially monumental change in the shopping experience, and like most other trends, Australian retailers will eventually be compelled to follow it.

Can mobile marketing – or geo-fencing – pull customers into bricks-and-mortar stores?

Find out more about the enticing prospect for retailers and shopping centre owners.

Find out more

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