Beacons—those little devices that send signals to Bluetooth-enabled technology, such as smartphones, when a shopper is within its range—hold the potential to change the way brands from all industries connect with consumers.
According to a recent study by InMarket, people who receive beacon offers and promotions are 19 times more likely to interact with the advertised product. To date, however, beacon marketing is nowhere near mainstream—yet. So what’s ahead for the location-based technology? CMO.com reached out to industry experts to find out.
Puneet Mehta, co-founder and CEO of MobileROI, told CMO.com:
Beacons will be leveraged across many industries to eliminate friction in the customer journey, from discovery to contactless payments. While the retail and sports industries have been the early adopters, we will see other types of brands–CPG, travel, petroleum, health care, real estate, auto, and more–bring this technology into their marketing strategies to create more engaging customer interactions.
As adoption becomes more widespread, I foresee a period of consumer pushback as they will be bombarded with messages, irrelevant except for their immediate location. This will lead to some brands abandoning beacons due to low ROI, paving the way for the marketers who can move beyond simply location to create really personalized and contextual experiences triggered by beacons. We will move from “come in for 5 percent off today” blasted to everyone to “the jacket you saved on your wish list is on sale today” sent just to me.
Once brands have in place a centralized system of engagement, beacons will also be leveraged for much more than disseminating offers and simple messages, and instead unlock new, richer experiences. Beacons by a hotel elevator will push the in-room dining menu to guests who were flying over dinner or send a new video of a new car when a potential buyer is checking out the model in a dealership.
We have not yet scratched the surface when it comes to the potential beacons can play in the customer experience. It’s going to be an exciting time for marketers as they look for ways to bridge their customers’ online and offline worlds to create truly exciting and engaging customer experiences.
Carin van Vuuren, CMO of Usablenet, told CMO.com:
Beacons are cost-efficient and easy for retailers to adopt and integrate into their multichannel strategy. Beacons are great additions to a retailer’s existing app because location and personalization are essential features to an engaging customer experience. Beacon technology is all about precise location and the ability to collect valuable consumer data that can be used to enrich and personalize the experience. As beacon usage continues to expand, we’ve seen a few interesting use cases, but most retailers center on timely promotions and initiatives aimed at bringing a higher degree of personalization to the in-store experience. Some retailers are using beacons to enhance in-store grocery shopping by delivering a map to all of those items in the store and alerting the shopper when they are close.
Beacons give brands the opportunity to transform everyday experiences into something differentiated, whether providing keyless hotel room entries or presenting real-time deals. The University of Mississippi (Ole Miss) is leveraging iBeacon technology to enhance the fan experience during sports events and link to a rewards program. These experiences show the promise of beacon and demonstrate how the technology continues to blur the line between online and in-store commerce. It has become clear that beacons are full of potential, but the jury is out whether mobile users will continue to see their value once the novelty factor has worn off. Ultimately, we believe the key to effectively using beacons is to consider how they enhance the utility of an experience so that the push notifications from the beacon will become worthwhile information to the user.
Jeff Hasen, mobile consultant and founder of Gotta Mobilize, told CMO.com:
I remember interviewing Patrick Flanagan, a vice president from Simon Malls, for my "Mobilized Marketing "book. He talked of possible ways to get more folks to come shopping. One, he said, was to pick up the mall and move it to a better location in town. Of course, that wasn’t viable. Two, he said, was to change out the store mix in the mall. But, he said, that was a long and difficult proposition. The third, and best way, was to use mobile to drive traffic and more sales.
Beacons are the latest and brightest hope for brick-and-mortar retailers like Simon, which recently expanded its beacon network arrangement with Mobiquity Networks to 240 malls. Why? Pre-recession, during the recession, and post-recession, consumers want deals. But they need to be relevant. Three dollars off of a pizza available 50 miles away isn’t just an annoyance for the consumer, it’s a stupid use of marketing dollars.
But you have something when you combine location, an individual user’s past shopping behavior as seen through app activity, and permission given by a mobile user to be sent compelling information and offers.
Of course, marketers need to be wise and always provide value to the mobile user. Just because an opted-in consumer invites you into their house, so to speak, it doesn’t mean that you can stay as long as you want
Mark Asher, head of market intelligence and strategy at Adobe (CMO.com’s parent company), told us:
Beacons are a great example of how the Internet of Things is becoming a reality. These small, battery-efficient devices are installed inconspicuously indoors and make it possible to locate people via their smartphones or other Bluetooth-enabled devices. Beacons solve a major problem for marketers–delivering local and hyperlocal marketing often breaks down when a smartphone-carrying person walks inside a store, mall, airport, etc.
Once a person enters a beacon-enabled zone, they can be served offers, promotional material, reminders, and other notifications. Smartphone users must have their Bluetooth radio-enabled, download the retailer’s (or beacon provider’s) app, and login or opt-in. That may sound like a lot of friction, but there is good evidence that beacon-based campaigns increase click-through rates and in-store purchases, and they may help decrease showrooming (where a consumer purchases a product online at a cheaper price right in the store aisle).
