How Beacons Are Changing the Shopping Experience

by Chuck Martin  |   11:00 AM September 1, 2014

Beacons are taking the world of mobile by storm. They are low-powered radio transmitters that can send signals to smartphones that enter their immediate vicinity, via Bluetooth Low Energy technology.  In the months and years to come, we’ll see beaconing applied in all kinds of valuable ways.

For marketers in particular, beacons are important because they allow more precise targeting of customers in a locale. A customer approaching a jewelry counter in a department store, for example, can receive a message from a battery-powered beacon installed there, offering information or a promotion that relates specifically to merchandise displayed there. In a different department of the same store, another beacon transmits a different message. Before beacons, marketers could use geofencing technology, so that a message, advertisement, or coupon could be sent to consumers when they were within a certain range of a geofenced area, such as within a one-block radius of a store. However, that technology typically relies on GPS tracking, which only works well outside the store. With beaconing, marketers can lead and direct customers to specific areas and products within a store or mall.

As a point of technical accuracy, the beacon itself does not really contain messaging; rather it sends a unique code that can be read only by certain mobile apps. Thus, the carrier of the smartphone has to have installed an app – and if he or she has not done so, no message will arrive. The choice to opt-out exists at any time. But the key to beaconing’s effectiveness is that the app does not actually have to be running to be awakened by the beacon signal.

Think about it, and you realize that beaconing has been the missing piece in the whole mobile-shopping puzzle. The technology is essentially invisible and can work without the mobile consumer’s having to do anything – usually a major hurdle for any mobile shopping technology. The shopper only has to agree in advance to receive such messages as they shop.

So imagine walking by or into a store and receiving a text message triggered by a beacon at the store entrance. It alerts you that mobile shoppers are eligible for certain deals, which you can receive if you want. Assuming you accept, you begin receiving highly relevant messaging in the form of well-crafted, full-screen images based on what department or aisle you are strolling through at the moment. Here’s an example:

Implementing beaconing is less about installing the actual beacons and much more about rethinking the overall shopping experience they can help shape. Since the best way to imagine the possibilities is through actual, small-scale deployments, this has been how many retailers have spent the past several months, quietly experimenting and learning. Now, many are ready to scale up their initiatives, and beacons are bursting onto the scene in a big way. For various purposes, they are being used by retailers such as Timberland, Kenneth Cole, and Alex and Ani, hoteliers such as Marriott, and a variety of sports stadiums. Here are some details from a handful of companies – each by the way running on a different beacon platform:

• Hudson’s Bay Company (HBC). The owner of Lord & Taylor, Hudson’s Bay, and Saks recently became the first major retailer to launch a North American beacon deployment, in its U.S. and Canadian stores. A shopper with the SnipSnap coupon app on an iPhone can receive messages and offers from seven separate in-store, beacon-triggered advertising campaigns. Like some others, the retailer is not relying on its own app for the beacon recognition, but rather is using outside, third-party apps that more people are likely to already have on their phones. (This also allows Lord & Taylor to use the beacon program for new customer acquisition.) The Hudson’s Bay beacon program runs on the advertising platform of Boston-based Swirl.
• Hillshire Brands. In what appears to be the first U.S.-wide beacon deployment by a brand, the maker of Ball Park Franks, Jimmy Dean sausage, Sara Lee, and the Hillshire Farm portfolio of products, beaconed grocery shoppers to launch its new American Craft sausage links in the top 10 markets for grocers nationally. Based on an analysis by Hillshire’s agency BPN (part of the IPG Mediabrands global network), there were 6,000 in-store engagements in the first 48 hours of the two-month trial, and purchase intent increased 20 times. Shoppers needed an app such as Epicurious, Zip List, Key Ring, or CheckPoints; this beacon platform is run by InMarket.
• Universal Display. This global mannequin company based in London and New York is putting beacons inside mannequins in store windows. Why? To allow passersby to instantly see the details of the outfit the mannequin is wearing – and purchase any of its components right from their phones. The beaconed-mannequins are in the U.K. in the House of Fraser, Hawes & Curtis, Bentalls, and Jaeger, and will soon come to stores in the U.S. Here, the beacon app used is Iconome, which is also the platform.
• Simon Malls. The giant of retail real estate is putting location-based technology into more than 200 of its shopping malls, targeting the complexes’ common areas. For beacon recognition, the mall owner is using its own Simon Malls app, which already contains mall information ranging from maps to dining options. That beacon platform is run by Mobiquity.
• Regent Street. London’s mile-long, high-end shopping street has some 140 store entrances, and now has beacons at the entrances of many of them. The beacon app used is the Regent Street app, slated to be promoted on the sides of double-decker buses that run along Regent Street. The app allows shoppers to pre-select the categories that interest them and the ones that don’t, making the messages they receive more relevant to them. That platform is run by Autograph.

That’s a lot of activity to report, but the truth is that it only constitutes a vanguard. Most shoppers have yet to be beaconed; many will encounter the technology before the end of this year. How long will it be until it’s hard to find someone who is not familiar with beaconing? How long till it’s hard to remember a time when the marketing messages you encountered had nothing to do with where you were? I would guess, not long at all.