With the rise of online shopping giants like Amazon, retailers across the nation are continually searching for new ways to draw customers into physical locations to do their shopping and to offer them a type of experience that online shopping cannot provide.

When Apple introduced Bluetooth based beacon technology to the world in 2013, the tech community and retailers rejoiced, projecting that this innovative technology would be a game-changer for brick and mortar shops. In fact, BI Intelligence reporting projected that in 2016, beacons would drive an estimated $44 billion in retail sales.

Though beacon technology has not become as wildly popular as originally anticipated in the last three years, the implementation of beacon technology has allowed retailers to gather a significant amount of insight into consumer behavior. As a result of trial and error, beacon technology is now evolving towards an even greater use than originally intended.

How do beacons work?

Beacons operate via Bluetooth technology on electronic devices to alert apps or websites that a user has opted into with notifications based on the customer’s location.  Beacons allow retailers to track the exact location of a customer at any given moment with astounding accuracy, and send them push notifications for deals, promotions, and personalized offers. They are also useful for people counting. The idea behind beacons is that when a consumer is glued to their electronic device and passing by a specific area of a store, they will receive an alert that will capture their attention and lead them to action.

The advantages of using beacons in retail environments

Beacons offer several advantages to retailers looking to capture the attention of customers. They generate engagement between the customer and the business, and offer rewards to customers that choose to interact.  This builds customer loyalty and trust, while also providing retailers opportunities for strategic personalization.

For example, if beacon technology can provide a retailer with the age, gender, and spending habits of a consumer, they can instantly utilize that information to send them push notifications for a promotion or product that they feel the consumer is likely to want. Beacons allow retailers to instantaneously adapt their marketing efforts to individual consumers, a strategy that can prove much more effective than trying to appeal to a broad target demographic.

Potential drawbacks to implementing beacon technology

This great resource has not been without its setbacks. Retailers have found that consumers tend to get easily annoyed by receiving too many push notifications, and will stop using apps if they receive more than one in a short amount of time. In addition, not everyone has Bluetooth technology enabled on their phone.

The unanticipated advantages of using beacons in retail environments

Despite the relatively slow growth of beacon technology and unforeseen obstacles, it has proven to be incredibly useful for something very powerful: data collection. When integrated with a business's CRM system, beacons can track everything from footfalls, purchases through apps, loyalty and marketing effectiveness, service quality, queue abandonment, returning visitors, and a wide variety of metrics that can help businesses improve their marketing efforts and optimize the customer experience.

Though the future of beacons may look different than originally anticipated, there is no denying that they will continue to adapt to provide valuable information and services to retail businesses, allowing them drive sales through targeted marketing efforts and gain greater insight into their customer base.


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