Though they had a limited impact on last year’s holiday season, some expect 2016 to be a breakthrough year for beacons. Perhaps the most bullish proponent has been BI Intelligence, which believes the in-store devices will influence $40 billion in retail sales, a 10X jump over last year.
Yet, a quarter into this year it’s safe to say that they’re still not the shining light that some have promised. How can retailers jump start the technology. Here’s my thought: Beacons will become standard when retailers use them to identify their businesses in the same fashion they publish their address or phone number.
Here’s why: Beacons provide a very accurate signal about location information. In contrast to other location technologies that can provide an app information about the user’s location, the presence of a beacon can also trigger an app to perform a specific action.
Automatically initiated interactions are the ideal way to start online to offline (O2O) engagements. These interactions are not limited to a check-in, a review, tips, or something that will happen exclusively in the customer’s device. Beacons can trigger external events too e.g. place your favorite coffee order upon arrival. It is only a matter of filling the blanks in the sentence “When the individual is physically here we want them to immediately….” For that action to happen, two basic conditions must be fulfilled: 1) the customer must have a specific app installed and 2) the smartphone Bluetooth capabilities must be turned on.
We have chickens – let’s take care of the eggs
“Adoption” is not about how many companies implement a specific technology. The real test is how many consumers take advantage of it. In other words, it is good to know that certain supermarket chains implemented beacons, but I’d like to know how many patrons are using them inside their stores and for how long.
As mentioned before, one of the biggest challenges for beacons is that they require consumers to have a specific app installed. But remember, consumers have a myriad of apps already installed in their smartphones.
Now, in the same fashion that apps use location information, it is time to enable apps to interact with beacons. This will provide merchants with an incentive to install beacons that will talk with those apps, facilitating the O2O engagements that businesses are looking for.
Can beacons become a standard?
Last year Facebook started rolling out a free beacon program for selected businesses, mainly to deliver relevant place tips in the users’ feeds. If Yelp, Foursquare, OpenTable or any other platform would like to follow through, will the merchants need to install and maintain a different beacon for every app? NO.
Beacons will become a standard when the industry starts treating them as standard.
The win-win scenario will have the following components, 1) Any merchant that wants to have basic beacon benefits will have to invest a few dollars in the hardware. 2) In the same fashion apps have a place for claimed businesses to update their information, business owners will be able to input their beacon ID. That’s it! Now it is the customer’s decision to turn on features like automatic review viewing, easy check-ins, Facebook tips, automatic coffee orders, or any other action apps added to their functionality and the users desire to enable in their device.
The ripple effect of standardized use of beacons
We can discuss the pitfalls of this proposal. However, let’s focus on some of the immediate benefits we can foresee will happen.
- We take the burden from app developers to distribute, install and maintain special beacons
- We make it easier for SMBs to get into the beacons world, and offer tailored engagement events through apps their customers already use.
- Location-aware apps like Foursquare, Yelp, OpenTable and others, will be able to offer customized premium interactions for businesses with beacons, generating new revenue streams while creating unique O2O opportunities for merchants.
- We eliminate bogus businesses locations. How would all those locksmith fake locations be able to install beacons in fake addresses?
- We open the door to a much targeted and relevant ad delivery experience. For example, mobile ad networks may provide benefits to businesses that share with them their beacon id, nature of the business, etc.
- We educate consumers about beacons, making easier to offer customized projects to large retailers.
And these are just a few.
What I described above, involves mainly retailers and app developers. However, we need to keep in mind the most important piece of the puzzle: the customer.
If we want beacons, or any other location information technology to succeed, the minimum we owe the customer is transparency.
When we tell users that beacons don’t collect any private information, we are telling the truth (but only half of the story). Beacons do not collect any private information, but they can trigger an app to collect that information. Consumers must be aware of that fact.
Facebook goes a step forward towards the customer side by stating that “the beacons don’t collect any information from people or their phones or change the kind of location information Facebook receives.” In other words, the beacon doesn’t collect information, but we continue to collect information about our users as we did before. A much better disclaimer, but debatable if enough.
The principles remain the same
I wrote my first blog post on the value of location information and marketing back in 2008. I referred to Location Based Marketing as “the company’s effort to transform geographical positioning information into valuable and relevant data for a customer, to make a profit.” Since then, we have seen QR Codes, NFC, and other scanning efforts with an important objective in mind: to use relevant digital information to enhance the customers experience and sell them something here and now.
What changed since 2008? Only technology. The underlying marketing principles remain the same.
What’s your take?
Claudio Schapsis is the founder of Georillas, a strategic mobile/hyper-local marketing consulting practice. His customers range from multi-local chains i.e. Subway Argentina, multi-stores places i.e. Grand Central Terminal, and diverse sole location businesses in different verticals. He is a frequent guest speaker on mobile, hyper-local, and location-based marketing topics.