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Although the US beacon-triggered sales topped $ 44 billion last year, the beacon technology hasn’t reached mass adoption in retail so far. What’s out there for beacons and how can your company benefit from using the new technology in stores?

Beacons: another gimmick or the revolution in retail?

In 2013, Apple became the first company to manufacture a beacon – a small electronic device that broadcasts radio signals which can be captured and processed by BLE-enabled smartphones and tablets. Beacons feature microcontrollers and Bluetooth radio chips, consume little to no power and are relatively inexpensive; you can get a high-quality beacon for just $ 30.

Use of beacons in retail

We’ve seen beautiful ad banners integrated into mobile app UIs, digital coupons and game apps promoting real-world retail events; beacon marketing is a logical follow-up to traditional mobile marketing strategies employed by tech-savvy retailers.

  • In order to distribute promotional content through beacons, retail companies develop dedicated shopping apps or partner with app vendors like RetailMeNot. Once a user who’s got the app installed onto his smartphone happens to be within the range of the beacon signal, he receives a notification (latest offerings, discounts, promo codes, etc.);
  • Customers who click on beacon notifications (recent studies prove 60% of consumers do engage with beacon-triggered content) and walk into a store receive more notifications including personal shopping tips based on their previous buying activities and in-store product/navigation data;
  • Beacons track customers in store, thus providing analytics similar to that of an e-commerce website. Marketers, in their turn, can leverage the data for crafting ads and promo content the way they do retargeting.

What’s Next for Beacons in Retail?

Do beacons really increase in-store sales?

  • 65% of retails who employ the beacon technology claim they are able to target customers “down to the aisle level”;
  • 24% of beacon adopters have registered a steady growth in sales;
  • 59% of customers who receive beacon notifications feel more engaged in stores.

McDonalds, the world’s biggest fast food chain, installed beacons at 15 restaurants across Istanbul and partnered with Shopping Genie (a popular Turkish shopping app) to distribute coupons among the app users. The company was fairly pleased with the results of the proximity campaign: 30% of customers who had received promo messages stopped by McDonalds to buy a coffee and get a free beverage from a new drink line; the conversion rate was estimated at 20%.

Another example comes from Tesco, the third largest retailer in the world. Alongside Unilever, the company installed beacons and offered discounts for Pink and Black Magnum ice cream via the Mpulse app.

And here’s Macy’s. The US department store turned to the innovative technology after a disappointing 2014 holiday season. In 2015, Macy’s held a beacon-assisted “Walk in & Win” campaign offering customers to score $ 1 million in gift codes and boosted their app usage by 16 times.

It’s no wonder beacons were all over the Internet last year!

In 2017, however, a new type of beacon-related Google search queries has emerged; now companies wonder whether beacons live up to the hype.

What’s Next for Beacons in Retail?

Using beacons in retail: what the future holds…

Although merchants haven’t adopted the new tech as quickly as Forbes, CNBC and Business Insider expected, the latter reckons there will be 4.5 million beacons deployed across US stores by 2018 (up from 500 thousand units in 2015).

What factors will increase beacon adoption by 900% within just three years?
  • Smartphone sales (almost 1.5 billion units shipped in 2016);
  • Mobile Internet Usage (which now accounts for 51.26% of all Web traffic);
  • Immense popularity of discount-tracking and shopping mobile applications (55% of customers have a retail app installed on their mobile devices).

Smartphones have become the very tool that helps retailers blend the physical and digital worlds and gain invaluable data on customers’ in-store activities and shopping habits.

However, the future of retail is not limited to beacons. Asif R. Khan (Location Based Marketing Association) is excited about mobile payments and location-based connectivity. Pavel Shylenok ( bets on RFID tags and smart asset management. Thomas Walle, CEO of Unacast, believes more companies will start monetizing their beacon-generated data. And don’t forget about VR-assisted shopping tours, Augmented Reality apps that help retailers reduce return rates by 30% and machine learning algorithms that boil tons of sensor data down to something meaningful.

The retail technology landscape is rich and ever-changing, so perhaps it was a mistake to pin hopes on beacons alone. Initially marketed as a cure-all for brick and mortar stores, beacons have become an invaluable source of customer data. Provided you address a reliable e-commerce solutions services company and develop a sleek shopping app, beacons will certainly take your retail business to the next level!