The Emergence of Beacon Technology

When a shopper arrives at their location – a store, a mall foyer, a commercial square – beacons use Bluetooth technology to alert an app or website on the shopper’s smartphone. Businesses deploy beacons to interact with customers by transmitting useful information about products and offers.

The rise of beacons

UK retailers have been running trials with beacons for the past few years. Asda, Tesco and Waitrose have tried them, as has John Lewis. With over half of retailers planning to use them in the next five years, British retail will aim to achieve higher levels of customer engagement through clever targeting and personalisation.

The idea is that the shopping experience is enhanced and the route to purchase is smoothed out. Broadcasting promotions to passers-by acts as a draw. Once in the store, mannequins can be set up to outline relevant information about the outfit on display – cost, available promotions, and the like – an initiative that House of Fraser is already undertaking.

Works both ways

And the flow of data has its benefits working the other way. Beacons can paint a picture of the flow of foot traffic through stores, the amount of uptake of certain promotions, and the ratio of client visits to purchases – in other words, has a client known for their retail largesse entered the building? It would certainly be useful to know. If beacons usefully describe the client’s preferences and purchase history, floor staff can adjust their approach to make a sale.

The possibilities are endless, really. Without ignoring the risk of customer fatigue, if retailers can rely on beacons to generate offerings that engage the client – a discount, a reminder, notice of a long-awaited item, a witty greeting – then they’ve served their purpose.

New technology, new challenges

The user must consent to communication with beacons, and so retailers rely on their compliance. Lest the outreach come off as intrusive, careful thought must be placed into the messages. Also there is competition between both retailers’ apps and beacon technologies. Apple’s iBeacon was launched with some fanfare in 2013, but it only works with iPhones. Retailers are unlikely to be enamoured of technology that limits the reach of their messages, and a competing format from Google called Eddystone is an answer to those concerns. Google’s offering provides pre-programmed website URLs, which alleviates the need for customers to download each retailers’ proprietary shopping app. Picture a beacon at a bus stop: it would be a shame to miss informing a commuter that their bus is cancelled simply because the requisite app wasn’t installed on their phone. Newer technologies are finding a way around these sorts of limitations.