The Definitive Guide to Customer Experience

Download Now

COVID-19: Our operations are not impacted, and we continue to support our clients at full capacity.

Digital Marketing

Retailer's Guide to Beacon Technology

by Duff Anderson, on Nov 11, 2015


With the power to drastically enhance the customer experience, beacon technology offers a lot of potential to retailers.

Whether it's a simple welcome message, a coupon or a promotion on your mobile, retailers are increasingly trying to engage customers by enhancing the in-store experience by leveraging beacon technology.

According to Forbes, 59 percent of consumers carry a mobile device when shopping for groceries. This demonstrates the potential power of beacon technology to directly target shoppers on their mobiles to ultimately increase sales, retention and brand loyalty without the staff needing to do anything.

To help retailers navigate this important and burgeoning trend, here's a guide that will cover the essentials of beacon technology and suggest some best practices that will prove useful as the phenomenon evolves over time.

Beacon usage today

At the moment, beacon technology has not caught on in a dramatic way and for many retailers, its use is still in an experimental phase. According to a recent report from eMarketer, there is no shortage of hype surrounding beacons, with major players such as Google, Twitter and Facebook investing heavily in the development of these tools.

Retailers are currently in the research and development stage when it comes to beacons, meaning that brands are treading lightly and looking for the best ways to leverage the technology, rather than diving headfirst into the trend. Of all the use cases on the table geo-targeting and location-based notifications are the most widely seen, according to research from Econsultancy. 

“The way we want to leverage this technology in physical stores is by adding the elements that you typically find while online shopping — personal recommendations, for instance — to an in-store experience,” Target rep Eddie Baeb said.

eMarketer found that telecom companies are leading the way in terms of adoption for these types of notifications, with 23 percent of companies having already implemented solutions. Only 18 percent of consumer goods brands have made the move, while a surprising 8 percent of retailers have done so. Consumer uncertainty is surely playing a role in low adoption at the moment, but as brands look to create personalized experiences leveraging beacon technology, rapid consumer adoption is not far behind.

Adoption on the rise

As of 2015, the value of sales derived from beacon technology was approximately $4 billion, while the 2016 prediction places this value at over $44 billion. This proves that beacon usage is set for a sharp increase, and that retailers are quickly gaining confidence in the capabilities of the solutions. This means that adoption rates are sure to rise, and retailers must work to develop strategies that set themselves apart in a positive light. 

According to a Business Insider article, “Since beacon-powered apps will collect valuable data on consumers' in-store activity, they could result in highly personalized and targeted offers.”

eMarketer stated that one method in particular - native apps in conjunction with physical storefront ownership - will likely be the go-to strategy for many first-time beacon adopters in the retail arena.

Key trends taking root

While apps and storefront beacon usage is currently the status quo, there are a number of under-the-radar trends that are sure to take hold in a few short years. For instance, new devices such as wearables are opening up opportunities for new beacon connections, and retailers will create environments that interact with watches and wristbands to create even more personalized recommendations and promotions, according to eMarketer. 

"Anybody who has a Fitbit or an Apple iWatch now has Bluetooth turned on 100 percent of the time, all day every day- it opens new possibilities for beacons," stated Greg Ratner, co-founder of Troops, as quoted by the eMarketer. 

Mobile wallets will also soon be connected to the Internet of Things that so many retailers are striving to create in their storefronts, allowing for smoother and more seamless checkout experiences. The possibilities are endless to incorporate loyalty programs and develop more targeted promotions for shoppers that exhibit patterns in their browsing and buying behaviors. Also, beacon technology presents new ways for retailers to better understand the in-store experience with the ability to engage directly with customers for feedback while in-store.

What the future holds

While retailers may not have a clear path paved for them as far as beacon technology is concerned, it is certainly in their best interests to adopt these solutions as soon as possible and begin incorporating strategies that have proven effective thus far. 

"We are seeing more of our clients do pilots in certain regions on a smaller scale, where they can prove that a beacon technology or a certain coupon integrated into their stores work, and then they can roll it out further," stated Michael Puffer, director of mobile solutions and strategy at agency HelloWorld, according to eMarketer. 

For now, retailers should focus on the basics of beacon technology, but they need to be prepared to adopt next-gen trends as they solidify over the next several years. 

Image source: Jonathan Nalder

Duff Anderson
Duff Anderson

Duff Anderson is a visionary in Voice of the Customer research with over 20 years’ experience.

See why top brands choose iperceptions to help them improve the Customer Experience.

Learn More
The Definitive Guide to Customer Experience in 2020

Stay on top of CX in 2020

Our 55+ page Definitive Guide to CX looks at tips and best practices to include in your CX toolkit to build a winning Customer Experience program.
Download Now

Sign up for the latest updates from Astute.

iperceptions is now part of Astute.
We'll never share your information.