As a result, there has been a lot of beacon deployment in retail locations over the past year, including Apple Stores, Tesco’s One Stop stores, Safeway Stores, Lord & Taylor, and HBC Stores, with many more to come. Factories, airports, and hospitals are also deploying beacons to be used as electronic time cards to provide real-time directions to connecting gates and to download/review patient files, respectively.
However the story plays out, beacons are a great example of how our world is becoming increasingly instrumented. For marketers, the key issues are how to coordinate the increasing number of digital touch points into cross-device/cross-channel campaigns, and how to use all the data generated by these beacon experiences effectively.
Dave Zinman, CEO of Infolinks, told CMO.com:
Beacons are just one example of the wave of technology that will be deployed pervasively across physical objects. Today, we see only the whitecap, or the tip of this wave, in the form of wearable devices, like the fitbit or fuelband. In the future, the Internet of Things will see intelligent communications devices deployed across a wide range of physical objects. Retailers already deploy such technologies to improve logistics, and it is entirely logical that they would also deploy connected devices and enhanced tracking technology in-store. According to a recent Shop.org survey, however, broad deployment of beacons is still far off.
By 2016, the conversations and planning around the use of beacons will be much more sophisticated, and I would expect retailers to be utilizing in-store beacons in the same way they use pixels for ad tracking and Web analytics, to understand traffic flow and interpret causality from marketing. Beacons will be one more step in answering John Wanamaker's challenge: "Half the money I spend on advertising is wasted; the trouble is I don't know which half.
Jim Meckley, chief marketing officer of Mobiquity Networks, told CMO.com:
At its core, a beacon is an enabling technology. Beacons allow mobile apps to determine a mobile consumer’s indoor location, and more importantly provide the apps with contextually relevant information about the user’s immediate environment. Deployed creatively and in concert, apps plus beacons provide a powerful opportunity for retailers and brands to connect with their “fans” in a highly personalized way. The best applications of this emerging technology will overlay an app’s “awareness” of its user’s preferences with the insights a beacon network can provide about the user’s immediate environment to deliver truly customized experiences in real-time.
Compelling results are here today; hence, more retailers and brands are moving from testing to full deployments rolled out to get highly desired business results–increased sales and loyalty being the outcome. As the beacon ecosystem evolves, so will the “engines” that apps can use to configure personalized content in real time based on the context of the user’s location. Mobiquity Networks’ expanded partnership with Simon Malls to more than 240 locations is all about providing this capability to Simon’s retailers and brands. It’s about delivering a powerful tool for mobile engagement focused on improving the shopping experience and delivering value to mall visitors–ensuring that brick-and-mortar retail maintains its dominant position in the hearts of shoppers.
Another key to realizing the potential of beacon technology will be the ability of advertisers to deploy campaigns at scale, which is critical to make it practical to compete for the advertising budgets of traditional media spends, such as TV, radio, and print. The first experiments with beacons in retail have entailed individual store implementations. Wide adoption by the advertising industry will require a national network of beacons, like the one that Mobiquity Networks has built, that has the potential to engage with hundreds of millions of users in relevant locations.
Jay Whitehurst, president of Commercial Software Group, TeleCommunication Systems, Inc. (TCS), told CMO.com:
The economics for beacon technology really come to life when it is used for indoor marketing and data collection. The well-known example is of department stores, which will be able to track customers and target advertisements to specific buying habits. Museums, subways, and airports could track where people go and then use the data to improve traffic patterns, enhance visitor experiences, and increase revenue with better kiosk or advertising placement.
A concern, though, is that beacons have the potential to be outdated relatively quickly. While in tests the technology came out the victor in location accuracy, it is labor-intensive and expensive to implement. Technologies that use existing infrastructure, like radio frequencies or magnetic fields, will likely be far more cost-effective to deploy.
Regardless of the indoor location solution, it always comes down to a few key points. What is the accuracy and how precise do we need it, what are the costs, and finally the benefits associated? Right now beacon technology is the clear winner.
Mike Wehrs, president and CEO of Scanbuy, told CMO.com:
Beacons are the latest shiny objects on the mobile engagement trigger front. They offer incredible promise if understood and properly integrated and/or used for the purpose they uniquely solve. What is critical is that they are one part of the mobile engagement trigger landscape. Beacons are part of that family of technology, and they are not a silver bullet. A beacon adds another set of data about what a consumer is near and whether they may be interested in more information about what they are close to or passing by. It does not replace a specific action by a consumer to “ask” for more information about a specific product–for example, by scanning a barcode or an NFC-enabled product. Those are specific actions, and there is no ambiguity. With a beacon you know a consumer may be within six to 10 feet of a product, but you don’t know exactly what product within that distance they may be interested in (consider how many items are in a grocery store in a 10-foot radius). We view beacons as making mobile engagement even more targetable for each consumer, and, when used as part of the mobile trigger mix, consumers will find it a helpful addition to their mobile lives when integrated with a system that uses that beacon information intelligently.
See what the Twitterverse is saying about beacons and other proximity marketing technology: