Why beacons’ bright light dimmed in 2015 – and what’s next

Discussion
Dec 22, 2015

Through a special arrangement, what follows is an excerpt of an article from Retail Dive, an e-newsletter and website providing a 60-second bird’s eye view of the latest retail news and trends.

The use of beacons was one of this year’s hot retail topics. But while some still say their ubiquity is just a matter of time, others believe their utility is more limited than initially thought.

"I think that what retailers are discovering is that beacons may not simply be yet another channel through which promotion and messaging get shoved down to shoppers," retail futurist Doug Stephens told Retail Dive. "I think we’re going to mature beyond that."

Simple tweaks seem to be in order, like making sure batteries are charged and antennas are properly oriented without interference. Sometimes, beacons will greet customers repeatedly if they happen to pass near the entrance. To communicate, a retailer’s app must be downloaded onto the shopper’s phone and their Bluetooth connectivity must be on.

Man receiving offer

Moreover, many customers find getting a coupon for an item they’re looking at can be creepy.

Yet, while beacons may be falling flat as a marketing tool, they could remain valuable to retailers as a source of data.

"Shoppers are looking for information about price, reviews, performance," Mr. Stephens said. "Retailers haven’t been good at consistent sales floor support, but beacons could be a great way of providing information, and of measuring which products they’re interested in."





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A more refined approach may be underway at Target, which is working with Point Inside to map each of its stores.

Point Inside CEO Josh Marti believes beacons can help a retailer reorder a customer’s shopping list, better understand how to dispatch associates in busy times, or help shoppers know if an item is in stock at a nearby store. Even better, physical retailers can take a page from Amazon and suggest other items that are also in-store using machine learning technology.

"You can actually use shoppers’ mobile searches and what’s on their list to project their location in the store. You don’t necessarily need beacons," he said.

Should retailers be thinking about using beacons as more of a shopper assistance tool rather than a promotional one? Are beacons already showing their limits as in-store marketing vehicles?

Braintrust
"Beacons are only part of the overall equation of consumer experience in stores. The key is creating consumer value that promotes adoption."
"Beacon technology will never reach its potential if 1.) its usefulness requires downloading an app onto your mobile device and 2.) the technology is simply used to push uninvited and unwanted promotions into the face (device) of the shopper."
"The limits to beacons are simple. The shopper has to download the retailer’s app. The shopper has to open the app. The shopper has to have their Bluetooth on."

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20 Comments on "Why beacons’ bright light dimmed in 2015 – and what’s next"

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Chris Petersen, PhD.
BrainTrust

Beacons are only part of the overall equation of consumer experience in stores. The key is creating consumer value that promotes adoption.

Beacons as a marketing device is a classic case of retail-centric, one-way communication trying to influence consumers through yet another promotion. If the beacon offers are repetitive or irrelevant, consumers will quickly tune them out or turn their phones off entirely.

Navigation assistance is a good example of a consumer-centric value add. Especially in very large stores and malls.

The future of retail stores will involve multiple technologies: Wi-Fi, Bluetooth, even the LED lights in the ceilings. And most importantly, the app or portal where the consumer has the option of how and when to engage.

Gib Bassett
BrainTrust

I think they can serve either function. The issue is that just like other digital engagement methods (like email for example), the opportunity to engage 1:1 with a consumer initially generates excitement around the promotional possibilities by marketers. What happens is that too many focus on the push opportunity at the expense of relevancy and thoughtfulness. Beacons are only as useful as the analytics that inform them as a touch point in the consumer journey. That’s probably something we will see happen in 2016 by smarter retailers.

Adrian Weidmann
BrainTrust

Beacon technology will never reach its potential if 1.) its usefulness requires downloading an app onto your mobile device and 2.) the technology is simply used to push uninvited and unwanted promotions into the face (device) of the shopper. This technology should enable relevant communication that today’s shoppers are actually looking for: product information, price (and comparisons) and reviews. Once you provide the shopper with valued insight, then and only then should you offer some “reward” for their interest and time. Give your brand and your storytelling a reason to exist, then offer a promotion.

Proximity marketing and all of its supporting technologies can provide an exciting implementation to develop and activate full turnkey consignment retail. This would be ideal for brands, retailers and shoppers alike!

Gene Detroyer
BrainTrust

The limits to beacons are simple.

  1. The shopper has to download the retailer’s app.
  2. The shopper has to open the app.
  3. The shopper has to have their Bluetooth on.

