Beacon technology in retail has been generating buzz since Apple introduced Bluetooth beacons to the market in 2013. By 2016, beacon technology in the retail industry was worth $280.6 million, and it’s projected to reach more than $26 billion by 2026.
But for some, beacons in retail are still a mystery. Beacons are small, battery-operated wireless devices that transmit Bluetooth signals to nearby smartphones. In the context of retail, beacons reach out to customers that have Bluetooth enabled and the right retail apps downloaded onto their phones.
In this article, you’ll learn what beacon technology is, the benefits of beacons in retail, and tips on how to implement beacons in order to drive customers to your business.
Table of Contents
What is beacon technology in retail?
Beacons in retail involve small hardware devices that transmit Bluetooth signals to nearby smartphones. In a retail store, these Bluetooth beacons communicate with shoppers who have Bluetooth enabled and the relevant retail app downloaded on their smartphones.
The main use of beacons in retail is for proximity marketing—sometimes referred to as proximity marketing beacons or proximity beacon marketing. You can use location-based notifications for promotions and other alerts to target nearby customers.
Image: BLE Mobile Apps
For example, a customer walks into your clothing store browsing for a new pair of jeans. Suddenly, their smartphone gets an alert from your business with an offer for a 10% discount if you make a purchase in the next hour.
Beacon technology is already used by some of North America’s top retailers, including Macy’s, Target, Urban Outfitters, and CVS. Its continual rise in popularity is expected to help reinvigorate brick-and-mortar retailers, offering customers customizable shopping experiences that can’t be replicated online.
Attract local shoppers with Shopify
Only Shopify gives you all the tools you need to reach new customers and keep them coming back. Attract local shoppers on Facebook, Instagram, and Google, boost sales, and run your business from a single place.
The benefits of beacons in retail
There are numerous benefits to adopting beacon technology in your retail store. Ultimately, it enables you to create more tailored experiences for customers, thereby deepening relationships. In this section, we’ll break down a few more benefits to using beacons in retail.
Gone are the days when retailers could rely only on print, TV, and radio advertisements to drive customers to their stores. Now, shoppers expect more tailored messaging, with personalization that makes sense. Not only can beacon technology provide that, it can trigger the ad based on a customer’s proximity to the store.
This helps troubleshoot some of the physical limitations of brick-and-mortar stores.
Now, shoppers can be marketed to at the right time and in the right place.
Just as ecommerce businesses like Amazon offer customers personal shopping recommendations based on previous purchases, beacon technology can do this in the context of brick-and-mortar stores. Everything from coupons to deals to product recommendations can be tailored to individual customer preferences and shopping habits.
This not only helps develop long-term customer loyalty, but a more engaging shopping experience as well.
While you employ sales associates, they can’t always be available to help every customer. Personalized shopping through beacon technology helps bridge that gap.
Tracking shopping habits and preferences allows retailers to access insightful consumer data. For example, retailers can analyze what day of the week and time of day shoppers are more likely to download and use certain coupons. From there, they can take a look at demographics and other connecting points, such as what other items are purchased on the same shopping trip.
Mobile app use
Shoppers often download apps to their smartphones and forget they exist. Beacon-triggered notifications not only act as a reminder, but increase interest in using the app.
By leveraging beacon technology, apps can become even more useful and engaging tools for shoppers.
Examples of using beacons in retail to boost sales
Beacon technology is an effective way to bridge the gap between brick-and-mortar retailers and customers glued to their phones. It’s a new way to engage with consumers and provide incentives for shoppers to enter your store, stay for a while, and hopefully make purchases.
Let’s look at a few examples of how you can use beacon technology to increase retail sales:
- Offer discounts and deals. Set up discount alerts to fire after a potential customer has been in your store for 20 minutes. You might catch them before they decide to leave.
- Show product availability. Notify in-store customers if a product they’ve added to their online cart is available to buy in-person.
- Explain product location. If you have a larger store, you can help shoppers find what they’re looking for by connecting their shopping list to a map of your store.
- Boost customer loyalty. Encourage people who enter your retail store to check in on social media to earn loyalty points.
- Improve store layout. With information about how customers move through your store, you can make visual merchandising and store layout improvements.
- Increase foot traffic. Combine Bluetooth beacons with geofencing to attract more people to your retail store. Geofencing is for larger distances and complements proximity beacon marketing. Use geofencing to first attract nearby app users to your retail store, then engage with them once they’re inside, using beacons.
How to start using beacons in retail
Now that you’ve learned what beacon technology in retail is and how to apply it to your business, you’re ready to get started.
The first thing you’ll need is a set of beacons and a beacon plan. There are numerous beacon manufacturers and platforms to choose from, including:
After setting up your in-store beacon technology, inform customers by encouraging them to download your store’s mobile app for special deals and discounts. Accomplish this with signage around your store, emails to your subscribers, and/or social media campaigns to explain the benefits to current and potential customers.
Then, use the list of examples above to start brainstorming ideas for beacon campaigns. You can test a few to see what works and what doesn’t, and then iterate.
As your customers get accustomed to receiving beacon-triggered notifications and exploring the store with the aid of beacons, you’ll want to periodically change up your campaigns to keep content fresh and encourage return customers.
Moving forward with beacons in retail
Beacon technology has the potential to revolutionize customer communications for brick-and-mortar retailers. Shoppers can enjoy more engaging, seamless, and personalized experiences, and you can gain customer insights, ultimately making it easier to achieve a number of business goals using a single piece of retail technology.
Additional research and content from Alexis Damen.
Get started with Shopify POS
Only Shopify gives you all the tools you need to manage your business, market to customers, and sell everywhere in one place. Unify in-store and online sales today.
Beacons in retail FAQ
What is beacon technology in retail?
Beacon technology in retail is a type of Bluetooth low energy (BLE) technology that lets retailers send location-based notifications to customers’ smartphones when they are in close proximity to a store. It can be used to deliver promotional offers, discounts, and other types of messages to potential customers. It also can track customer behavior and preferences in order to better serve them.
What industries use beacon technology?
- Health care
- Travel and tourism
- Cafes and restaurants
- Digital advertising
What are Bluetooth beacons used for?
Bluetooth beacons are used to detect the presence of a user’s device and trigger a specific action in response. Examples of uses include triggering mobile push notifications, providing directions to a specific location, and tracking customer behavior and preferences.