How beacon technology can improve customer experience at the point of sale

fathom hub


There has been a lot of news around beacons and how they will revolutionize the retail space. Visions of Minority Report style targeted advertising are both enticing and frightening to consider. As is so often the case, reality is far less exciting than fiction, yet I’m excited about the possibilities for creating more intelligent proximity networks.

If Bluetooth beacons are unfamiliar, don’t worry: they are a relatively new technology. Here’s a brief overview of how they work. BLE beacons (short for Bluetooth Low Energy), Bluetooth® Smart beacons or simply “beacons” are small electronic devices that periodically broadcast a radio signal using Bluetooth Low Energy. Smartphones are able to interact with a beacon using a retailer’s app or the phone’s notifications feature.

If you make handsfree calls in your car then you’re using Bluetooth. If you’re using an app to navigate indoors then you may also be using Bluetooth, with your phone using the beacons like ships use lighthouses.

Digital pioneers in the retail sector immediately saw the potential of beacons to add context to their mobile apps, providing customers with in-store navigation reference points and highly geo-targeted offers based on where the customer is at a given time. Inevitably there were some bumps along the way that caused frustration for both customer and retailer.

    “Without a beacon network a mobile app is simply just a mobile website.”

The first challenge was getting customers comfortable with the idea that turning on Bluetooth on their mobile device wasn’t going to kill their phone’s battery. This was a problem with earlier generations of Bluetooth technology, but with the launch of Bluetooth® Smart it is no longer an issue. Stats vary significantly on the percentage of users with active Bluetooth connections but a recent study suggests that nearly 50 per cent of North American users leave Bluetooth turned on all the time.

Another major challenge is related to reigning in the temptation for retailers to bombard customers with location-specific ads. Keeping in mind the old adage ‘just because you can doesn’t mean you should’ is good advice to any retailer contemplating a massive ad push based on a customer’s proximity to a beacon.

If you think that beacons are a passing fad, think again. Beacon technology is set to transform the customer experience at the point-of-sale as adoption rates are set to grow exponentially. ABI Research predicts that the BLE beacon market will double this year, and break 400 million shipments by 2021.

The billion-dollar question is why do beacons matter? They matter because beacons enable retailers to leverage contextual and proximity awareness, which in turn empowers a retailer to delight and surprise its customers by creating new ways to effectively engage with an increasingly distracted consumer.

The following scenarios are designed to help you imagine how you can better serve your customers using this relatively inexpensive technology.

A tailored experience

Many retailers have developed apps for smartphones. However, awareness and adoption of these apps is on average quite poor. There are many reasons for this, but predominantly, a customer is only going to download an app if they believe it provides them with utility.

A report recently commissioned by Forrester showed 60 percent of people had two or fewer retail apps; and only three percent had more than ten retail apps. While 85 percent of time on smartphones is spent in apps, of that time, only five percent is spent in retail apps.

A strategically deployed beacon network working in concert with a well-designed mobile app can create a unique customer experience that is only available in the bricks and mortar environment. Savvy customers will soon figure out that a store that has invested in its app and in-store experience is a retailer that is focused on customer service.

Beacons can help customers find what they are looking for faster, find associates for one-on-one help and they can even streamline the checkout process. But without a beacon network a mobile app is simply just a mobile website.

As customers travel around a store the app can share relevant content about departments, feature sections and offers specific to showroom displays. Target is one retailer that is using Bluetooth beacons to do this well. Target focuses on offering valuable content; for example, providing push notifications with recommendations for potential baby products from BabyCenter – a popular online resource for parents – when customers are in the baby section. Target is considerate about the frequency of push notifications, sending only two notifications for every shopping visit.

While Bluetooth beacon technology is only being tested in 50 of its 1792 stores, Target already has 25 million customers using its app weekly.  Target introduced beacons in 2015, and app adoption grew by 86 percent during the year.

Macy’s is another U.S. retailer that ran a successful campaign to get consumers to download its app using beacon technology. Its 2015 Black Friday ‘Walk in and Win’ campaign began in the run-up to Black Friday by encouraging shoppers to download the app. On Black Friday customers were then alerted to the digital scratch card concept via the app, and the chance to win prizes. It was beacon technology that enabled these push-notifications to be sent to the app while the customer walked throughout the store, driving app usage during this critical shopping period.

Rewarding customer loyalty

Another scenario to consider is how this technology can be used to better reward customers for their loyalty.

Once a retailer’s app is downloaded, it will automatically receive push notifications in any of the retail chain’s locations so long as beacons have been installed in the store and the customer’s phone is turned on.

This again allows for tailored promotions. A tech retailer may see that a device has visited the TV section of multiple stores over the course of a month, and send a tailored push notification highlighting TV promotions via the app to the potential customer. By recognizing the frequency of visits, retailers can reward customers for their loyalty via the mobile app by sending extra loyalty points or other ‘thank you’ promotions.

For large, multi-location retailers, beacon technology also has the added benefit of providing insight into how customers shop across the brand – such as which stores are visited the most and the duration of the store visit.

Customer engagement

All of these possibilities are of course dependent on getting customers to use your app in the first place. And, as I noted earlier, it can be challenging to get your app on your customer’s smartphone, so how can beacons help with that?

Our company has developed an innovative solution that we believe holds great potential to increase mobile app penetration and usage rates. Imagine being able to electronically interact with your customers, encouraging them to download your app the moment they walk in your store.

We do this by deploying our Fathom™ Hub in the store and connecting it to a digital sign. The Hub can detect the presence of Bluetooth enabled devices. We don’t know who is there but we do know that someone is present and because of that information we can update a digital screen with a call to action to download the store’s app, giving retailers a contextual trigger that operates independently of an app.

The same technology can be used to help customers avoid long lineups at checkout. For customers in a hurry, there is nothing more frustrating that getting caught in a long line-up at the till.

Retailers have been using various methods to monitor foot traffic around the store for a long time. Fathom Hub technology distributed throughout a retail environment can detect the presence of Bluetooth devices (independent of an app) and if there are large numbers showing up in one area, digital signage could be updated to encourage customers to visit another checkout location. It’s also another tool to empower store managers with data on where foot traffic falls around a store. Patterns that develop over time can assist management to schedule more associates or even redesign the store layout.

Final word

As the usage of beacons increases in retail stores so too does proof of its ability to transform the point of sale experience. Which example do you see as having the greatest impact for retailers and their customers?

Guylain Roy MacHabee

Guylain Roy-MacHabée is President and CEO of Rx Networks Inc., a mobile positioning technology company. Fathom™, a business unit of Rx Networks, is redefining the beacon and IoT space. The Fathom™ suite of products is a hardware and software system designed to address challenges of managing large-scale beacon deployments. Retailers have shown a keen interest in this emerging technology.


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