Many retailers are implementing beacon technology as a more direct marketing strategy for in-store customers. When a company sets up a physical beacon in their store, the device uses Bluetooth Low Energy - in conjunction with the company's app that customers have already downloaded to their smartphone - to communicate with in-store customers. Once customers are within a certain range of the beacon, targeted advertisements, messages, and useful information is pushed to their devices.
According to Umbel, as of 2014, only one percent of the 3.5 million retail stores in the U.S. were using beacons. That number is rapidly increasing with big brands like Macy's and McDonald's implementing beacon technology.
Business Insider predicted beacon-triggered notifications would directly influence up to $4.1 billion of the total U.S. store sales in 2015 with that figure growing to $44.1 billion in 2016. Beacon operator Unacast estimates that by 2020, there could be as many as 400 million beacons deployed worldwide.
Retailers are the most obvious group to jump on the beacon bandwagon as a way to boost customer engagement and sales, but this technology has the potential to transform how transit systems, sports teams and educational institutions communicate with people.
In 2015, 20 of the 30 Major League Baseball stadiums were equipped with beacons. Beacon-enabled apps allow fans to check into the stadium, view maps and concession promotions, as well as upgrade their seats.
While most airlines already use beacons for their check-in areas, many people - like Phil Easter, Director of Mobile Apps at American Airlines - want to expand the range of what beacons can offer their customers.
FlightView, a flight information company, conducted a survey that revealed 53 percent of U.S. travelers would allow airports to track their mobile devices to get real-time updates on things like security lines, wait times, and distances between gates.
A few ways businesses can use beacon technology:
#1. Keep customers in the store longer.
HotSpot, a Canadian beacon-tech company, is helping sales by letting local stores pay for customers' parking using beacons to notify them when the meter is running low and offering to pay for it. More time left on the parking meter means more time in the store.
#2. Provide more information.
Places like museums can benefit from placing beacons in strategic locations to educate and inform people on the history of things and places they pass in the museum. Making spaces interactive encourages people to linger, which makes it more likely they will spend money in that area.
#3. Make accessing an event easier.
Beacons can be used to navigate people during crowded events. They can be used to send directions directly to mobile devices and provide information about workshops, performances, lineups, and concessions, based on where a person is located.
#4. Create a powerful loop of customer intelligence
Retailers can sync beacons with mobile apps, CRM systems, POS systems and customer loyalty programs. Combine this data with other information collected by monitoring visit durations, department popularity and commonly combined store items and retailers can collect powerful customer intelligence.
The use of beacons is a great way to reach in-store consumers while they're in spend-mode, but a 2015 Juniper Research report indicated that excessive use of this technology can stall progress as consumers become annoyed with receiving too many promotional messages. There are claims that a high percentage of people will uninstall an application once they receive a few too many notifications. Retail stores will have to test the technology to see what works best with their shoppers.
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