Can Beaconing Make Shopping In Physical Stores Cool Again?

beacon-demo-500Retailers struggle with making their in-store shopping experience as fresh and novel as the online experience, with its endless aisles, one-click checkout, and limitless two-dimensional design potential.

Could brick-and-mortar stores do something so technologically cool as to create the kind of consumer connection hitherto only possible in an online environment? With its ability to merge the best of brick-and-mortar and online commerce, I believe that beaconing may be a whole new way to bring excitement back to shopping in physical stores.

This technology can help slow the migration to online channels, or at very least, help optimize the in-store sales opportunity. We have barely started to realize its potential.

How Beaconing Works In Retail

Beaconing is the ability to communicate with a mobile device that’s anywhere within about 150 feet of a beacon transmitter.  It has a microlocation capability that can locate a consumer within three feet.  This is a big step forward from GPS-based geofencing technology, which retailers used for a time to try and entice possible customers who were within a block to come into the store.

Beaconing gives a retailer the ability to digitally serve the customer, while in their store, with a plethora of offers and services. It allows a retailer to send targeted promotions to the consumer.  In signing up for the brand’s app, or even through other more general apps, the consumer has consented to this.  In two words, it’s suggestive selling.

With the massive amounts of data that’s kept on consumers, it’s possible to adapt these instantaneous offers to an individual’s likes, dislikes and behaviors.  It allows interactive capability with the consumer while she shops—essentially enhancing her experience to the level of having a personal shopping assistant along, one that’s right in the palm of her hand.  The reason companies have not brought beacon on board as part of their overall digital strategy is that there are few if any software applications to support beacon technology hardware.   And with the development of these apps, this could be the technology that helps drive consumers back into physical stores.

How To Use Beaconing Well

Now imagine this.  You go into a store and as you walk down an aisle, a digital sales associate falls into step with you, seems to know who you are, how you like to shop, and what you’re looking for.  This digital helper tells you about new products you’d like to try, uncannily seems to avoid the stuff you already have, and is able to gently guide you to items you were planning to buy, to complement the items already in your basket, but that are currently out of your range of vision.  Also, your digital helper is an inexhaustible source of information about the products, their manufacturers, craftsmanship, country of origin and designers. At its best, beaconing can play the role of this digital helper, and more.

Beaconing is the technology that crosses channels. It enables the combination of a traditional channel with a digital channel. It offers the ability to give consumers choices that go beyond what they find in the store, without losing sales.  Here’s an example:  a certain consumer is in the tool aisle at a home improvement warehouse, looking to buy a drill. The beacon knows it, provides information on three different brands in stock, and how they differ; or issues a coupon to buy the drill; or simply asks if the customer needs help with items within the area of the beacon.

The consumer is able to interact with the application, and potentially order items that are related to the drill, but not on the shelf—maybe a drill bit or an extension cord. The beacon-enabled mobile offering in the store, allowed a crossover to the digital channel, enhancing the buying experience for the consumer.  The store sold more goods, the consumer has a one-stop, 360-degree experience… everyone wins!

Who Is Using Beaconing Successfully?

While this technology has been around for a while, it’s not yet mainstream. Most retailers are still a distance from realizing the vision—it’s hardware without enough applications.

That said, Gamestop, the video game, consumer electronics, and wireless services retailer is in the early stages of using the technology. It began deploying beaconing in test-market stores in 2014 and expanded to 150 stores by the end of July 2015.  The chain has worked hard to use it to serve customers by providing ongoing promotions and offers that help customers purchase products at the most advantageous price. That effort includes a points-based loyalty program that rewards consumers with deep discounts earned through prior purchases.

Gamestop have also come to understand that their users need more information than what they can currently find on the package of their games. For example, gamers visiting the stores, are able to receive additional information on specific games – in this example, the beacon conveys detailed product information to shoppers via their mobile devices.  And of late, they have been providing video, product specs and consumer reviews at the exact time that they may be looking at a specific product in the Gamestop aisles.

The chain has also done a nice job of using beacon technology to identify shoppers upon arrival, providing  an experience unique to that customer. The ability to transmit information to their customer in a digital format is a natural for a product that is itself digital.  And ultimately, Gamestop is extending a digital experience to the aisle in a manner that their customers want to see it.

However, when it comes to the deployment of beacon, Gamestop is more the exception than the rule. But cross-channel technologies like beaconing are the next wave in digital commerce.  It won’t be long before beaconing becomes as commonly accepted as texting, as new channels are developed and old ones enhanced.  The consumer will have more choice than ever, and an enhanced experience because of the computing capability in their mobile devices merging with the communications capability of technologies like beacon.

What it boils down to is imagining, then developing the right applications. And then, brick-and-mortar retailers will finally have a way to compete with the online giants, using a whole new playbook.

Sam Cinquegrani is Founder and CEO of ObjectWave Corp

Partner Content

The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.