I believe that this is a behavioral issue that is very challenging to overcome. Can the retailer offer value enough with this tool to change a shopping habit?

Dr. Stephen Needel
BrainTrust

Retailers should be thinking about dumping beacons. We’ve seen study after study that says the use of smartphones in stores is at best limited, perhaps with the exception of high-end electronics (perhaps not). It’s an expensive technology requiring a lot of effort by the shopper with limited benefits to them.

I’d love to hear a retailer tell us they’re making money from this from having done a proper test, not just a “we think we’re making money” testimonial.

Ryan Mathews
BrainTrust

Sure … I mean if consumers really find beacons generating coupons too intrusive (and I’m not sure I buy that argument) then they will love the idea of being digitally stalked as they shop!

Beacons are another example of why just because you can doesn’t mean you should. The problem with many technologies is that they function as “bolt-ons” and rather than creating a more seamless and augmented shopping experience, appear to be what they are — marketing toys run amok.

Retailers have to learn how to take integrative approaches to creating shopping environments that function as commercial and social ecosystems for shoppers.

The limitations of beacon-generated coupons (again, if indeed accurate) will apply to “helping” shoppers navigate the store. After all what’s more manipulative than giving you a coupon just because you are standing in front of a shelf? Oh yes, directing you where to walk and shop.

Cathy Hotka
BrainTrust

I talk with multiple retail CIOs a week, and none of them identify beacons as one of their most promising opportunities. Their far more pressing mandates are to enable cross-channel commerce, shore up data assurance and create enhanced customer engagement. There’s a big gap between the gee-whiz technologies that capture the imagination at trade shows and real-life realities.

Ben Ball
BrainTrust

As long as they function as advertised, technologies seldom “fail.” Rather, they are misunderstood and misused. Beacons are suffering the same fate almost all new technologies introduced into retail suffer — retailers see them as one-dimensional and having only one of two possible useful functions. Cut the cost or cut the price.

Ken Lonyai
BrainTrust

Beacons fell flat because retailers have a “monkey see, monkey do” approach to technology rather than thinking of (dare I say) innovative uses for them. In most cases they have been trying to get their mobile up to speed by leveraging beacons as yet another excuse to pound couponish offers into shoppers.

The technology has so many other possibilities for welcomed interactions that hopefully some retailers will wake up and explore them.

Ed Dunn
Guest
1 year 6 months ago

IMO, beacon implementation models in retail are overdone for such a straightforward technology.

Only one beacon per physical section/department and use the one beacons to showcase items in that one physical section/department. Some stores like GameStop may only need one beacon due to the ~1200 square feet size.

Avoid battery-based beacons and use USB-powered beacons or hardware that can act as a “beacon server” — most late model PCs can perform this task. This is very important as battery-based beacons have a fixed ID and enterprise-level retail IT cannot track every beacon ID in every store effectively. But with a PC “BLE server,” the enterprise or central office can manage a beacon IDs from a central location and manage the mobile app beacon identifier better. This is the core limitation of enterprise beacon rollouts.

Avoid using “push marketing.” It never worked in 1995 and it will not work now. Instead, use contextual marketing to showcase what is interesting in the area instead of push discounting.

Lee Peterson
BrainTrust

Just goes to show you, you can have all the whiz-bang technology you want in-store, but if you don’t cover the fundamentals well, it won’t matter. Great associates, story-telling merchandising, easy way finding, awesome ambiance, and speedy and friendly checkout all come way before beacons to me.

Naomi K. Shapiro
Guest
Naomi K. Shapiro
1 year 6 months ago

The answer was in the article:

“Shoppers are looking for information about price, reviews, performance,” … “Retailers haven’t been good at consistent sales floor support, but beacons could be a great way of providing information, and of measuring which products they’re interested in.”

Beacons can help a retailer better understand how to dispatch associates in busy times, or help shoppers know if an item is in stock at a nearby store. Even better, physical retailers can take a page from Amazon and suggest other items that are also in-store using machine learning technology.

Mark Price
BrainTrust

Beacons have three major uses: research into consumer traffic behavior, in-store customer service and promotional delivery. The first use is often underrepresented — understanding customer flow patterns through a store and the amount of time they spend looking at specific shelves. By understanding customer behavior, retailers will know which shelves are confusing and which products to better merchandise in proximity. In addition, a customer spending a long time at a shelf + no purchase from that shelf = out-of-stock or some consumer confusion. Fixing that problem has potential to actually drive incremental revenue.

