Retailers are turning to beacons to make the shopping experience both more personalized and more efficient. In return, they hope to earn deeper customer loyalty and gain access to a trove of consumer data.
Other industries have invested in beacon technology as well. Restaurants, airports, sports venues, hotels, and more are all hoping that beacons will allow them to creatively and effectively identify, target, and serve customers. Estimote, a company offering beacons and stickers compatible with both Apple’s iBeacon and Google’s Eddystone formats, helps them do just that.
Estimote co-founder Steve Cheney talked to Street Fight about the evolution of beacon technology and the trajectory of its adoption.
First the adoption question: What’s been holding beacons back from breaking through to the mainstream and what factors will push them past the tipping point?
At Estimote, we struggled with why everyone thought that they could just place [a beacon] and it was going to work. I finally figured out why: It’s because beacons started as an Apple thing, and nearly everything Apple does is a finished consumer product that works perfectly right out of the box.
iBeacon wasn’t like that; it was a developer framework that required developers to learn how to use it, build security around it, and deploy it at scale. There was never an unboxing moment where there was this technology you could place on the wall and it was going to skip five steps and solve some problem.
That’s why Apple didn’t talk about it much. It kind of got teased out. But the players in the market that are really bullish about beacon technology have been building, iterating, and doing amazing things since then, and now we feel like the tech is hitting primetime. From our perspective, we’ve already reached the tipping point for beacons.
If you’re a small business, the initial hype surrounding a new technology can be intimidating, and you might question if and when you should apply it yourself. In terms of beacon tech, where does the value lie for SMBs?
The dominant thought has been that the platforms that touch SMBs would apply beacons at scale and make it really simple for the merchant to get something going. That’s awesome in theory, but in practice, what is execution dependent on? There still has to be consumer value. We don’t think the value necessarily lies in proximity targeting or advertising.
The thing that people have really been obsessed with is the attribution loop problem. Historically, there’s never been a good way to attribute what you do in the physical world to what you do online. If you search for a coffee shop on Yelp and then arrive at that destination, isn’t it crazy that the coffee shop doesn’t know you got there through Yelp? And Yelp doesn’t even know that you went there. Beacons are the answer to that.
Beacons could automatically know that you’re there and help push notifications if you want to pay or use a loyalty card. We haven’t seen that happen at the platform level yet; Apple and Google haven’t done anything. But the pieces are in place for that. I would guess that over the next 12 months you’re going to see some brands and their marketing partners jump in headfirst.
I’ve noticed the conversation around beacons has shifted from seeing them as a marketing tool to how they can influence shopping behaviors and make processes more efficient for consumers.
Advertisers and marketers are focused on two key objectives: How can I get in front of my audience and how can I get immediate buyability? The standard for new technology adoption is whether it completely changes the behavior from what we had to do before. It’s evolved to include more thoughtful product design, not just getting ads while standing in an aisle full of detergents. No one wants that.
When it comes to tagging individual objects with beacons, what’s valuable for brands, local businesses, and consumers about that kind of ultra-specificity?
You can attach a pretty darn cheap beacon to an item, and now it’s smart and you can actually search for it. That can be valuable in certain applications. Maybe there’s a blue dot navigating you to an item, or you pull out your phone and hey, these seven items you put on your shopping list are right around you. Smarter retailers [are strategic about] the location of items in a store, and beacons are an added layer that makes the whole thing light up.
We think there’s an interesting case for making certain objects connected on their own. Think of it as search for the physical word. It’s a bit abstract, but the premise is very clear: The online world that we’re used to has tons of available information, but the physical world is this place we’re trying to navigate at all times, and your phone doesn’t have any context about it. Beacons are one way to solve that.
Annie Melton is Street Fight’s news editor.
This interview has been edited for length and clarity.