Commentary

46% of Retailers Move to Beacons; 71% Learning Buying Patterns

For all of the fanfare over the last year about retailers using beacons and despite all the perceived benefits they see in using them, most merchants still have yet to implement beacon technology in their stores.

As one of the most visible areas in the Internet of Things, beacons and the short-range radio signals they send to smartphones to trigger various activities, have yet to take off in a big way.

Despite the many announcements of retailers launching beacon programs over the last year or so, many from major retailers including Macy’s, Lord & Taylor and, most recently, Target, fewer than a third (29%) of retailers have beacons in stores, based on a new study.

On the positive side, 17% more plan to add beacons, which would bring the total with beacons to 46%, according to the 2015 Store Operations Survey, the fourth annual study comprising a survey of 100 retail executives by Retail TouchPoints.

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This means that more than half (54%) of retailers have not implemented beacons with no current plans to do so. But it could be their loss.

Those with beacons have seen a wide range of benefits, not the least of which is better understanding customer browsing and buying patterns. They also are seeing increased customer engagement and a good number have seen an increase in sales.

Here are the benefits retailers have seen since implementing beacons in their stores:

  • 71% -- Able to track and understand browsing and buying patterns
  • 65% -- Able to target customers down to the aisle level
  • 59% -- Customers are more engaged in the store
  • 53% -- Able to create more relevant and compelling offers in the store
  • 24% -- An increase in sales
  • 24% -- An increase in offer redemption

It begs the question of why 54% of retailers are not beaconing.

12 comments about "46% of Retailers Move to Beacons; 71% Learning Buying Patterns".
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  1. Matt Silk from Waterfall, August 28, 2015 at 10:54 a.m.

    Chuck,

    I think retail marketers are still overwhelmed with everything on their plates and are still under-invested in mobile in general. Beacons are one more solution to be considered and managed by a team who is already understaffed and underbudgeted.  

    Beacon'ing is not a small undertaking as you have to...

    1. Rollout the actual beacon hardware
    2. Rollout or enhance your app to communicate with the beacons (BTW, nevermind having an app with enough penetration to matter...)
    3. Put systems and processes in place to view and digest the massive amount of data being generated after rollout
    4. Figure out what triggers are now "messaging-worthy" events
    5. Fight off the five other departments who demand they should message your customers at events which you know are not "messaging-worthy"
    6. Get signoff from ten departments on everything you want to do as everyone and no one owns this customer as it is extremely unclear if they are in-store, online, mobile, browsing, buying, comparing, etc...
    7. Have another debate internally about your connected customer cross-channel communications stratetgy and universal profile and the massive org changes required to deliver on that promise
    8. Still have the time and energy to move forward in some meaningful way to get enough data in your pilot to justify the larger investment
    9. Not get poached by a competitor who is trying to figure what you just learned through the process of steps 1-8
    10. Now, sell into your franchisees or local store managers as you need their support in order to be successful

    Well, I was having a little fun writing steps 7-9 but am I really that far off from reality? It actually doesn't surprise me that beacon'ing is where it is right now. It is a roughly 2 year old tech solution in terms of real discussions and public announcements about trials.

    Regards,
    Matt
    @matthewsilk

  2. James Smith from J. R. Smith Group, August 28, 2015 at 11:20 a.m.

    Hey Matt, nice feedback.  Questions for you:  Do you feel that early beacon-tech retailers are getting this info, in any meaninful form, back to their agencies?  And do the agencies have the expertise to know how to make use of such data?

  3. Matt Silk from Waterfall, August 28, 2015 at 11:54 a.m.

    James,

    Being in the mobile messaging space for the last 10 years...my quick answer is that there is a very wide array of expertise within the agencies we work with directly and indirectly. Some are amazing at mobile engagement, some are focused elsewhere and are just trying to front end a relationship between the vendor and the client, some are in way over the heads. Much of this depends on how the relationship between the vendor, agency and brand is defined and paper'd.  Happy to speak offline anytime in more detail.  Drop me an email at silk@waterfall.com.

  4. Rick Thomas from MediaRich Marketing replied, August 28, 2015 at 1:45 p.m.

    Matt has hit it right on the nose.  But then what also has to be considered is what motivates the consumer to opt in to receive those messages.  I think the technology has limited value unless there is a way to engage consumers in the process.  And that is very difficult and is more than likely generational.  Younger consumers will adopt some of the efforts to get them to download an app and opt in.  But older consumers (and I'm talking people over 30) could care less and don't want to be bothered.

    The current patterns of getting consumer data is connected on my keychain.  I have a Ralphs supermarket whatever that thing is called, one for CVS, another for Petco and on and on.  That to me puts the retailer literally in my pocket.  So why would any retailer see the need to get information from beacon technology?  

    Quite frankly the announcements over the store audio system telling consumers that you can now get 2 for the price of 1 is more telling than having to install beacons.  

    I like any technology that brings businesses closer to consumers but this is just too complicated.  The second I swipe my Ralphs card my buying patterns are noted.  What else more does Ralphs need from me?

