Beacons—the technology that sends welcome messages, savings coupons, and other information to a customer’s smartphone when they’re in or very near your store—is poised to become the next game-changer in retail. So far, beacons have proven to be fairly effective in increasing foot traffic and driving sales. In a recent report, BI Intelligence stated that beacons influenced over $4 billion in sales during 2015, and project that number will increase ten times by the end of 2016.
How beacons work
Beacon technology is fairly simple and straightforward. There’s only one piece of hardware involved—a small transmitter which retailers post in their store. Business owners log into their account to create welcome messages, coupons, and other incentive messages, which are then transmitted to the smartphones of any nearby shoppers who have the right app on their phone and their Bluetooth turned on. Some beacon apps allow shoppers to receive personalized discounts and offers based on their previous shopping behaviors, while others collect only very general data, such as the number and location of shoppers receiving beacon messages.
Coupons are the most popular type of message currently being sent via beacon, by both large and small retailers. However, there are other ways to use this technology, including inviting customers to attend in-store demos or other events, upselling seats at sports games and concerts, and providing in-store maps and other information without the need to use Wi-Fi or the customer’s data connection. Some retailers are experimenting with promoting loyalty program participation with beacon technology, for example by reminding nearby shoppers they could earn or redeem points by purchasing items currently on sale.
Choosing the right beacon for your store
Google, Apple, Facebook, and other tech firms have each introduced their own beacon offerings, and competition to be the dominant firm in this newly emerging sector is fierce. For this reason, several companies have made at least introductory levels of their technology available for free for retailers. Choosing which system is best for your store requires some level of customer knowledge, as well as prevailing tech trends for your region. Facebook, for example, has an almost universal audience, while Apple’s iBeacon may be the better choice for the retailer trying to reach affluent customers. A good best practice is to test the beacon system’s appeal to your customers at the free level first. If it’s working, then investing in additional transmitters may be a wise move.
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