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Beacons - New Shopping Companion

In today's digital world retailers are focused to find innovative ways to engage with the customers in every opportunity they can. The industry has grown from traditional shopping to multi-channels like web, mobile and social. Retailers try to gather as much as data they can to engage with the customer in a meaningful way. Retailers connect with the customers in many ways like targeted promotions, cross-sell, upsell, etc in online shopping. When it comes to physical shopping in stores, it's always a challenge to understand the shopping behavior of a customer like the products he is interested in, time spent by him in a specific category etc.  Beacon can help us to address some of these challenges and this might be a good way of marrying digital and store experience and help with real world engagement opportunities.

What actually is Beacon? It is a small piece of hardware which can be pasted to the walls or racks in the store/premises and it connects with the customer mobile phones using Bluetooth low energy (BLE).



 When a customer walks into the store, the mobile beacon detects the phone using the app installed in their smart phones. Once the phone is detected, the beacon will send an identification to the phone and the app will redirect this information to the server hosted by the retailer. The server can identify the store and location with the received message and this can be used to send targeted message/promotion to the customer.

Users can follow the instructions mentioned below to use beacon:

    • Users can download mobile apps like Shopkick, Epicurious, Swirl etc. in their smartphones. Retailers can also build their own custom apps for android and iOS.
    • The Bluetooth should be turned on with Location services activated

Beacons and Retail:

Some of the major retailers have already started rolling out beacons in their stores. Apple has started using this concepts in their apple stores using iBeacon which is a version of BLE software and released with iOS 7. Apple uses this to push notifications to the customer as they walk around the store. In September, Macys' announced that it will roll out the beacons program to its stores using the app shopkick. Hudson's Bay Company (HBC) has announced to rollout the beacons programs in their selected lord and Taylor stores in US and Canada. Leading player like Hillshire Brands, American eagle, Walmart have also started the game with beacons.

Below are some of the focus areas by the retailers on this engagement:

Personalized communication: The beacons can be used to deliver personalized message like product communications, coupons, and promotions in that particular store or status on his store orders. Big retailers can engage with the customer real time and provide the personalized shopping feel like in a local grocery store/Mom and Pop stores.

 Powerful In-Store Marketing Tool: Retailers possess lot of data about their users through their online activity. They can interpret these online data like orders/wish list created by the customer and provide information on the top sellers in that category or create opportunity for cross sell or up sell on that items sold in that store.

Data Analytics: Beacon can provide insights into lot of data which can be sliced and diced to understand shopping behavior of the customer inside the store. How many times this customer has visited the stores, the time spent in different part of the stores, what they buy etc. This can also help to push targeted content for the customer thus encourage him to buy more.

Loyalty Engagement : Loyalty programs are becoming more popular among the retailers and also help to enhance the brand value and help customers with better rewards & shopping experience. Beacon technology can be integrated with the loyalty programs and provide them an excellent in store experience with the data collected on loyalty programs. For example when a customer enters the store the retailer can push customized message like "Welcome to store 238, Grab your white rebook shoes for 20% off on aisle 29" or "Welcome, Please spend additional $20 at grocery today to claim your 5% off on total order".

POS & Beacon: Beacon technology can be integrated with the POS system which can help to achieve touch less payments and more insight on the shopping behavior of the customer. PayPal is leading this space and it produces a USB device which is compatible with Erply, Leaf, Leapset, Micros, NCR, Revel, ShopKeep and Vend. PayPal Beacon detects a consumer using the PayPal app on their smartphone and shows customer profile on the POS system. If the shopper has enabled automatic check-in then the transaction is automatically completed without even taking your phone out of your pocket.

According to the article in Business insider it is estimated that beacon triggered messages influence up to $4 billion of total US store sales in 2015. This will increase up to $40 billion in 2016. With retailer giving more emphasis on personalized shopping it will be really interesting to watch how they use this mobile engagement.

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