  5. Kern Lewis from GrowthFocus, Inc., August 28, 2015 at 12:55 p.m.

    In support of Matt, and in response to that rather flippant last sentence in the article:
    The survey is a 30,000' flyover. There is no insight in to how much that increase in sales that 25% received: What was the ROI? Is the cost being covered by the new revenue? Are the new insights that 71% cited as a benefit of beaconing translating into new revenue through better in-store or digital promotion/products offered? Or, as James Smith asks, is the data sitting unused?
    What was the demography of the survey respondents? Could it be that the 54% are smaller enterprises that cannot make such an investment?
    And the 53% who checked the box against "Able to create more relevant and compelling offers in the store" may not actually have done so. They are repeating one of the key selling points of beaconing, which could still be an aspiration rather than a reality.
    I do not think the author would have to beg very long to get a reasonable answer to his final question!

  6. Chuck Martin from Chuck Martin, August 28, 2015 at 5:24 p.m.

    Some very good points, Matt, especially around competing interests and under-investment in moible. The app issue is being somewhat addressed by some the major apps now beacon-compatible or at least with some SDKs, depending on their partnerships. Your step 9 is quite on the money, it is a very competitive landscape.

  7. Chuck Martin from Chuck Martin, August 28, 2015 at 5:27 p.m.

    Good question James (and feedback Matt); some agencies are deep into beacon technologies, capabilities and innovation and osme of this expertise has recently appeared on stage at the last MediaPpst IoT conference, as well as the last two IoT: Beacons conferences. Good insights Matt.

  8. Chuck Martin from Chuck Martin, August 28, 2015 at 5:33 p.m.

    One more thing to add to some of your good points, Rick. Some are using beacons to trigger activities different from sending a message to the phone. For exmaple, one company is using beacons to trigger a phone in a pocket that then changes the in-store video screen to match that consumer's interests. The phone never leaves the pocket or purse and the consumer never has to look at the phone for the action to occur. Others are using beacon-triggered location informaton for later messaging delviered via other mechanisms, like online. Hope this helps.

  9. Chuck Martin from Chuck Martin, August 28, 2015 at 5:43 p.m.

    We see very many research studies on beacons and this survey is not an outlier, as you sugggest it might be, Kern. As to size of retailers, pretty much every every major retailor as well as agency are doing something with beacons, many looking to stay under the radar, for variouos reasons. We speak with many of them. There also are companies offering smaller retailers beacons for free (Google Facebook). But thanks for the comment.

  10. Devika Girish from MobStac, September 9, 2015 at 3:47 a.m.

    Very informative read, Chuck. Thanks for sharing. One of the reasons behind this could be that, while it is highly critical for businesses these days to have access to indoor location information that is accurate, and cost effective not many are clear on which indoor-location technology (Wi-Fi or iBeacon or NFC or GPS) will their business benefit from. Another important to note here is that, though beacons have now reached mainstream, most retailers today are still struggling to get started with their beacon pilot. We will be discussing everything you need to know about planning a beacon pilot in our upcoming webinar: http://blog.beaconstac.com/2015/09/webinar-your-guide-to-planning-a-successful-beacon-pilot/


     

  11. Chuck Martin from Chuck Martin, September 17, 2015 at 10:30 a.m.

    Thanks Devika, there still is a ways to go past the pilot stages.

  12. Cled Oakley from AIMS Marketing Systems, May 2, 2016 at 12:54 p.m.

    Good article and good comments.

    Rick, was that a rhetorical question? "...getting consumer data is connected on my keychain. I have a Ralphs supermarket...one for CVS, another for Petco... That to me puts the retailer literally in my pocket. So why would any retailer see the need to get information from beacon technology?"

    The answer is on your keychain, taking up space, in your pocket. My firm provides Smart Wi-Fi, Beacon and App Systems to Ad/Mktg agencies, as well as providing them, directly to businesses and institutions. I've got a 1 page and a 10 page explanation of why retailers would want all that info; which would you like?

    As, "Brevity is the soul of wit" - WS, This technology, packaged in the right system, enables Consumers to stay in touch with what's happening around them. Local events, cinema, theatres, concerts, emergency and public services, transportation, police and fire departments, as well as being able to receive relevant offers from local restaurants, retailers, services and professionals. Businesses already have their customers and offer them Loyalty Rewards, in the form of membership doohickies, that go on your keychain and need to be swiped, when used or "Buy 10 Get One Free" punch cards, etc.
    With the new tech, businesses can now not only reward current customers, but reach out and touch passersby or others, who are within a target demographic and geofence and who have opted in, by either accessing a participating Wi-Fi hotpsot or having downloaded our universal app.
    Our app works globally and is not just for retailers, but for cities, schools, institutions, hospitals, museums, arenas and more.
    The little plastic fobs on your keychain were 'all that', 20 years ago but, like S&H Greenstamps, are a bit dated. Smart Wi-Fi, Beacons and the right app are where it's at, now and in the future.
    I'm a couple of decades over 30, but still trustworthy. Peace!

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