Beacon technology is poised to change the way brick and mortar businesses work, and for good. It will change the way consumers interact with brands and if properly implemented, this will not only ensure a seamless shopping experience but for retailers it means they get to reach the right person at the right time with transparent metrics to evaluate the performance. Much like the online shopping experience, retailers too can personalize their offers and products for their customers.

Now, beacons are here to stay, whether you are ready for a beacon-enabled future or not. Here are some stats to prove that beacons are the future of retail:

–      Retailers will invest around $2.5 Billion in IoT in the next 5 years, A huge part of it will be for Beacons. (Source: Juniper Research)

–      Beacons will influence retail sales of $44 Billion by 2016 (Source: Business Insider Report)

–      By the end of 2018 there will be 3.5 million active beacons in retail stores.

–      46% of retailers already have a beacon-enabled retail strategy in 2015. (Source: 2015 Store Operations Survey by Retail Touchpoints)

In the ‘2015 Store Operations Survey’, comprising a survey of 100 retail executives by Retail TouchPoints, retailers were asked: “What benefits have you seen since implementing beacon technology?”

The results:

–       71% retailers are able to understand customers’ interests and buying patterns using beacons.

–      65% feel they are able to target customers down to the aisle level

–      59% feel customers are more engaged in the store

–      53% retailers feel they are able to create more relevant and compelling offers in the store

–      24% retailers saw an increase in sales

–      24% retailers saw an increase in offer redemption

Well “Stats don’t lie”, do they?

Those are some astonishing numbers! Another important stat is that – 400+ million beacons are expected to be shipped within 5 years. Most of these will be used in retail. (Source: ABI Research)

Now this all goes to show that future is bright for retailers if they take advantage of the cutting-edge technology at hand and are ready to their retail strategy a step further.

Wait! What is a Beacon?

Now the idea is fairly simple, Beacon is small device that runs on battery can be installed on wall, countertop or a ceiling of a retail store and send out data strings to the Bluetooth receivers around them typically smartphones and all of this happens on a new technology called “Bluetooth Low Energy (BLE)”, Now it’s different than the Bluetooth we use today in 2 ways. Primarily because it uses very little energy and second it doesn’t requires all that tedious pairing.

Familiar with what Beacons are? Great!

So getting to the point,

In January this year we got a great opportunity to work a Major Electronics Retail Chain in Malaysia. About them: They are one of the Asia’s largest Electronics retail chains with presence across 10 states and 50+ cities in Malaysia.

In their effort to cement themselves against e-commerce giants they were interested in having an App developed, so that they could connect it with their backend inventory store management system and start out with delivering products at the doors.

We must say, not a bad strategy at all.

But provided that their retail chain was present across 10 States and 50+ Cities, we thought of something better.

As a part of the strategic consulting, we pitched them this crazy idea “Hey! Why don’t you take advantage of your already well established retail network and take it up a notch by exploring Beacon technology for your retail strategy?”

Then we explained it to them. The whole idea and strategy, and the real potential of beacon enabled retail strategy.

Their reaction: “Let’s Do It!”

And We Got to Work!

We charted out a retail strategy that would not only ensure high engagement between humans and nearables/Beacon but also offer a seamless shopping experience to their customers.

Beacon cannot work on its own, you need an app on your smartphone pre-installed, so that beacons can detect human presence using the BLE technology and trigger pre-programmed promotions and other messages. Now this would pose a problem since not many users would like especially download an application to engage.

For software side implementation of the strategy, we designed a very lite-app and pre-programmed it with all the promotions and deals we wanted the beacon to display. We also consulted them to offer free Wi-Fi, so that the users without any hesitation download the app from the App store.

The first thing we did was to analyze the performance of all the retail outlets across the country on the basis of the following grounds:

–      People passing by the store

–      People entering the stores

–      How many people end up buying.

–      Returning Customers

Here is a chart that depicts the average of these metrics across all the 50+ stores.

In regard with the discoveries we made,

We started with executing the Beacon-enabled retail strategy initially in 10 retail outlets of the chain as a trial run. We also leveraged a third party universal Beacon app which already serves a large customer base in Malaysia.

