Pinpointing Value: How Beacon Technology Improves the Retail Experience

Only a year ago, online and mobile shopping hit tipping points, overtaking brick-and-mortar shopping. Some analysts were sounding a death knell for the in-store experience. In part, this was due to growing customer demands for instant service accommodation, product availability, and an easy, personalized experience.

Yet, in the past year, the landscape has changed. Retailers that have been able to integrate online and mobile technologies into a connected customer journey that integrates the physical location have been able to actually offer more personalization and new buying opportunities. For example, solutions like Click & Collect allow customers to buy online and retrieve their purchase in store, often prompting additional sales because of relevant on-premise context marketing. In the store environment, automatic check-in using loyalty cards can notify employees about customers, informing a more personalized and productive shopping experience.

Beacon technology is another incredibly valuable step in the customer journey. Apple introduced ‘iBeacon’ technology in 2013. In 2015, it drove $4 billion in retail sales, and in 2016, that number is expected to reach $44 billion.[1] This staggering growth rate reflects how important it is for retailers to respond to their customers’ demands for a seamless and personalized customer journey between each channel from selection to purchase.

The value of beacon technology is similar to how Click & Collect streamlines online and onsite shopping, and how self check-in informs and personalizes the retail experience. By combining the power of mobile apps, beacon geofencing capabilities, and hyper-local context marketing it is revolutionizing how retailers can connect purposefully with customers in their vicinity.

How does beacon technology work?

Beacon technology orients mobile applications on a micro-local scale so it can push hyper-contextual content to a smartphone user based on his or her location. It allows retailers to leverage location-based data to interact with each customer. As a customer with the retailer’s app comes into proximity, the retailer can push relevant context marketing, offerings, prompts and messages.

The store app on the customer’s smartphone ‘listens’ for a beacon housed in the retailer’s platform and connects to it via a form of Bluetooth. It communicates relevant customer data to the central server. That connection then triggers an action like a relevant push message or special offer to the customer, personalizing the experience and providing incentives for them to shop.

What is the value of beacon technology?

The average customer is exposed to 5,000 ads per day. We have become masters of ignoring ads that are not immediately noteworthy, interesting, or relevant.

For customers, the messages received through beacon technology can help to inform the shopping journey. That can take the form of a useful in-store coupon, a shopping list reminder, or even a customized offer based on their prior purchasing habits. We are engaged where and when an offer or piece of information is most helpful. It cultivates a relationship with the retailer that benefits both parties.

For retailers, beacon technology is a permission based, dynamic and personalized way to communicate virtually with customers. By downloading the store app, individual customers have essentially ‘opted in’ to receiving offers and messages immediately pertinent to their retail journey. That gives retailers the opportunity to reach the right customer at the right time with the right offer – not unlike the experience customers have come to expect online, but in an environment where they can enjoy the tactile side of the shopping experience.

Retailers have no choice but to innovate ways for customers to have total choice over their shopping experience, enhanced with immediate and personalized incentives. Solutions like beacon technology, loyalty card check in, and Click & Collect achieve those goals because they give the customer every reason to remain loyal to and engaged with the retail brand.

Today’s retail environment is still changing. Customers want the best of every channel, and encouraging their loyalty is crucial to the retailer’s profitability. Qmatic can help you understand what resources can strengthen every touch point.

[1] How beacons – small, low cost gadgets – will influence billions in US retail sales; Business Insider, February 2015