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Tips for using beacon technology in retail

Beacons can potentially enhance the in-store customer experience, but there's no one-size-fits-all blueprint that retailers and brands can follow.

With the emergence of beacon technology, many retailers and brands are testing the waters to see if proximity-based services can improve customer experience and boost sales. So far, deployments have been small and there's no blueprint for how beacons will provide value.

Beacons, most commonly Apple's iBeacon protocol, are Bluetooth wireless transmitters that detect mobile devices in their vicinities. Companies can use this geolocation information to send various offers or alerts to customers. Knowing where customers are located within their stores tells companies which products a customer might want, and gives them a way to develop customer relationships.

But with few test cases, organizations are treading lightly with beacons. "Every retailer has to be experimenting with it and has to be thinking about what's right for their audience," said Barry Lowenthal, president of The Media Kitchen, at the Internet of Things: Beacons conference in New York on Nov. 3. "I don't think there's a formula yet. It's going to depend on … so many variables and we have to test our way through it."

Experts discussed best practices for beacons at the conference and pondered the future of the technology, including a potential showdown between retailers and brands over owning the beacon experience. Here are some main topics discussed:

Mastering the mobile environment. The advent of new technology doesn't mean companies need to rethink what they already know about their customers, said Rachel Pasqua, senior partner at MEC Global.

Companies need to ensure that content is possible to access on various devices. Customers give up personal data in exchange for something of value, but this perception of value varies from customer to customer. Tracking customers' visits at stores and where they go once in a brick-and-mortar location should dictate the types of content they should receive, she said. Consumers "are beginning to expect the most rewarding experiences to come from unexpected places," Pasqua said.

Jordan Gray, manager of creative labs at Organic Inc., said there is a protocol to location-based content marketing. Companies shouldn't send content until a customer is in a checkout line, which is less intrusive than when he is walking down an aisle, for example. Companies should develop consumer profiles and only then send appropriate content to push to the customer. Developing profiles over time also enables companies to develop the relationship with customers, thus minimizing customer irritation with content marketing.

The best experience will be something that brings the interactions with the transactions together.
Douglas Rozenchief innovation officer at Meredith Xcelerated Marketing

Think beyond the coupon. Research from Infosys indicates that customers will give retailers personal information in exchange for offers and discounts, but experts said that approach is just too easy. Coupons are part of the strategy, but companies need to focus on providing high-quality in-store experiences and make customers feel valued.

"You don't necessarily need to respond right in the moment in order to make the most" out of beacon data, said JiYoung Kim, senior vice president of strategy and new solutions at Ansible Mobile. Instead, she said there is potential to use data from beacons to reprioritize content on a company website or on its mobile app, for example, depending on where the customer traveled within the store.

Kim noted that Macy's allows a user to save a shopping list within its app and guides customers through the store to find items. Beacons can enable a service for customers that has value and isn’t intrusive.

"The best experience will be something that brings the interactions with the transactions together," said Douglas Rozen, chief innovation officer at Meredith Xcelerated Marketing. "If it's just interaction, it has low business value. If it's just transactions, you're missing a key attribute toward marketing, which is the fact that these are personal devices that we carry 24/7."

Who owns the beacon experience: retailers or brands? There's great debate over whether retailers, who own the physical locations, or product brands that reside within those spaces should "own" and govern beacon customer experiences.

Companies are struggling with the disruptive nature of beacons, said Jesse Wolfersberger, director of consumer insights at Group M Next. "We're on the knife-edge … with a really good chance to get people to abandon it," he said. "Once you remove an app, it's not coming back." There is the potential for it to go awry in a store depending on who owns the experience.

Shoppers want a single app to address the entire shopping experience, which means brands are at a disadvantage when it comes to beacon technology, said Matt Alcone, chairman and CEO of Alcone Marketing Group. Retailers already have access to their own CRM data and analytics as well as giving customers the ability to pay on mobile apps. They hold the power in communicating with shoppers, he said.

Consumers don't want multiple apps on their devices since not every app offers a consistent reason to have it there, MEC Global's Pasqua said. So there should be flexibility between retailers and brands, said Michael Berelian, director of e-commerce and digital shopper at Geometry Global, to make beacons relevant to shoppers by joining proximity information with buying history and other behavioral information.

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Is your company considering – or already implemented – a beacon deployment? If you have, how is it going? What are your KPIs?