Article

James Carter
James Carter 29 June 2015

Beacon Technology: Why The Slow Uptake?

Beacon technology could change the way people shop in stores and completely revolutionise how retailers collect consumer data and interact with shoppers.

Beacons have been around for a couple of years now and are a new approach to solving an old problem: One of knowing when someone or something is in a specific location, how long it has been there and when it leaves.

 

The potential is massive: Beacon technology could change the way people shop in stores and completely revolutionise how retailers collect consumer data and interact with shoppers. Retailers can use beacons to solve a plethora of use-cases including triggering location-based features on customers’ smartphone apps, targeted offers, in-store maps, and eventually hands-free payments.
 

So far, however, the uptake has been slower than originally predicted, but we are now seeing various deployments across the UK, including Regent Street and it is certainly front of mind for many brands that we speak with.
 

So why has beacon technology not seen the surge in popularity that it surely deserves? I can think of three stand-out reasons:


Lack of app penetration

One reason we’ve seen is that deploying Beacons in store is the easy part of a Beacon strategy. But Beacons alone are of no use without a device to ‘hear’ the beacons, and for this the brand needs an established App that their customers have downloaded and participate in. The nature of app engagement is slightly different from standard browsing and, particularly with mobile browsing and responsive design now commonplace, consumers now need a good reason to download a brand app in the first place. For brands that are not there yet, beacon deployment is a small task at the end of a big shift in brand and engagement strategy, and for this reason, it may not be viable.
 

One furniture retailer we spoke with recently had a great strategy for Beacon technology across their physical stores. Furniture showrooms are typically large scale with a few clearly defined areas, and the buying process usually involves some kind of in-store consultation or interaction. So the brand realised they could use iBeacons to track time in-store and time in department, to determine which store advisor or specialist should attend to them. Alternatively, for non-buyers, they could use the data later on to send personalised messages and offers based on the in-store behavioural data collected. Only one problem – no app!
 

Contrast that with a food magazine app that lets you browse and save recipes, browse offline, create cookbooks etc, etc. This is a great example of app engagement, but there’s no store in which to deploy the beacons!
 

Problems with device interaction

Another reason may be the way iOS and Android devices work differently with Apple’s leading iBeacons technology. Whereas iOS devices (post iOS 7) constantly scan for iBeacons and wake up the relevant app when they come into range of an iBeacon – even if the app is closed – Android devices do not have a beacon system at operating system level. This means that Android Apps must therefore scan for iBeacons on a regular interval, rather than being managed by the operating system. The inevitable detrimental impact on both battery life and user experience is likely to be a major factor in the uptake of iBeacons, certainly for now.

 

With all that said, it will be interesting to see how retailers who have deployed iBeacons and have sufficient app penetration actually use the technology to drive customer engagement – and ultimately, revenue.
 

Short-lived novelty factor

As a consumer myself, I have already experienced a couple of brands’ iBeacon strategies in the real world, and the novelty factor is certainly there. Receiving a push notification with an in-store offer, while I’m in store, is something new. But thinking back, this is the equivalent of receiving a generic popup on the home page of a website – because I’m on the website. I’m not sure if that strategy ever had a novelty factor – but it’s long worn off if it was ever there at all.
 

And once the novelty wears off, it’s almost too easy for consumers to “unsubscribe”. It is a 5-step process to disable location access for an App on iPhone, but it’s only two steps to remove the offending app from existence! Brands are likely to be treading carefully in their adoption of this revolutionary new channel. So how will they leverage beacon technology without very quickly suffering from Beacon Fatigue?

I’m looking forward to seeing brands using the location information from beacon technology in conjunction with everything else they know about me, to become more relevant. Not just with push notifications and in app messaging when I’m in store. For example, it may not be relevant to message me while in store, but becoming more relevant across all channels based on everything they know about me, including my in-store behaviour.
 

The smart marketers will be using beacon data in conjunction with information from across the enterprise to target me.

Find out more on the future of Technology at our DLUK - Trends Briefing on the 24th September 2015

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