• by Keith Wright , Columnist, January 3, 2018

Traditional brick-and-mortar retailers are struggling — to put it mildly. Hundreds of malls are closing every year. But retailers are fighting back. Next time you visit a Starbuck’s or Dunkin Donuts, you may get a prompt from the latest new mobile technology — beacons!

Beacons are tiny battery-operated radio transmitters that emit a Bluetooth signal to smartphones within a certain range. According to Unacast’s latest report, “beacon deployments are on track to reach 400 million deployed by 2020.” For retail, the top applications include coupons, loyalty payments and pure data collection.

Beacons provide opportunities for in-store personalized experiences. They’re bridges that link brick-and-mortar retailers with customers glued to their phones. The goal for retailers like Rite Aid or Target is real-time personalized engagement in an actual store with actual merchandise. 

This is brick-and-mortar retailers fighting e-businesses. But can they win?  

Widespread Beacon Adoption

A survey of 300 of my students (ages 18 to 24) indicate that most shop primarily online, yet they still have downloaded brick-and-mortar store apps from retailers like Starbucks, Macy’s and Walgreens among others.   

When asked, they said the number one reason for downloading an app was for the loyalty program and deals. Customers know they will be rewarded for all sorts of location-based actions, even just walking into a store. This is their reward while the store collects valuable data on in-store activity which could result in highly personalized and targeted offers. 

Rite Aid was an early adopter, and installed beacons in over 4,500 U.S. stores. This is the largest beacon program to date. Target, the second largest general merchandise retailer in the U.S., is piloting beacons in 100 stores. 

Even shopping malls are in the game. Many mall apps allow the beacon ID to recognize where you are standing and shows you how to get to your desired store while serving you ads on the way. 

Investment Vs Reward 

Retailers spend $5 to $25 for each beacon. This is a very new technology, not legacy like NFC or RFID tags, so there are additional platform costs involved.  

Walmart actually partnered with GE and used GE lightbulbs to house beacons and send push notifications of specials and coupons to in-store customers. This eliminated the need to buy separate beacon-related hardware for each store.

Many retailers are betting big on beacon technology and have already seen the bet payoff.

In fact, according to a new report from inMarket, "beacons can contribute up to a 24% sales increase per store." Also, "more than 84% of shoppers were using their mobile devices inside stores." 

Beacons, Beacons Everywhere 

Beware: the sales uplift is making beacons extremely popular. This means you’re likely to get swarmed just about anywhere you move. 

With more beacons deployed and more smartphones apps downloaded by consumers lured by perks like a free flavored latte, retailers are able to capitalize on a treasure trove of newly found consumer data including the Holy Grail – data analysis on where you are going and what you are doing. 

These retail analytics are far more specific than simple location-based marketing, which targets consumers within a city or Zip code. Beacons locate customers within 50 feet and on specific floors in retail stores. Stores will charge advertisers to offer competing deals as you walk down aisle five. Just this week while waiting patiently at a store deli counter, I was offered a deal on a specific brand of sliced turkey.

Is There Such Thing as too Much Beacon?   

Beacons help retailers communicate with consumers as quickly and personably as possible. Just don’t overdo it. No one really wants to feel like they’re trapped inside a never-ending, rolling advertisement. Target plans to limit the number of beacon notifications to two push notifications per shopping trip, to avoid overwhelming its customers with alerts. Beacon stalking is not a new best practice!  

The reality is, beacons are the next best hope for brick and mortar retailers to step-up their game and really compete against an ever more powerful adversary of e-commerce. Looks like our little friends are here for the duration, or at least until Amazon decides to take over another industry.