With advances in beacon and mobile technology, retailers now have the tools to breathe new life into their bricks-and mortar-business by creating mobile-driven in-store experiences.

The integration of mobile into customers’ in-store shopping habits is set to increase this year. This ultimately puts retailers at a disadvantage – customers are now able to compare products, find discounts or purchase from competitors, putting retailers’ future in-store purchases at greater risk.

Research firm Econsultancy found that 35% of smartphone users fire up their devices to look for information while they are shopping in-store. 63% of this time is spent comparison shopping while the remainder is spent looking for coupons or looking for product information on another retailer’s website.

To help fully engage with customers in-store, retailers need to provide the personalised experience that their users have grown accustomed to online. To do so, retailers can implement cutting-edge technology to deliver the desired experience in a physical space via the same tools customers are using for comparison-shopping: their smartphones.

HOW DO THEY WORK?

Bluetooth Low Energy (BLE) beacons and Apple’s iBeacon protocol are quickly entering the mainstream world of shopping, offering marketers another channel to improve the mobile shopping experience.

Emerging in the early 2000s, BLE was the first Bluetooth technology that used less power to allow mobile users to navigate and interact with specific regions geo-fenced by low-cost signal emitters called “beacons.” This technology became widely embraced after the launch of Apple’s iBeacon in 2013.

A beacon is a piece of hardware that, when attached to a store wall, uses battery-friendly, low-energy Bluetooth signals to interact with a compatible app on nearby customers’ phones to transmit personalised discounts, rewards and recommendations. Ultimately, an iBeacon works the same as any other beacon device, where the wireless devices transmit BLE signals via radio waves to a customer’s personal device, which in turn instigates a customised call-to-action. iBeacon is simply an Apple trademark for its implementation of BLE beacons. Despite being developed by Apple, iBeacons are recognized on other platforms, such as Android and Windows, as long as support for BLE is included.

To integrate beacon technology into a retail environment, a store must be assessed in order to ensure the necessary number of the devices are placed in the appropriate locations. Despite its many benefits, at present, there are a few teething problems with iBeacon. For instance, there has been a significant margin of error when it comes to proximity calculations to accurately derive positions.

Without strategic planning it can be difficult to estimate the number of iBeacons required for a store environment. The next element is the mobile app. iBeacon IDs must be configured for that app and the app must have the required features to display the actions triggered by the iBeacons.

THE BENEFITS

When used effectively, beacon technology is able to not only amplify the shopping experience, but also connect with a customer at the most opportune moment. Sending timely and relevant information to customers’ devices could fundamentally change the way people shop.

Receiving shopping recommendations that are tailored to their own personal likes and dislikes will mean that shoppers can connect with a retailer like never before. This enhanced connection could prompt increased brand loyalty if nurtured correctly.

THE CHALLENGES

The idea that customers can be sent highly relevant notifications on their mobile phone as they walk past a shop window or stop at a specific shop display is enormously attractive to retailers. But with that potential come a multitude of questions for both consumer and retailer. Will my privacy be compromised if I sign up for these messages? Will notifications that I don’t care about bombard my phone? How do I establish which notifications are appealing and how frequently they should be sent?

There is a very thin line between providing a valuable service that boosts sales and spamming consumers with messages they just don’t care about. If a brand oversteps that line, it could be detrimental to a customer’s perception of the brand when it might have been neutral or positive before.

In order to navigate this tricky situation, retailers need to plan out their end goals before launching a beacon programme. They should also realise that a good deal of testing is required to optimise the beacon range and signal frequency before expanding the technology to additional locations.

The key to a successful beacon roll-out is using the technology as part of an overall campaign or service, rather than as an end in themselves. The objective should be to engage the consumer, understand them and improve the in-store experience overall. This can’t be done with beacons alone.

As with any new disruptive technology, brands will need to reassure their customers that it is not just beneficial to their shopping experience, but also secure.

RETAIL USE CASES

Half of the top 100 retailers in the U.S. started testing beacons in 2014 and are expected to have the new technology installed in one-third of their store locations by the end of 2015.

A beacon situated in the appropriate store location can reward loyal customers by welcoming them back, or if they are a new customer, the signal will detect this and the mobile app can welcome them for the first time, alerting them to any applicable promotional offers. Additionally, if a customer has any products in their app wish list, the app could alert them that their desired items are in stock in their size upon entering the store. Or, if the product is out of stock, the app could ask the customer if they would like to order the item while in-store, ensuring the customer is not lost to competition as soon as they step outside.

The beacon opportunity is becoming increasingly significant as mobile phones become a more central part of the in-store shopping experience. According to Accenture, as much as 73% of in-store shoppers already prefer learning about promotions and products from their smartphone rather than from a sales associate. With beacons, even when a sales associate is nowhere to be seen, the customer still feels engaged and the store is able to be attentive through technology. Beacons enable retailers to merge the in-store experience with the personalisation characteristic of online shopping.

There are already a number of retail use cases for beacons and with the development of mobile features, such as Apple Pay and E-receipts, we are only starting to see the beacon potential. Both Macy’s and Apple have already integrated a beacon solution into their US stores, where consumers can interact with them in all kinds of scenarios. In the UK, John Lewis, Waitrose, Tesco and several other retailers are trialling the technology. Virgin Atlantic and British Airways are also piloting beacon technology at Heathrow Airport. Customers using either airline’s iPhone app will receive ‘push notifications’ when they arrive at the airport informing them when their gate is open and when the aircraft is boarding.

CONCLUSION

Over the next few years, beacons are expected to become a major retail trend. They are useful for pushing product information and offers, helping customers locate items, allowing them to “page” store associates, and even support checkout on-the-spot. One of the main benefits of beacons is that they can track a customer’s journey from the moment they enter the retail environment meaning that retailers can gain significant, valuable insights into how customers shop, what decisions they make and how well they convert. Online retailers have benefited from this type of analytics for years and now the physical retail space can also leverage this advantage.

When used correctly, beacons can enhance the in-store experience by providing customers with the personal experience they have grown accustomed to online.