‘Beacons are dead,’ says CEO of a retail analytics firm
The main reason, according to Euclid Analytics’ head Brent Franson: consumers aren’t yet using their smartphones the way beacons assume.
An assortment of beacons from (starting upper left) Gimbal, Kontakt.io, Estimote, Radius Networks, GPShopper, Aruba
“Beacons are already dead.”
That’s what Euclid Analytics’ CEO Brent Franson thinks. His company provides engagement and analytics solutions to retailers and, he told me, his firm is happy to work with beacons.
If they did something customers really wanted.
Beacons offer hyper-granular marketing directed at customers standing in specific spots in stores, like in front of counter 2B. The idea has been that retailers could then direct product info or a discount coupon about the socks on counter 2B to that customer’s smartphone, standing right there.
But, Franson told me, the reality is different for retailer-focused beacons. (There are, of course, use cases for beacons outside of retailers.)
First, it’s a significant amount of effort for that scenario to take place. The beacons must be installed and maintained, and fleet maintenance is sometimes problematic, because the devices use short-range Bluetooth Low Energy connectivity. Some vendors integrate WiFi with their beacons, or have other workaround solutions, but those alternatives aren’t standard.
Then there’s the issue that, for standard beacons, the consumer needs to download a supported app. Some retailers share an app, but it’s still a download. Google offers Eddystone beacons, which broadcast a URL to a compatible browser and don’t need an app, but you need the right browser. And, at the moment, Eddystone is not widely deployed.
But the real reason Franson is bearish on beacons has to do with consumers’ current shopping habits.
‘Too advanced for consumers’
We’re barely at the point, he said, where a consumer looks at her smartphone when she enters the store itself, to see if that store offers any new product info or sales. It’s not yet a common use case, although it does happen.
He points to Foursquare as a location application where the unit is the store, or restaurant, or landmark, not this spot in front of this mannequin wearing this outfit. Foursquare, he noted, is using GPS, and functions as a kind of “better Yelp,” not as a micro-targeting platform to a finely-located point in a store.
Beacons offer greater granularity than GPS, but Franson pointed out that it’s not common customer behavior to check a smartphone at each new point in a store to see if there’s some new product info or discount coupon about this display.
In other words, beacons are a high-resolution solution to a problem that doesn’t yet exist, for a behavior that consumers don’t yet have.
“The use case is far too advanced for consumers” right how, Franson said.
This kind of shopping habit might evolve in a decade or so, he said, after consumers get accustomed to looking at their phones when entering a store, followed sometime later by looking at their phones at multiple points throughout the store.
But at that point, he predicted, the micro-granular targeting will be made available by some broadly-deployed technology, like geo-magnetic positioning, or higher resolution WiFi/GPS.
Franson noted that some of his retailer clients are using beacons to test out “stores of the future” concepts, but they’re “still in the experimental phase, and a lot of experiments are failing.”
“I’m rooting for beacons,” Franson said, “but I don’t think they’ll succeed.”
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