Adoption of beacons—the Bluetooth-enabled sensors that connect with nearby mobile phones and tablets—is spreading. Nearly one-third (32%) of the Top 100 retailers in the United States will have deployed at least some beacons this year, according to Business Insider, and 85% will have beacons by the end of 2016.
More than half of the top retailers in North America are now testing beacons, according to Boston-based mobile platform Swirl Networks, and national retailers including Alex & Ani, American Eagle, Lord & Taylor, Macy’s, and Urban Outfitters have plans for an expanded rollout.
“Based on promising early results, a number of the largest national retailers are in the process of deploying beacon marketing capabilities nationwide,” Rob Murphy, vice president of marketing for Swirl, told Retail Dive. “Beacon marketing programs will likely be prominently featured during this year’s holiday shopping season.”
Looking to the beacon
Following tests at flagship stores in New York City and San Francisco, Macy’s is installing more than 4,000 beacons from Redwood City, CA-based ShopKick at locations nationwide. The chain expects to complete ShopBeacon deployment this fall to issue personalized deals, rewards, and recommendations, and by spring 2016 shoppers will be receiving tailored offers by department.
ShopBeacons will be active in more than 1,000 retail stores by the end of this month, including Macy’s locations and more than 100 American Eagle stores, ShopKick notes.
“Beacon technology has been met with huge enthusiasm among retailers,” said ShopKick cofounder and CEO Cyriac Roeding in a release.
Beacons are also appearing in hotels, airports, stadiums, museums, and conferences to help drive the consumer experience. Likely the largest single deployment to date, this year’s South by Southwest (SXSW) will use more than 1,000 Apple iBeacons and a dedicated app to allow festival attendees to check in at venues, find out who’s nearby, and check out the more than 2,000 acts and seminars scheduled.
London has equipped a mile of Regent Street—the city’s main “high” street or shopping district—with beacons in conjunction with an app from Seattle’s AutoGraph that allows users to swipe the screen to indicate their brand likes and dislikes. With it, shoppers can choose to receive offers from any retailer on the street, including Uniqlo and Burberry.
Influencing purchase patterns
Business Insider says that beacons will influence more than $4 billion in U.S. retail sales this year—a scant 0.1%—but that number will increase tenfold to reach whole numbers in 2016.
Swirl, which has helped Lord & Taylor, Urban Outfitters, Alex & Ani, Kenneth Cole, and Timberland stores install its beacon-enabled indoor mobile marketing system, says in-store beacons have a dramatic impact on shopper behavior.
Based on in-store campaign performance and shopper surveys conducted during the 2014 holiday season, 60% of shoppers engaged with beacon-triggered content, the company says, and 30% took advantage of a beacon-triggered offer.
“Proximity marketing has the power to transform the customer experience, increase brand affinity and drive sales uplift,” said Hilmi Ozguc, Swirl’s founder and CEO, in a press release. “Early adopters are seeing remarkable results and generating highly valuable learnings that they are using to optimize future campaigns.”
Swirl’s data also indicates that beacons can have an effect on conversion and loyalty, with 73% of shoppers indicating that beacon-triggered content and offers increased the likelihood of purchase during a store visit, and 61% saying they would visit stores with beacons more often.
Selling to the converted
Numbers like these tend to skew high since consumers must opt in to see whatever the beacon is offering, not to mention download an app and remember to turn it on while in stores. If a retailer can get a person to take these steps, it has an excellent prospect.
Most consumers are open-minded if it means getting a deal, though.
“Consumers to date have been enthusiastic about opting in to beacon marketing programs,” Murphy says. “As long as retailers and app publishers communicate the benefits of beacon marketing at opt-in, consumers are more than willing to try it out.”
As with any form of advertising in a media-saturated marketplace, he adds, the key is relevance. “Consumers are willing to participate if the content and mobile experiences they receive are relevant and valuable to their shopping experience,” Murphy says.
Mobile coupons and loyalty programs seem to be leading adoption and usage.
“Retailers are evaluating a number of different approaches for creating value for in-store shoppers,” Murphy says, “including triggering customer service features, displaying loyalty program cards and generating rewards, delivering exclusive offers, alerting the shopper to current sales, and promoting social media programs.”
Retailers get the added benefits of getting to know and influence their customers’ and prospects’ shopping behaviors better and controlling in-store access to information—thereby heading off showrooming.
“It’s those technologies that can have a multitude of purposes,” Margot Langsdorf, ShopKick's vice president of Client Services, told Retail Dive. “Beacons allow you to deliver a more relevant, more personal message in-store to influence behavior in real time.”
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