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Opening Doors With Beacons

SMB Retail by Angela Diffly

Retail technology website and newsletter

Smarter Technology Pushes The Envelope

Technology is getting smarter. And that’s a good thing for consumers and retailers, alike. But it only works if we embrace it. Take the big smiley-faced elephant in the room as an example. Amazon has one-click buys on its website, as we all know. But now the behemoth e-tailer has one-click buy-me buttons.

Amazon Dash buttons - Retail technology hardware and software

The battery-powered plastic devices called Amazon Dash are placed around your house for reordering your favorite brands. The buttons interface with your smartphone and WiFi and are used to re-order items when you run low or  run out. In September, there were 500 different products you could reorder with the tap of a button, things like Tide laundry detergent, Bounty paper towels, Huggies diapers and even Gatorade. At the Consumer Electronics Show a couple of weeks ago, Whirlpool announced it is riding the Amazon Dash wave, monitoring cycle usage and automatically reordering detergent when you need it. So how can SMB retailers compete when Amazon is everywhere? Beacons may be a smart start.

Beacons 101

Juniper Research predicts that mobile context and location services will reach $43.3B in revenue by 2019, compared to $12.2B in 2014. According to the Google Shopper Marketing Council, 84 percent of smartphone owners are already using their phones in-store to help them shop. Why wouldn’t retailers want to become a useful and important part of that mobile experience?

Beacons are small, wireless inexpensive ($5-$30) hardware devices that can be used to detect the presence of a smartphone’s NFC (near-field communications) using Bluetooth technology. They can communicate with each other, with your point-of-sale system or with another computer. They sense a smartphone signal, which provides a unique device ID. But there are hurdles. In order for them to work, shoppers must first:

  • Enable location services on their smartphones
  • Turn on Bluetooth
  • Opt into the store’s app
Partnering Up For Success

Since SMBs most likely will not have masses downloading their store app (assuming they have one), it’s important for them to partner with third-party apps with large user bases. For example, beacon company Gimbal has relationships with larger publishers, like RetailMeNot and Shazam. “These publishers have a really large reach, so SMBs can pair up with RetailMeNot for a promotion or some kind of discount,” explained Keri Danielski, Gimbal’s vice president of marketing and PR. “The RetailMeNot application could recognize the beacon in stores and push the promotion out to its users.”

“Many of the middle market stores are not going to have the resources internally to attract a ton of people to download their apps,” commented Chetan Ghai, chief product officer for location-based analytics company ShopperTrak. “So it’s important for them to figure out who the ecosystem providers are and who can best tell their story to the masses.” By leveraging beacon technology with Shopkick, for example, SMBs can reach 50 million consumers who have already downloaded that app and are looking for deals. “Retailers must make their brands relevant all the way from the couch to the store,” noted Ghai. “You can bridge online with in-person experiences by reaching shoppers throughout their journey.” While larger brands pay per number of Shopkick users, SMB retailers may find it more reasonable to pay relative to the amount of traffic and the actual impact the app is making on their brands.

ShopperTrak helps retailers measure how many people come in the store and what happens once they’re inside. “The most important thing we’ve realized over time is that there are way more shoppers than they (retailers) ever imagined, and their conversion rates are lower than they hoped,” noted ShopperTrak’s founder Bill Martin. “If you can move that conversion rate just one percent higher than yesterday, you’re providing incremental profits and incremental sales to the store.”

Beacon proximity and location intelligence platform inMarket predicted that beacons and proximity marketing programs would impact $7.5 billion in U.S. millennial spending during the 2015 holiday shopping season. “Our platform has delivered a 19x increase in product engagements at the shelf, and incremental sales thanks to in-store mobile engagement from beacon proximity efforts,” noted senior director of communications Dave Heinzinger in an interview with Thalamus, a crowdsourced database of ad vendor data.

SMB Beacon Applications

Putting beacon technology in a store is easy. The trick is figuring out how to use it. “Even if all you do is put a beacon and a geofence up and listen,” Danielski told us, “You can find out how many people are coming in, where they’re spending most of their time, and purchase frequency.”

Many retailers are doing more than just listening. They’re using beacons to push flash promotions in real time to customers based on proximity to their store or proximity to a product. If the customer is walking by your shop, for example, you can push a notice that pings the user, alerting them to stop in for a 15% off shopping spree. If a customer lingers in the accessories aisle, you may send a buy-one-get-one-half-off promotion for earrings. Beacons are also being used to:

  • Drive foot traffic in-store
  • Greet customers when they walk into the store
  • Alert shoppers close to a store that items in their online shopping carts are on sale
  • Highlight in-store promotions
  • Push promotions to shoppers in fitting rooms (where retailers see larger conversion rates)
  • Send product reviews and recommendations based on shopper preferences or location
  • Measure and improve loyalty (replace punch cards, alert when the “next service is free”)
  • Enhance mobile experiences (“You’re nearby, can we interest you in your regular coffee?”)

There’s also a monetization opportunity that comes with some beacons. For example, Gimbal beacons have a secure mode, where retailers can control who has access to them. So if a small boutique is selling Levis, for example, the store can give Levis access to users when they’re near or inside the store.

beacon signal phone

Getting Shoppers On Board

Sixty-three percent of U.S. consumers find it “cool”, not “creepy” when location-based services identify relevant items and stores when conducting searches for the same, according to the 2015 “Creepy or Cool” study by RichRelevance, Inc. But there’s a fine line.

When people start to see the value exchange of beacon technology, it becomes cooler. Danielski relates it to GPS. When asked if we were willing to share our location back when GPS began to take hold, we were skeptical. But now we know OpenTable can make us a reservation in a nearby restaurant and Uber picks us up based on our exact location. Suddenly, location sharing becomes valuable to the user. The same applies with pre-ordering your coffee, keeping track of your loyalty points and having your dry cleaning ready right when you get there. When location is useful, people will use it.

But location marketing can be abused and turn people off very easily. “SMBs should take a crawl, walk, run strategy with location-based promotions,” recommended Danielski. “They should be very cautious how they use it, what information they convey and when. It’s easy for a user to become annoyed and delete the application. Implement the technology and start to understand it, then slowly try out different use cases and see how it performs.”

Basically, anything that large retailers are doing with beacons, SMBs can do, too. With easy implementation, affordability, strategic partners and many ways to boost sales, beacons are well positioned to give SMBs a leg up. I hope my favorite local shops are reading this. I need a new pair of shoes, and a manicure. My Bluetooth is on, my location services are enabled and I’m downloading a few of these deal apps. I’m ready when you are.