Beacon technology is radically transforming the everyday retail experience, and as it proves increasingly effective at digitally enriching consumers’ brick-and-mortar interactions, the industry is poised to grow tenfold.
There’s a truism that says all business is based on relationships. And counterintuitively, its real-world manifestation has hurt brick-and-mortar retail locations as of late. The ability of e-commerce competitors to comprehensively track a customer’s digital profile – including purchasing history, preferences, redeemed offers, and the frequency and duration of visits to a given site – allows them to personally curtail directed offers, promotions, and web content in real time. Conversely, until a consumer at a physical retail location swipes his or her loyalty card at the register, a store learns nothing about them.
Well, that was the case until beacons completely shifted the balance of power.
An in-store beacon – a device that sends messages to smartphones and tracks customers through Low Energy Bluetooth (LEB) technology – bridges the gap between a customer’s digital and physical shopping experiences. As a customer walks into a retail location, beacons identify the shopper and their personal profile, sending them targeted promotions, coupons, loyalty program signup options, and information as they traverse the store.
Imagine glancing at a pair of jeans on macys.com – as you walk through Macy’s the next week, you pass the same pair of jeans, and get sent a personal message offering 20% off. That’s the newest form of relationship building at work.
And so although “catch-all” digital services and lifestyle brands like Amazon, Zappos, Warby Parker, and Bonobos have come to dominate the industry, retail stores are looking to this new relationship to make up ground, and are already witnessing signs of success; in this year alone, beacon technology is set to drive $4.1 billion in in-store sales. By 2016, that number is expected to skyrocket exponentially to $44 billion, according to Business Insider. It doesn’t take an advanced degree to see the trend.
Moreover, it’s not just a few companies that are prepared to capitalize; last year, nearly half of all Top 100 retailers tested out beacon technology, according to Integrated Solutions for Retailers. Unsurprisingly, digital leaders have spurred the transition – Apple’s iBeacon has incorporated this technology into existing iOS systems, allowing smartphones to send and receive beacon messages. And last week, Google released Eddystone, a free, open-source, and platform-agnostic beacon format.
Sure enough, major retailers like Macy’s, Target, American Eagle, and Best Buy have already installed similar technologies in thousands of retail locations, thanks to the tangible (and sleek) hardware provided by companies like Estimote.
So as the digital is increasingly woven into the physical to create innovative omnichannel experiences, companies must learn to integrate their existing strategies with innovative and diverse technologies. Through collaboration with digital playmakers, retailers have gained the ability to paint hyper-contextual portraits of their customers. And to ensure success in the coming decades, companies must partner with these transformative leaders in order to secure an increasingly digitized competitive edge.