Why Scannable Shelf Tags Could Improve the Retail Experience After Beacons Failed

They may better fulfill in-store needs

By Lisa Lacy

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58 mins ago

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Once upon a time, beacons—Bluetooth-powered devices that can push messages to smartphones—offered brands an opportunity to connect with consumers in physical retail locations and gather data about them. For brands, beacons promised an expanded and expansive conversation at the shelf. Companies spend a lot of money trying to get consumers to the store and in front of their products, only to lose out on a sale because the item next to theirs is discounted.

“Beacons have offered this kind of communication point at the final moment of truth for brands, and they’ve always been excited about it,” said Steve White, vice president of commerce strategy at digital agency SapientRazorfish.

But retailers don’t want every brand they carry shouting at customers as they walk down aisles. They want to control the store environment, White said, and avoid a “screaming match inside the store.” Retailers also disliked beacons from an operational perspective, as products aren’t always locked into the same location in the story.

Another problem, consumers had to have an app on their phone open in order to receive brand messages. And in the real world, consumers are picky about what apps they download, and they have higher expectations about how—and when—they want brands to engage with them, said Manolo Almagro, managing partner at tech consultancy Q Division.

“Agencies saw beacons as a media play—they thought it would be great to push an offer out to a consumer,” Almagro said. “Sure, we could limit the number of times we’d blast them with a message while they were shopping, but—ultimately, companies like [location marketing company] InMarket turned the whole thing into a media platform as it had the fastest ROI and it was sold as scale plus impressions/reach. But they had to pivot because of the lackluster responses of their multi-retailer beacon networks.”

Beacons still have a time and a place in single-brand environments, like museums. Both the Metropolitan Museum of Art and the Guggenheim installed beacons in 2015, for example, and the Guggenheim at least is still using the technology to power the Near Me feature in its app.

Scannable shelf tags could be the answer to beacons’ problems, providing brands with the in-store interactions with customers that they desire, but it will be up to the consumer to choose when they hear from brands. According to White, the widespread availability of near-field communication (NFC) chips in mobile phones, NFC-enabled shelf tags—scannable, high-tech versions of traditional shelf tags can provide shoppers access to additional information.

“Imagine the potential. If I tap it and I’m a loyalty member, it can show me a price specific to me for that item and when [another] person walks by, it’s a different price,” White said.

Instead of shouting all at once, brands using NFC-enabled shelf tags tell consumers, “We’re here when you need us,” and retailers don’t have to worry about a flood of unsolicited messages. And, anecdotally at least, White said he saw an uptick in NFC shelf tags and interactions at a recent National Retail Federation event. NFC chips can trigger messages on phones without a user having to turn on Bluetooth, so there’s a lower barrier to entry. But, as it stands, White said this is conjecture and he was unaware of any real-world examples of NFC-enabled shelf tags in action.

Kroger, however, recently started rolling out a digital shelf technology called Edge, or Enhanced Display for Grocery Environment. A rep said Kroger has Edge prototypes that feature NFC, but the brand has also built an NFC-like technology that’s been incorporated into other prototypes.

Sshe said Edge allows Kroger to more quickly and accurately set prices, to activate instant promotions and price changes and to display dynamic advertising, as well as videos and information about nutrition and allergies. It also serves as an auditing tool for store associates to help manage inventory levels and can be programmed to offer sale prices to customers as they pass by if they’ve indicated they’re interested in a given product and have downloaded the associated app.

Edge is being tested in approximately 20 stores and will roll out to about 150 this year, she said.

“My prediction is that NFC will take over for [beacons] in those usages—NFC wasn’t available in iOS when beacons came out. Now, NFC is ubiquitous and cheaper than beacons and serves the same purpose,” White said. “The days of beacons in their current form as far as I see it are probably waning.”