Consumers will appreciate in-store delivered coupons — Starbucks and Target have shown that. With the appropriate permissioning of course. I would imagine that tech-savvy Millennials are the first to adopt this; it will just take more time for other segments. Patience and persistence will be required.

Ralph Jacobson
BrainTrust

When done effectively with a defined strategy in place, beacon technology can and IS showing positive results worldwide for shopper assistance, promotions, customer intelligence and other capabilities. The Fung Group’s “Explorium” in Shanghai is a great example of this.

Scott Thomsen
Guest
Scott Thomsen
1 year 6 months ago

Beacons, like any other form of connectivity are simply a way for shoppers to “avail” themselves to retailers in a particular context. Something like “Hey retailer, it’s me John, standing in front of Aisle 3, endcap 234 in store 586 in Scranton at 2:36 Tuesday afternoon.” The key to meaningful customer engagement is knowing what to say to John in that particular context.

I think the answer to your question is yes … and yes. It depends on John’s needs, the needs of the store, what’s on endcap 234, etc. Marketers are all too often caught up in the mechanism and not the message. Think about the message first, then you’ll have a meaningful engagement.

Matt Talbot
BrainTrust

I think we’re only scratching the surface of what retailers are able to do with beacons. Naturally, using beacons to push promotions and sales to consumers’ phones was the first use case many retailers embraced. However, the true power of beacons is data. The brands and retailers that embrace the power or real-time data are those that will improve retail execution and sell-through. Those are the brands and retailers that will rise to the top in their specific categories. The power of beacons to deliver this information is just another way smart retail companies can use real-time data to beat out their competition and win market share.

Michael Greenberg
Guest
Michael Greenberg
1 year 6 months ago

Let’s not confuse the technology with its use. Beacons just broadcast an identifier. Everything else is up to the retailer. In reality they are one of many techs that fall under the location services banner.

Smart retailers start with “what can we do when we know the customer is in our store?” and go from there. They know consumers need a reason to share identity, permission and (especially) location, and are coming up with interesting service and assistance tools as a result. These tools are where retail will complete the omni-channel experience and compete effectively with online.

James Tenser
BrainTrust

Beacons are an element of the larger in-store sensing apparatus, not merely a promotion-delivery vehicle, as they are too often portrayed.

Matt T. is dead right. The real payoff lies in the data they can gather, not in a handful of awkward interactions at the shelf.

So yes, in a narrow sense, beacons are showing their limits as in-store promotion vehicles, but their potential for marketing insights has barely been scratched.

Pete Davis
Guest
Pete Davis
1 year 5 months ago

I’ve worked with a few beacon tech companies, and I’d agree with many of the comments here that their current applications looks pretty limited.

For me, the biggest reason is that the way beacons are currently being used requires consumers to change their behavior.

Beacons are a classic case of push technology — where the store or advertiser is pushing content to the user. But that type of engagement is dying, and retailers using it will die along with it.

Consumers will whip out their phone when THEY want to, not because someone’s buzzing them a message.

Moreover, the idea that a retailer will send a consumer a promo to their phone, based on where they are in the store is intrusive, especially in a time when we’re all bombarded with about a zillion messages per day. Intruding a consumer’s time is a great way to piss them off and be deleted from their phone.

I do think beacons can offer value, but the implementation has to change. They have to implemented in a way that works with how consumers behave — not in a way that requires the consumer to change their behavior in order to get value — because that’s never going to happen.

Devika Girish
Guest
Devika Girish
1 year 3 months ago

Yes, it is high time that retailers started to look at beacons as a shopper assistance tool rather than a promotional one. Not doing so could cause them to lose out on their loyal customers. And while a few mainstream publications rushed to declare Apple’s iBeacon technology as a fad that couldn’t live up to its hype towards the end of 2015, most business insiders held a different stand. They confirmed that beacon deployments align well with ABI Research’s forecast of 400 million beacons deployed by 2020. This is pretty evident in some of the highly effective beacon campaigns of recent times. We have discussed them in detail here.

wpDiscuz
Braintrust
"Beacons are only part of the overall equation of consumer experience in stores. The key is creating consumer value that promotes adoption."
"Beacon technology will never reach its potential if 1.) its usefulness requires downloading an app onto your mobile device and 2.) the technology is simply used to push uninvited and unwanted promotions into the face (device) of the shopper."
"The limits to beacons are simple. The shopper has to download the retailer’s app. The shopper has to open the app. The shopper has to have their Bluetooth on."

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