What's Next for Beacon Technology in Retail?

10/20/2014
Beacon technology is ushering us into an era of completely customizable shopping.

In September, Macy's announced its plans to roll out the largest beacon initiative in the retail industry with its partner, shopkick, a shopping app that awards users points for entering participating stores.

Macy's is joining a host of retailers that have already made strides toward beacon technology, including Lord & Taylor, which announced that it would implement iBeacon sensors in its U.S stores.

Using the power of Swirl, an iBeacon marketing platform provider, Lord & Taylor can send customers push notifications about a coupon or a sale as soon as they enter the store. Lord & Taylor can also use existing customer data, such as the designer a customer usually buys, to alert the shopper about an ongoing sale once she nears that section of the store.

Companies are already seeing results from this cutting-edge technology. Hillshire Brands experienced a twentyfold increase in purchase intent for its American Craft link sausage products after deploying Apple's iBeacon system. Hillshire attracted 6,000 in-store engagements within 48 hours of applying beacon technology.

InMarket, a company that installs iBeacons in grocery stores, said the technology increased brand awareness and overall sales throughout the campaign.

Hudson's Bay, another retailer, has implemented beacon technology in its Canadian stores. Michael Crotty, the company's executive vice president and chief marketing officer, said the company "recognizes the appetite for mobile experiences that cater to customers' immediate needs and preferences while also providing a seamless and effortless experience."

But for all the attention that beacon technology is getting, it's still being deployed at a fairly slow rate. When are we going to see beacon technology rolled out in every store worldwide? Is the technology really "there" yet, or is it still too impractical to deploy on a large scale?

Well, yes and no. Beacons themselves are currently serving their purpose and doing it well, but smartphone technology needs to evolve to interact more effectively with beacons. Even within the Apple Store, phones may have difficulty picking up beacons and fail to send notifications.

To take full advantage of this burgeoning technology, retailers must have an app with which beacons can interact, as well as a database of users who have downloaded the app. Smaller retailers may have difficulty getting involved with beacons at first; many don't have enough mobile users or don't have an app at all.

When smartphones catch up to beacon technology, retailers and businesses of all sizes will be able to connect with customers on a one-to-one basis, helping loyal customers become even more loyal.

Here are just three possible future applications for beacon technology:

Pairing with deal companies
By partnering with a deal company such as Groupon, companies could take advantage of beacon technology with a lower upfront investment.

For instance, if a retailer wanted to set up a temporary sale, it could connect the store and its items with Groupon or another coupon company. After the deal is set up, the coupon company could send users notifications on their phones with deals and coupons corresponding to certain items in the store.

The relationship with discount companies would allow smaller retailers to share more in-store deals with their customers without spending money developing their own app and urging users to download it.

Encouraging customer engagement
The restaurant app Dash (developed in conjunction with Prolific Interactive) already uses beacons to allow diners to check in and pay at restaurants. In the future, retailers could use beacons to determine when customers are nearby and ask them to check in on social media or even share deals with their friends.

Giving customers a mobile guide
Some galleries and museums already use beacons to provide visitors with additional content, including videos, full-screen photos, and descriptions of locations that provided the artist with inspiration. Why couldn't large stores apply this same technology to show customers video demos of products or direct them to the nearest checkout station?

Estimote Beacons, a beacon hardware manufacturer, recently launched indoor features that will allow beacons and apps to precisely map the interior of a location. These features can provide businesses with data about shopper behavior by tracking a consumer's path to determine engagement with displays, purchase conversion, and other valuable information. On the customer side of things, the technology can guide them through the store and provide assistance along the way.

At my company, we're already playing with beacon technology within our office. We use it in conjunction with our welcome app as a way to greet employees when they come into our office in the morning. As employees walk through the front door, the app says "good morning," their respective personal theme music begins to play, and the app delivers information about what's going on that day.

As it stands now, beacons are limited by smartphone technology, but in the future, there may be great opportunity for retailers to optimize their store layouts and displays based on data collected from beacon technology. Best of all, beacons will have a transformative impact on the shopping experience for the customer. And when customers get a more personalized experience, they're likely to be more engaged, shop more often, and remain loyal to retailers that can meet their needs.


Bobby Emamian is the co-founder and CEO of Prolific Interactive, a strategy-led mobile agency headquartered in Brooklyn, New York, with additional offices in San Francisco. Emamian and his team have worked with companies including ModCloth, Thrillist, Rent the Runway, Hewlett-Packard, and the NBA.

Paul Miard is a senior iOS engineer at Prolific Interactive.
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