Beacons allow marketers to learn more about customers' in-store behaviour: how they move through the store, how much time is spent in front of specific displays, and which promotions capture their attention.
Beacons also allow for personalisation: in-store shopping assistants can greet you by name upon entering, bring you items previously viewed online (in your size), and know that you last shopped at the store two months ago. This leverages on data collected via mobile apps, and applies it to the physical store context.
Beacons also encourage engagement with consumers as brands can create a dialogue. Brands can obtain feedback from customers on their online or offline store experience and learn, in real time, which aspects are living up to expectations and which are falling short. Customers can also provide input on what they would like to see the next time they visit; giving them a voice in their shopping experience.
This type of engagement or personalisation builds trust and loyalty between brands and their customers. Brands can go one step further by rewarding customers for feedback, and showing them why they are pushed certain notifications. Customers are likely to appreciate the initiative taken by brands to cater messages to their needs and preferences, and also the seamless integration from online to in-store.
Big players such as Macy's and Target have already tested beacon technology, even Virgin Atlantic Airlines and Major League Baseball stadium have used beacons for different location-based campaigns. Beacon technology is extremely versatile and can be used for virtually any business.
So why is this year the 'Year of mobile beacons' as dubbed by Forbes?
"Beacons will drive $44 billion in retail sales this year, up from $4 billion in 2015."
"8 per cent of US retail locations were equipped with beacon technology in 2014, up to 32 per cent in 2015, and expected to reach 85 per cent in 2016." (UK Business Insider)
Why beacons
The main benefit of beacons is to target customers during that "micro-moment" - a term pegged by Google, it refers to the exact moment customers start thinking "I want to go there", "I want to see that", "I need this", "I want to buy it" and more.
Micro-moments is exactly when brands need to be ready, to be there when your consumers need you most.
Businesses need to understand that it's not whether or not to use beacons; rather, it's how beacons can be integrated into their overall marketing strategy. Brands need to find the appropriate technology to drive engagement between their brand and users, even if the latter is offline and/or not using their mobile device. This B2C engagement has to happen in the right place, at the right time and within the right situational context.
Thus, marketers must ensure that they have the right mobile marketing automation platform in place. This platform should enable their app to be picked up by the beacon signal, in a range where the user physically walks by, automatically triggering relevant messages sent to the user's device based on their preferences and contextual data.
Barney's 'Anything is possible' campaign
Barney's Manhattan flagship store has a fully deployed beacon network, focused on personalised content to seamlessly shape customers' online-to-offline experience. Barney's initially used beacons to offer only discounts, deals and coupons while in-store to "enhance the in-store experience". However, they decided to go beyond that, from simply emphasising sales efficiency, to nurturing brand affinity. One thing to remember is to stay consistent with your overall image, Barney's well-heeled customers are unlikely to expect promotions, thus offering only that seems to stray from their brand image. Instead, delivering content that reinforces the 90-year-old chain's refined and advanced aesthetic might be better appreciated.
Furthermore, Barney's has enough access to rich fashionable photography and A-list designers to generate alluring content to send to various shoppers, personalised based on their consumer data. Barney's seamless integration of beacon technology in bridging the online-to-offline shopping experience for their valued customers aims to make customers feel as though anything is possible.
London's bus app utilises beacons inside buses
Traditionally, London's double-decker buses were used purely as mobile billboards, but now, their interiors deliver ads to smartphones too. The location-aware beacon technology onboard buses allows the Bus Times London app to deliver real-time travel updates to users. Travellers receive contextually aware ads that capitalise on their exact physical context.
The bus app sends ads to passengers while leveraging on travel "dwell time", which is the 17 minutes spent on an average bus journey in London where passengers do nothing. It is likely that users will passively pay attention to these ads during this dwell time, and some ads are especially effective for tourists. This technology aims to combat the rise of ad blocking on mobile, claiming that clickthrough rates are "as much as seven times higher" than conventional in-app ads.
Limitations of beacons
Like any technology, beacons do not come without limitations. As beacon technology is still in its early stages, we can expect improvements and advancements to follow in the near future.
Firstly, beacons are not yet mature enough to be used for analytics. Thus, they aren't ideal for precise measurements, because they are only proximity sensors. As iBeacons have a range between 0 to 200 metres, and are only compatible with certain devices, certain data obtained might be inaccurate, such as the number of people in the proximity.
Secondly, the scope of beacon campaigns are limited, because it only works if users are using a specific app, such as Barney's or Bus Times London. Thus, beacon campaigns might not garner extensive reach. On the other hand, the customers targeted and reached are already interested in your brand and ads could increase their brand loyalty and lifetime value, making these customers worth investing in.
Lastly, beacon technology comes with implications for privacy. While many users want to receive relevant and informative ads, many also feel that it is not worth the cost of being tracked. This could greatly reduce the overall reach of beacons.
While beacon technology is still in the introductory stages and comes with certain limitations, there is huge potential for beacons to catapult businesses to greater heights. Not just within the retail industry, but for other businesses as well. The most important thing is to integrate beacons into your current marketing plan, and ensure consistency throughout your strategy.
• Huimin Yu is a marketing intern at global audience intelligence platform Yoose. Contact her at huimin.yu@yoose.com