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MarTech Landscape: What is a beacon?
The location-based devices have made a beachfront in physical stores, but the pending question is whether consumers are ready for them.
Consumers’ smartphones can be tracked by GPS coordinates and other techniques, but those are largely broad-brush. Beacons are devices that are designed to support very granular targeting, such as sending a coupon for red sneakers while you’re standing in front of the rack with red sneakers.
In this installment of MarTech Today’s MarTech Landscape Series, we explain what beacons are and how marketers can use them.
A standard beacon, as its name suggests, is essentially a lighthouse.
But instead of a beam of light showing ships where the shoreline is, the small device — mounted on a retailer’s ceiling, wall or counter — broadcasts its location ID again and again to a supported app in nearby consumers’ phones. Standard beacons usually conform to Apple’s iBeacon specs, introduced in the summer of 2013 as the company’s implementation of the Bluetooth Low Energy standard.
The app receiving the location ID was developed and provided by the retailer, or it is a generally available app supported by various retailers. When it receives the beacon ID, the app relays that info to the retailer’s server via 3G/4G or the store’s WiFi (if the consumer has access). The server’s software determines that the location ID refers to, say, the red sneaker aisle at the Target store in Wilkes-Barre, Pennsylvania.
The server then returns whatever the retailer’s marketing department has determined might be best for such customers at that location and that time, such as a coupon, a sales announcement or product info. And the marketing department can determine how many consumers (with the supported app) have visited that aisle over the last week, they can target that consumer for remarketing followups, and — if the user has self-identified through the app — they can add the visit to the identified consumer’s profile.
But this scenario for a standard beacon has several hurdles.
First, and most importantly, the consumer must download a supported app for that store, make sure Bluetooth is enabled, and then agree to share location data.
And that short-range broadcast can be picked up by a supporting browser — most current browsers except Apple’s Safari — instead of requiring the download of an app. A user with such a browser can then see a notice on her smartphone about nearby beacons. When the notification is selected, the transmitted web links are shown. Each web address, when they are clicked, can then call up a web page or a web-based function.
Although best known for their potential uses in physical stories, both kinds of beacons can also offer up more than just coupons or product info.
They can support the display of a menu for potential patrons outside a restaurant, an exhibit guide for museum attendees, or an indoor map for a large retailer. They can also be used for personnel management, such as a card-sized beacon from Poland-based Kontakt.io that can fit into someone’s shirt pocket and act as a key card. Or bus passengers, when at the stop, can automatically get updated transit times.
Kontakt.io has been in the forefront of adding capabilities to beacons, including support for do-it-yourself interaction chains via the IFTTT ecosystem, support for NFC or RFID, and adding the ability for remote monitoring of beacons in multiple locations. Short-distance Bluetooth Low Energy beacons, by themselves, cannot be remotely managed to track battery charges or other issues.
While beacons are still evolving, there are mixed reports about whether they are a good deal for businesses or consumers.
A 2016 study by PR firm Walker Sands, for instance, found that a third of the top 50 US retailers planned to employ beacons last year. Additionally, the devices are making their way into a variety of customer-facing environments beyond physical stores, including movie theaters and sports stadiums. The Q2 Proxbook report from proximity marketer Unacast found that 93 percent of Major League Baseball stadiums are using beacons.
But the Walker Sands report, which surveyed over 1,400 consumers, also found that 64 percent expressed concerns about privacy and message overload, and, to date, only 6 percent of consumers have used beacons.
However, 70 percent would accept beacon-based push notifications and in-store tracking if they received enough benefit, such as price discounts.
Doug Baldasare, CEO/founder of in-store charging station ChargeItSpot, said via email that “wider beacon adoption has stalled among retailers,” because of the consumer opt-in required.
And Euclid Analytics head Brent Fanson told me recently that beacons have a long ways to go.
While he cited the obstacles of downloading the right app or browser, Fanson tagged the main issue as consumer habits.
At the moment, he said, customers are not geared to looking at their smartphones for in-store info when they enter a store. It’s not yet a common consumer habit. It may become a habit in time, but by then, the technology for hyper-localized marketing may have changed.