What if your phone could read your mind and give you what you want? Research shows that 74 percent of consumers use smart phones as part of their shopping experience, but what if your phone could alert you to special deals as you enter a store based on what it knows you like to buy? That’s the idea behind beacon technology.
A beacon is a small device placed in stores that communicates with people’s smart phones and tablets so they can receive targeted in-store push notifications if they’ve downloaded the store’s app. It can also track their in-store behavior to create analytics that can be used for a messaging strategy. The implications for marketers and marketing app developers are profound.
How beacons work
Beacons work in two different ways. First, there’s “geotargeting” where a beacon’s signal is broadcast throughout an area, like the inside of a store. Beacons can also be triggered by proximity. This means that they can be used to communicate broadly with everyone within a region as well as to specific individuals with pinpoint accuracy.
How do they do it? With Bluetooth Low Energy (BLE) signals that can transmit through walls, making them more accurate than GPS or Wi-Fi. Beacon signals typically consist of three parts: A Universally Unique Identifier (UUID) which is specific to the beacon itself; a “major” which is specific to the region where the beacon is located, such as a store; and a “minor” which is specific to a place within the region, such as a department within the store.
Engaging with customers based on their specific interests
Marketers can use beacons to deliver in-store experiences that are unique to the individual consumer, such as promotions based on their interests. This way, they make the brand a part of the “mobile moments” when the customer wants a product the brand sells and uses their smart phone for instant gratification.
So, let’s say you just walked into a clothes store. As you enter, you’re greeted with a welcome message on your phone with a promotion customized just for you: 25 percent off your favorite brand of jeans. The store knows it’s your favorite brand because you’ve used the store’s app to shop for them and you’ve bought three pairs with your credit card in the past two months. Let’s also say your friend is with you and they receive a welcome message as well, but their offer is $10 off their favorite shirt brand based on their own unique buying behavior. That’s pretty cool, huh?
Now let’s say you’re wandering around the store when a a cool pair of sunglasses catches your eye. As you walk toward them, you receive a notification on your phone you can receive $5 off purchasing them if you submit your contact info for a drawing for a $100 gift card to the store. Now they’ve got you hooked.
Using beacons to drive sales and increase revenues
A recent survey of 100,000 mobile shoppers found that beacon-triggered messaging caused an interaction rate five times higher than traditional push messages without location context. This suggests that there’s an opportunity to drive sales with beacon technology, because according to a recent survey of U.S. consumers, 57 percent downloaded apps from their favorite brands. Of those, 68 percent enabled push notifications, and when asked why, 50 percent said they wanted to receive exclusive offers, 38 percent said they wanted to receive loyalty discounts, and 34 percent said they wanted to receive timely notifications about sales.
Beacons work by sending you messages on your phone through your apps when you enter a geographic region or when you get close enough to a beacon’s signal. These messages can be customized to your interests by using analytics to create behavior-specific triggers for push notifications. If done correctly, this lets marketers deliver unique in-store brand experiences to drive sales and increase revenues. Now all we need is an app to predict the future.