What are beacons? What role they play in marketing and retail? An overview to iBeacons and other contextual marketing tools

At the beginnings of times, there were QR Codes. They had their challenges and best practices. Then NFC became the new channel. It was good for Android devices, but they exist in the Apple domain for Apple Pay only. The new kid on the block is the beacon.Beacons - iBeacons and Marketing

The three methods serve the same purpose, to engage the customer through its “mobile sense,” at the right time in the right place. So, what are beacons? What role they play in retail?

Making sense of the “new sense”

It is well supported that the store physical surroundings have an impact on customers [1]. Retailers learned to pay attention to sensorial factors i.e. smells in the store, ambiance music, visuals, tasting stations and the capability to touch. The correct combination creates the right experience.

Customers have developed a “new sense”. Mobile devices became a natural extension of ourselves. We use them to sense and experience the world. Mobile devices are crossroads between the physical, brick-and-mortar world and the digital world. Through mobile, retailers have an excellent opportunity to augment, enhance, and enrich their physical presence with virtual content to create a unique customer experience in the store.

Mobile is the intersection of physical and digital worldConnecting customers at the intersection of physical and digital

Before reaching the customer in any way, we need to answer the question: What do we want to achieve? Then, evaluate on what channel is best to do so.

Location plays a key role in mobile engagement. When the customer is far, you want them to find you. When the customer is nearby, your goal is to bring them into the store. When the customer is inside, the focus should be in creating a unique experience that ultimately will result in more sales and recurring visits. How can we approach customers at the right place and at the right time, i.e. when they are THERE?

High-Tech Beacons Explained

iBeacons are lighthousesPicture a lighthouse. It has a single purpose, to emit light to signal location. If you are a cruise navigator, you look for those signals, and when you see them, you take some action. If you are a passenger sitting by the cruise deck pool, most probably you will ignore it. Note that the lighthouse only task is to emit light, and cannot know at any time who is on a boat or if there is a boat at all.

A beacon is like a lighthouse. Like lighthouses, beacons emit a signal, in our case, Bluetooth. It broadcasts that message constantly. Your mobile phone is like the cruise ship. IF you have an app in the background looking for the signal (like the navigator), and the signal is captured, an action can be triggered on your mobile device. However, if the app is missing, your mobile device is like the person by the pool, and will do nothing i.e. ignore the beacon.

Note that, if your customer has the app, but turned off the Bluetooth capabilities, it will have the same effect as blindfolding the cruise navigator i.e. it will never “see” the signal. Moreover, same as the lighthouse, the beacon does not capture any information. Its sole job is to transmit a signal letting an app know that you are there.

Simply put, a beacon will only interact with mobile devices that 1) have an app that knows what to do in the presence of the beacons, AND 2.) have the Bluetooth capabilities enabled.

Why should businesses use beacons?

In general, a business should use beacons, NFC, or other similar technologies, to reach customers through their “mobile senses,” and make a meaningful connection between the digital space and the here and now of the customer. Meaningful implies that the customer experience will be enhanced through ways that are unique to the medium.

beacons and couponsFor example, if the answer to the question “What do we want to achieve” is “I want to deliver a coupon to my customers when they are close to certain products”, then I’d suggest you install an old fashioned blinkie coupon dispenser in front of the product. Then you said, “wait, but I want to make it personalized, and provide a different discount if the person comes frequently, and change the discount depending the time of the day.” Now we need something different, and we can start talking about how we can achieve this using any of the means mentioned before.

If all you had in mind is to find customers and greet them with a welcome push message, have one of your employees say “welcome” to every person that comes through the door. The mobile medium is unique and should be used to provide real value.

“The Old Pillars of New Retailing” can support your beacon strategy

In the April 2001 HBR issue, Leonard Berry, IHI Senior Fellow and former AMA president, provides an interesting perspective: “The wishful thinking holds that retailers will thrive if only they communicate better with customers through e-mail, employ hidden cameras to learn how customers make purchase decisions, and analyze scanner data to tailor special offers and manage inventory … technology can help any business operate more effectively, but many new advances are still poorly understood—and in any case, retailing can’t be reduced to tools and techniques.”

He further describes in the article the five pillars that support successful retailing operations: solve a customer problem, treat them with respect, connect with their emotions, set fair prices, save them time.

More than just finding customers in a store.

A great part of our work as marketers is storytelling. Therefore, take mobile in general and beacons in particular as another chapter in your customer journey. That journey started long before they came to the vicinity of a beacon in your store, and will continue long after they leave. Integrate that part of the interaction with what happened before and what will happen after that.

Adapting Professor Berry’s recommendations, use mobile and beacons to solve a customer problem and provide real value. Respect their privacy. Employ technology to create unique moments and experiences worth of sharing. In other words, find the technology that makes sense for your business and marketing goals.

Summary and open questions

  1. Beacons allow you to reach customers’ mobile devices at a certain place and certain time.
  2. To do so, customers must have an appropriate app installed, and have the Bluetooth capabilities turned on when they are near the beacon.
  3. A beacon only transmits information. It will not read any information from the customer device. On the other hand, the app installed can share information with the world.
  4. Mobile in general and beacons, in particular, should be used to enhance the shopping experience and augment customer engagement.

Will 2016 be the year of Beacons and Contextual Marketing? Let’s keep the question open. In Part II, I’ll share some good use examples and best practices. Before that, do you have any beacon marketing stories you can share? What are the main hurdles to try this in your business? Please share your question and experiences in the comments section.

NOTE: This article was originally published in my LinkedIn profile