In last weeks blog we discussed why beacons are creating such a buzz right now and the benefits of this groundbreaking piece of technology. Now that we understand beacon technology, let’s explore what it can be used for (and what it is no good for).
The most obvious application for beacons is hyperlocal marketing. This means sending customers notifications to their phones based on their precise location, which combined with a wealth of other data about the user, such as demographics and purchase history can of course increase conversion rates significantly. Location has been shown to still be the number one factor for purchasing decisions, so beacons in fact add a very valuable layer to the targeting mechanism.
Unfortunately a lot of attention has been given to this application, as it is the simplest one to implement, but while the benefits for the vendors are clear, it is not quite so obvious for customers. The vendor’s app essentially becomes a radio station broadcasting nothing but commercials – if this were the case of a real radio station clearly no one would listen.
And while this might still sound like a great idea to some, the problem is that customers need to have the vendor’s app downloaded on their phones to be able to harvest the power of beacons and most of us will not have the local café’s app downloaded (if they even have one). This obstacle is a bigger one than it seems, since even big brands like Apple are struggling to get their customers to download their app that serves nothing but promotional purposes.
Nevertheless, inMarket, one of the market leading service providers in the Beacon world, has a great solution to this: they integrate beacon functionality into existing apps that customers like and use anyway, such as their shopping list app, to then deliver relevant notifications at just the right time. But there is one more issue to be considered: We don’t like receiving millions of notifications! In fact, inMarket found that the optimal number of notifications per user was… one. But while over-saturation of beacon messages caused a 313% drop in app usage, beacon engagements caused a 5x increase in user interaction over "traditional" push messages, so there might be some hope left for hyperlocal marketing - if you know how to use it right.
The better way of using beacon technology, however, is by utilizing it to enhance the customer experience. Imagine this: You step into a store, the shop assistant greets you by name, politely asks you if he can help and knowing what you have bought last time, enquires how it has been serving you. Then he shows you the relevant items, based on what you already have, might have looked at last time and online. He explains functions, alternatives and the best complimentary equipment to what you already own. Sounds a lot like “back in the days” when you had one Shoemaker in the neighbourhood and not only did he know you and your family, but he knew your foot shape exactly and made you shoes that fit perfectly to your taste and physique. Moving back to that, from the impersonal mass retail that currently exists, is the really exciting prospect. And not only in retail, but also in hospitality!
Don’t worry if you are more of a lone explorer, the technology still has some great things in store for you: You could walk around the store (venue or event) by yourself and have an intelligent companion in your phone. It could beautifully visualize additional information about the item you are standing in front of, allow you to save it for later, look at reviews, compare it to other items, compare the price and pay for it on the spot.
This is the right approach to take for implementing beacon technology and while it looks like it only benefits the customer, the truth is that the real value for the vendors lies in data. For the first time with the help of beacons, heatmapping, purchase history, cross platform tracking, good CRM systems and analytics, physical stores will have the data that online stores had for many years.
This looks to be the future use of beacon technology. While hyperlocal digital marketing will likely be the first application we’ll actually see and it will certainly help the technology to mature, the true benefits come after that.
Beacon technology is rapidly spreading in the retail world, especially in the US, with the likes of Walmart and Macy’s quickly adopting and trialling the technology. But there are more advanced use cases as well, such as The Cleveland Cavaliers Basketball team who recently joined a host of many other professional sports teams in the US that are sending location-aware notifications to their fans. Nonetheless my favourite application is that by Bonaroo festival. They truly used it to understand their guests and improve the experience.
The far future
Given the obvious barriers to using beacon technology for not only the retail sector but for its more general intent, the connection of the physical world with the virtual one - the Internet of Things - dominant companies are working on defining new standards. As such Google has published code for its open source Physical Web standard, which amongst others would allow any physical object to communicate with any device without the need for a dedicated app.
Implementation of such technology into the core of operating systems is likely to happen in the medium term, as interaction will have to become more seamless. Then we will have arrived at the age of the Internet of Things, when we will all be running around with augmented reality glasses with information overlaid on the real world, rather than on a small smartphone screen and beacons will find their true purpose.
Until then, let us prepare you for the future and take a look at our services.