Beacons are a type of low-cost, micro-location-based hardware device that collects huge amounts of customer data, allowing retailers to send location-specific information directly to customers via their smartphone. They also serve as a valuable tool for people-counting and people-tracking, which can be as simple as logging how many people enter or exit a store, or as sophisticated as tracking visit frequency, time spent in store, and walking path once inside.
Customers benefit from alerts that can enhance their shopping experience, while retailers get valuable data, down to specific product interactions. According to Behavior Analytics in Retail, beacons are ideal for location-based marketing activities.
With such exciting potential, it’s no wonder beacon deployment and testing is rapidly increasing. In fact, the technology has gained so much popularity that it's forecast 400 million beacons will be shipped by 2021, according to ABI research.
How does beacon technology work?
Beacons are small, Bluetooth-enabled wireless devices that allow mobile apps and websites (that the user has opted into) to detect when someone approaches or leaves a location. Once deployed in store, they can broadcast relevant, localised information to portable devices within their range. Typically, retailers use beacons to establish when a customer is nearby, so they can send them timely notifications with useful information, like an upcoming sale or discount, or to promote specific products. This type of location-based marketing is known as proximity marketing.
Beacons also allow for trusted devices, and their users, to be tracked when they’re within range. This interaction, however, only occurs at the app level. For example, if someone were to walk past a retail store with beacons deployed, the beacon would broadcast a signal, which is picked up by a mobile app, triggering an automatic notification. Once inside, the beacon will monitor their movements – even determining how long they linger in a store aisle, or in front of a certain product.
Why should retailers use beacons?
Beacons can help retail marketers gain more insight into how many customers are visiting their store, and what they’re doing once inside.
Using beacons, retailers can find high-traffic locations in their store, and then optimise store and merchandise layouts, and product placements based on navigational patterns.
They can also tell which customers visit which stores most often, or those who regularly buy particular products. This data can help to establish a target audience, and indicate which products to feature in other location-based marketing campaigns – like a letterbox sample. To determine return on investment (ROI), a retailer could also use beacons to track changes in store as a result of the sample, like upsurges in traffic, or interactions with featured products.
Messaging, products, and discounts featured in a sampling campaign can also be reiterated in existing proximity marketing efforts. This means a target customer in a sampling campaign may also be targeted with a push notification when they’re walking past their local retailer. Given that customers may act only after repeated exposure, the combination of beacon and letterbox marketing – along with other online channels – can keep customers engaged through more frequent and varied touchpoints.
The potential for beacons to inform customers about products, discounts, and offers is clear. But, smart retailers will take advantage of the technology to support other localised campaigns, and use it to measure the offline impact of both online and proximity marketing campaigns.
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