Beacons – retail’s shining light

Increasingly, retailers are looking to beacons to enhance the in-store shopping experience while simultaneously aligning the physical with the online retail experience. Beacons communicate with shoppers' smartphones by sending them media such as ads, discounts and product information. They also pose as a critical tool in enhancing point-of-sale systems and in generating customer intelligence - particularly on how customers browse and manoeuvre through stores.

We touched on beacons in our post on the changing face of retail - the uptake of these bluetooth-enabled beacon devices represents the industry shift in adopting a broad range of location based technologies. Beacons are now being installed in stores across the world, however, despite a flood of media and retailer interest, the technology is still in its infancy - we are yet to see just how, where and why beacons will be used to shape the retail environment.

We've collected the data to provide the essential facts on beacons and their future application.

The facts

By the end of 2014, there will be only thirty thousand active beacons around the world...

However, 60 million iBeacon units will have been shipped by 2019
Half of the top 100 retailers in the US are testing beacons this year
Less than 3% of retailers are equipped to identify shoppers walking in-store

72% intend on being able to do so within five years
Retailers will have 3.5m operational beacons by the end of 2018

The big problem

Only 5% of shoppers have the relevant retailer’s app on their smartphone

This is a huge stumbling block for the technology. Consumers need the prerequisite app on their mobile device in order to receive notifications. Incentivising the customer acquisition of the app poses a problem to retailers.

What's more, having the app on the customer's smartphone alone is not enough to guarantee the effective function of the technology. The customer must choose to opt in to the retailer's marketing programme in order to receive the push notifications on which the success of this technology is hinged.

One push notification too many, and the customer will delete your app.

Users receiving an iBeacon notification are 6.4x more likely to keep an app on their phone
In-store app usage is 16.5x greater for users who have received a beacon message

How to succeed with beacons?

Offer discounts on purchases

More than 30% of American consumers don’t use mobile shopping apps because they aren’t receiving any useful discounts or coupons.

Trigger custom messages and advertisements

Timely in-store messages and advertisements can lead to 20x increase in purchase intent.

Enable cashless checkout

By 2017, roughly half of all in-store transactions will be completed via mobile devices.

Use beacon-enabled apps to send customers relevant offers

Over 40% of shoppers actually look for offers on their mobile devices while they’re in the store.

Help customers find their way around the store

66% of customers who use mobile to make a purchase decision prefer a mobile app with in-store navigation.

Sources – BT Intelligence, Boston Retail Partners, Cisco, comScore, inMarket, Milennial Media, Motorola

Posted in Blog.