Step 1- Engagement

The aim was to engage with as many people as possible on the sidewalk or in the within physical range of the Beacons. Trigger the notifications about offers and products on their Smartphone’s and urge them come inside the store and checkout the products and offers.

Say you are walking by an Electronics store they are having some amazing deals on LEDs, Air conditioners and refrigerators, there is a beacon placed by the entrance gate that alerts you about the offers when you pass by.

If you are looking to buy an AC for the coming summer you’ll say “Let’s check it out anyway!”

And that’s how a Beacon by notifying people about the offers and products on their Smartphone’s engages with people.

That’s what exactly we did, we installed beacon at the entrances of all the 10 stores. They were used send out customized deals like:

Result:

Initially for every 100 people passing by the store only 25 People were entering the store. 30 Days into the campaign, for every 100 people, 55 people were entering the store on average, across all the 10 stores we targeted with Beacon-enabled Marketing.

Also, wherever possible out of the 10 stores we’re targeting, we also placed beacons at the entrance of the malls from the parking facilities. With customized messages like:

This way people while entering the mall, were alerted about the promotions and offers.

Step 2: Conversion

Our aim within the retail strategy here was to offer a frictionless and a seamless shopping experience to the people once in-store and provide answers to all their queries and in fact provide that human interface to this engagement. This will increase the chances, of them becoming a valuable customer.

Here’s how we proceeded with our in-store beacon enabled marketing to increase conversions and offer a seamless experience to the customers

First of all as soon as the customers entered the store they were sent a welcome message:

Then customers could choose which product are they looking for and then the Beacon would guide them, corresponding to their input or they could cancel the pop up for now and engage at wish.

We also strategically deployed beacons all around the store in all the sections of the store.

For example: If a customer is looking through the solar heating products, a beacon could trigger a message about the most selling product. Or which brand is most reliable based on the customer’s feedback.

Beacon could also recommend ‘frequently bought together’ products with the item you are thinking about buying and offer you a pretty sweet deal.

We used a special type of Beacon ‘Estimote Mirror’, when connected to any screen it will show personalized and promotional video content.

Say, you are in the computer section and looking through different laptops, a beacon could trigger a video of the product’s review.

Result:

We saw a growth of 150% on average across all the 10 stores in the number of conversions in just 30 days. This proved that beacon-triggered offers and promotions hold strong potential to influence in-store decisions.

Step 3: Happy Ending

The seamless shopping experience should not just end at engaging with customers when they are entering the store or while they are making purchase decisions, it goes till the time customer steps out of the store. Keep in mind, in a world where customer sentiment is constantly shifting and consumers have more options than ever before of where to spend their money? Customer’s loyalty is very important and rare.

Next step up in our strategy was to provider a frictionless checkout to the customers. So we placed NFC tag reader at the checkout points and after the customers have entered all the products they are buying, they just needed to open their favourite mobile wallet and wave the smartphone over the NFC tag.

Also, we took this strategy up a notch. Here’s how:

When a customer is stepping outside the store, beacon could trigger another message regarding an exclusive deal for a customer on their next return. Something like:

Result:

After improving the overall shopping experience of people, the number of returning customers grew.

Other Challenges

Beacon technology is here to stay, we are saying that repeatedly. But when it is poised to improve the profits of retailers, it also has some drawbacks.

Awareness

70% of consumers don’t know what beacons are, according to a recent First Insider Report. This isn’t a problem for beacon technology in and of itself as beacons can still do their job without the consumer knowing what they are. The problem with that level of awareness means consumers don’t expect to have beacon-powered experiences.

The App Problem:

Large retailers may not have issues getting users to download their branded apps, but small and medium-sized businesses certainly do. Although the solution to it is pretty simple for them, partner with a third party app that serves already a large customer base, this takes care of this problem.

The User Experience Problem

Most marketers mean well, but even well-meaning marketers fall into the spam trap in the pursuit of marketing performance. Bombarding users with too many promotional alerts can also work the other way around and may hamper the shopping experience.

The Big Day:

After a trial run of 30 days across the 10 outlets, the results were positive.