What’s the real deal with beacons?
It’s time for a reality check when it comes to beacons. That, somewhat to my surprise, was the position of many industry pros I met this week at the Location & Context World conference in San Francisco. Here’s some of what I heard:
Beacons are everywhere, sort of. By next year, more than half of retailers will be deploying beacons in stores. Sounds like a lot, right? What that figure doesn’t say is that most of the deployments are part of pilots. It also doesn’t say how many actual locations within chains with hundreds or thousands stores are going to be using the technology. Even with this, however, the glass half full crowd sees retailers expanding use of beacons and even going in full-boat in the near future. Apple, American Eagle, Lord & Taylor and Macy’s are some of the usual names dropped when beacon evangelists talk about the Bluetooth world that awaits us all.
Beacons drive sales, we’re pretty sure. What we’ve seen to date is that offering shoppers deals via beacons increases purchasing intent. A 10-market test earlier this year by Hillshire for its American Craft Link Sausages saw purchasing intent climb 20 percent among people receiving the deal through there mobile devices. While there is a very close correlation between intent and actual purchases, we don’t know the actual sales that were driven because beacons are not tied to legacy systems in pilots.
A number of people referenced research done by Swirl Networks, which found that 60 percent of shoppers open deals pushed to them through beacons and 30 percent redeemed offers.
Beacons are good for your business, but only in moderation. Right now, the technology is being used primarily to send discount deals to shoppers as they make their way around stores. There are also a relatively small number of alerts being pushed to consumers’ phones. But imagine deals popping up everywhere you walk around a big box store. As we’ve seen with e-mail and text offers, people may opt-out almost as quickly as they opted-in if they get annoyed. The people I spoke with said it doesn’t take more than a couple of unwanted offers for consumers to start rethinking their decision to opt-in.
Beacons are really reliable except when they aren’t. I heard numerous anecdotes from attendees at the show about walking into a particular store and being served a deal on their smartphones. I also heard a few of people walking around stores with beacons and … nada.
Beacons are the answer to retail’s localized marketing needs, sometimes. While it is understandable that retailers continue to seek a single answer to all of their location marketing challenges, there simply isn’t one. Beacons work great, down to an accuracy of a few meters, but are not intended to cover wider spaces more suitable for Wi-Fi (typically within a store) and GPS (outside).
Beacons are best handled in-house, or maybe not. The feeling among many is that when retailers eventually get around to fully embracing beacons, they’ll want to own the technology and the entire data gathering and analytical process. On the other hand, Macy’s has beacons in its 800-plus stores in the U.S. operated by Shopkick. Maybe third-party management will make sense for others.
What do you think are the biggest opportunities and obstacles facing the deployment of beacons in retail today? Do you expect to see widespread deployment of beacons in retail stores over the next three years?