Retailers Look to Beacons for Enhancing In-Store Customer Experience

We have reached the day and age where a critical mass of consumers perform in-store shopping with smartphone in hand. Consumers use smartphones to communicate with friends, discover new outlets and, for the true tech geeks, pay in stores. With such powerful technology at consumers’ fingertips, wouldn’t it be nice for merchants to passively communicate with their guests while they go about their shopping?

Bluetooth low energy (BLE) and beacon technology make that possible. Designed for passing information to nearby mobile devices, beacons have created a new channel for retailers to engage with their customers. Consumers that opt into BLE services are able to receive timely, contextual information that can enhance the overall shopping experience at their favorite stores.

Beacon technology can be deployed in a variety of commercial settings, including restaurants, bars, concert venues, stadiums, airports and malls. I focus on the use of beacons in retail (including grocery and pharmacy) because I believe that to be the arena where merchants can realize the largest profits. Additionally, retail offers the widest range of use cases, from marketing to loyalty to customer service.

Take the large discount store that is eager to get a head-start in their holiday season promotion. To conserve valuable floor space at the front of the store, the retailer might decide to use beacons for pushing messages to guests that detail which aisles hold holiday-related items. These messages might also highlight specials on certain products or deliver digital coupons that can be redeemed at checkout.

Shopkick-iBeacon-2The above example hints at the massive potential of beacons as it relates to delivering relevant information and marketing content during the ‘search’ phase of the shopping experience. Beacons can also issue customer service memos to shoppers throughout the experience and evoke loyalty incentives after a purchase has been completed.

Many have pondered the use of beacons for payments. While beacons surely play a role in the payment process (i.e. pushing digital coupons to be automatically applied at payment), NFC appears to be a better technology for handling the actual payment execution.

The role of beacons, however, is vital in converting visitors into purchasers. In addition to the general marketing tools of deals, discounts and coupons, beacons can notify shoppers of opportunities for redeeming loyalty points on certain items. On the merchant’s side, beacons can collect data on customer behavior throughout the shopping experience, generating insights that can yield better marketing from management.

BLE and beacon technology has existed for some time but merchant uptake has been somewhat slow. A number of retailers have begun experimenting with beacons, including Duane Reade, American Eagle and Macy’s. Further, beacons have already been piloted at various sporting events, helping direct fans to their seats and automatically triggering a bar code upon ticketing.

The new communication channel created by BLE creates endless opportunities for merchants to engage with customers in the physical world. It’s only a matter of time before retailers at-large embrace beacon technology as their primary in-store marketing tool and kick off a new chapter in retail.

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