Seven Things Every Brand Should Know About Beacons

Low angle view of a red buoy at dusk. Land can be seen across the water. Horizontal shot.

Claire Mula of in-store technology provider Sprooki tells us everything we need to know about beacons.

Claire Mula
Posted by Claire Mula

Location can be a powerful tool for any consumer brand seeking to stay relevant with today’s connected shopper.

For brands selling their products and services via a physical channel (where 90% of today’s retail turnover still resides), understanding the influence of location and getting a handle on tools is vital. It’s one of your competitive advantages over pure-play retailers.

This year, the race for relevancy and location has shifted indoors thanks to beacons. Here are seven things every brand should know about beacons.

1. Beacons don’t detect anything, mobiles do

Beacons are small devices no bigger than a thumb drive that emit a low-energy bluetooth pulse, very much like a lighthouse. This is not the same bluetooth we use to pair our mobile to our car speaker system or mouse to PC. It’s a power-saving version of that, known as Bluetooth Low-Energy (BLE) or Bluetooth 4.0.

Estimote beacons

Smart devices such as certain mobile phones can recognise the bluetooth low-energy signal. Unlike cell towers or Wifi sensors, beacons themselves do not receive any data – a common misconception. They simply send a signal and an identifier at regular intervals. Sort of like saying, “Hi, my name is Kevin Beacon”.

Developers can program applications to “do something” once they detect the specific beacon, such as trigger an alert notification, launch a website or report back that a device has been in that location.

2. Accuracy is a range, not a number

Whether it is to help consumers locate your brand on shelf or drive nearby shoppers in-store behind targeted messages and offers, location-based shopping tools can be a competitive advantage for today’s consumer brands.

Beacons mean even greater accuracy in presence detection and that means more precise communication is achievable. Even indoors where GPS is off-limits, a beacon can trigger an action, such as a message, down to a range of one to five meters.

However, accuracy differs depending on whether the application is open (on screen) or in the background (not on screen or closed). Every operating system interacts with beacons differently so the experience may differ between shoppers using Android and iOS as well as between phone makes and models. In short, targeting accuracy is a range.

3. Consumers in the privacy driving seat

When given the choice, consumers will overwhelmingly choose an opt-in approach to location versus no location-option at all. Beacons facilitate that opt-in choice.

Remember, beacons do not “track” or detect anything. Devices do. So whether or not shoppers wish to experience location-based services is fully in their own hands.

In order for devices to detect a beacon, consumers must first turn on location services and also turn on bluetooth.

For anything to happen, consumers then need to have installed an app, which has already been “paired” by the developer with the beacons. Apps facilitate opt-in through acceptance of terms and privacy policy as well as registration.

Just like the “do not disturb” sign on your hotel room door, these settings can be turned off and on at any time. So the approach via beacons is very much opt-in and puts the consumer in control of location data.

4. Analytics Measured

Beacons can be another source of location data and analytics for physical spaces.

Unlike traditional forms of footfall measurement, such as traffic counters and more recently, indoor positioning through wifi, beacon-based data is available only from those shoppers who have a compatible app installed (with location and bluetooth settings on).

At this stage, beacons alone are unlikely to be a replacement for traffic counters, but can facilitate a deeper understanding of segments of shoppers, such as measuring dwell time, frequency or favourite paths of the top spending customers.

Beacons can also be placed on product displays or even products themselves in sticker format, to learn how frequently and long customers interact with the products.

5. Location + Personalisation Mash Up

While location is important, it is not the only form of targeting. When coupled with other data, such as shopper profile, preferences or past purchases, beacons can facilitate incredibly personalised communication, taking brand engagement and customer service to a whole new level.

How many store loyalty programs fail to engage or incentivize shoppers when they are most likely to respond?  Beacons can help brands to communicate things like how many points or visits to their next reward as they enter the store. Or even reward shoppers simply for walking into a store (or changing room) for the third time this week. This has the potential to drive even greater frequency and ROI from the traditional brand loyalty program.

For consumer brands who have invested in data and customer intelligence, coupling location with customer data can result in 500%+ lift in response and conversion rates over less targeted channels such as email, mobile ads or eCommerce via mobile internet.

6. Are you compatible?

Not all devices are currently compatible. It is estimated around 90% of iPhones (version 7.0+) and 24% of Android phones (version 4.3+) in the U.S are already compatible with Bluetooth low-energy. We expect this to be higher in Asian markets where phone replacement is high.

Most new devices from the major manufacturers are compatible and it is only a matter of time before the technology becomes pervasive.

Despite the growing technical compatibility, there are other human issues to address. Communication aimed at educating shoppers to keep bluetooth switched on, to experience all the benefits highly accurate location-services brings. Such as more relevant and timely content or rewards, which add value to the shopper journey.

7. Beacons are Open for Business

You don’t need a physical store to use beacons. Any brand can ride on beacon devices, provided they are granted access.

Beacons may not be “married” to one brand’s app. They may be opened up to third party apps to use.

Those brands who “own” the physical space, such as malls, supermarkets, pharmacies, department stores, even exhibition and conference venues or transport hubs can keep their beacons “open” for sponsors, advertisers and suppliers to tap into in their own apps.

Eventually, a support infrastructure, which enables open access to beacon hardware, should lead to a win-win for both consumers, stores and the brands they love.

Claire Mula is the managing director of Sprooki.