Beacons are small radio transmitters that can communicate with smartphones once they are within a preset distance using the Bluetooth Low Energy platform. The technology is the logical extension of geo-fencing, which relies on GPS tracking to send messaging such as coupons and advertisements to app-enabled smartphones once they enter the defined radius of a store. Beacons take this messaging capability indoors, where GPS tracking is much less effective.
Beacon technology, which is emerging from beta testing, appears ready for widespread adoption as retailers start to grasp the potential of communicating with consumers who are either nearby or already in the store. To receive these notifications, consumers must install an app that decodes the incoming messages, which may apply to an entire mall or specific merchants, depending on the interests of the consumer. The app does not need to be active to alert consumers to incoming messaging as the coded message provides automatic activation and then displays the broadcasters’ information.
Beacons are getting a lot of buzz lately due to their ability to send targeted messages to shoppers who are walking by a store in a mall, into different departments within a store, or are near counters or other displays. Messages that are sent by a beacon can be tailored in terms of specificity, depending on the characteristics of the broadcast area. For example, the messages from a beacon broadcasting to people walking by a location in a mall could provide information on storewide promotions such as “buy one, get one free”, “20 percent off today”, “gift with purchase”, etc. As a shopper walks into a cosmetics department messaging can become more specific, targeting specific manufacturers or promotions. As a customer approaches the counter of a specific product line, the messaging can be refined further to deliver information on specific products.
An example of a specific application of beacon technology is Universal Display’s placement of beacons in mannequins that are purposed for window displays. The broadcast distance is set for a radius that sends messages to people who pass by the store’s front display window about the apparel, handbags, and other accessories that are part of the display. The app even directs consumers to the store’s shopping cart to enable purchases without entering the store.
As retailers ramp up for beacon technology that broadcasts their messaging, the one uncertainty is how consumers will react to potentially being bombarded with messaging as they walk past the storefronts in a mall or from department to department once they are inside a location. For some, a constant stream of promotions, coupons and advertisements may be a fantastic addition to the shopping experience. For others, especially for people who combine shopping with socializing, that same type of data stream may seem like an intrusive nuisance. With widespread adoption and implementation of beacons, the consumer reaction to a high volume of serial messages will likely be one of the toughest tests for the technology.