How Retailers Can Bridge the Gap With Beacons

Location-relevant retail marketing is all the rage these days, in theory. In practice, the scale of these tactics is extremely limited and will take many cycles and refinements to produce an elegant consumer experience and effectively drive sales. Bluetooth beacons are the newest addition to the hyperlocal marketing landscape, and retailers need to start testing them now.

How are beacons different than other forms of hyperlocal consumer engagement?
Beacons don’t rely on the availability of ad space to reach a consumer, and therefore can go way beyond an advertising experience. Content can be delivered to a consumers’ mobile device that augments the shopping experience, bolsters the relevancy of the merchant’s real-time communications based on the consumer’s location and real-time behavior, and can be perceived by the consumer less as “marketing” and more as “helpful.” Beacons can turn marketing communications into a curated shopping experience.

Beacons also don’t rely on the consumer being actively engaged with digital content on their device in order to see a retailer’s message. If the retailer has successfully convinced the consumer to download their mobile app, which can be seen as a form of “opting in” to receive content, then the retailer can push messages to that device. In other words, it finally hits the use case we’ve been talking about for years: I’m walking down the street, I pass a sandwich shop and my smartphone buzzes with a message about a limited-time offer for a sandwich. This is huge! And if the message is tailored to the recipient based on their previous shopping behavior — a feat accomplished through use of point of sale (POS) or payment data in message targeting — the response rate can be off the charts. According to a Google study, 84 percent of shoppers use their smartphone during in-store shopping experiences, so the reach and scale is already high.

In addition to the marketing benefits, the retailer can also optimize their store layout and product positioning based on analysis of shoppers’ in-store behavior. Placing multiple beacons throughout the store can act like a grid of positioning points, triangulating the shopper as they move. Creepy? Maybe. As with any technology that “learns” about consumer behavior in order to optimize for the retailer, the promise of a more relevant and streamlined experience for the consumer can far outweigh the intrusiveness. Apple is now taking steps to ensure that behavioral data reaped through iBeacons will remain anonymous, creating challenges for the providers of this type of technology, and greatly reducing the creepy factor.

Lastly, beacons can be used to authenticate a consumer’s device for digital payments at the register. Last Fall, PayPal announced plans for this feature for merchants using their POS application and users of their consumer mobile application. More companies offering mobile POS and mobile wallet applications could follow suit. Mobile payments promise to tie offline spending behavior to online marketing engagement in order to determine marketing effectiveness for driving in-store sales. Add the beacon data to that mix and the retailer gains a 360 degree view of the shopper.

How are beacons changing brick and mortar retail forever?
The most important and far-reaching impact of beacons on traditional retail is that they bridge the gap between the physical and digital shopping experiences. Retailers are quickly adopting an omni-channel strategy, meeting consumers wherever they shop – store, PC, mobile – and beacons will help make in-store shopping as cost effective for the retailer as ecommerce. Converting in-store shopping behavior into “big data” will allow a national retailer to see trends across all their locations and optimize product choices, product positioning, and revenue. Beacons could bolster the brick and mortar parts of large a retailer’s business, and give pure brick-and-mortar retailers, who are typically smaller local businesses, the tools to compete with the national chains.

It will be some time before use of beacons to engage consumers gains scale and becomes common. The possibilities are big and so is the promise of beacons improving and defending the brick and mortar experience. Winning – and keeping – your business is now harder than ever. Beacons can make the fight a little easier.

Greg McAllister is the CEO of PushPoint, a company that provides financial institutions, businesses and marketers simple, location-based mobile marketing tools that reduce time and resources, help gain and retain customers, and ultimately grow business.