E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Beacons, which communicate with consumers’ smartphones, are most often used to welcome shoppers to stores and offer them discounts. But there are many other ways retailers can use the technology.
Beacons are taking the retail industry by storm. These low-cost pieces of hardware, which utilize Bluetooth low-energy (BLE) technology to deliver messages or prompts directly to smartphones, have revolutionized the the way the online and offline world connect and interact with each other.
While beacon technology is best used for sending contextual content — be it in-store welcome greetings, sale alerts, special offers, discounts and product information, or other alerts, there are other compelling reasons why retailers should strongly look into adopting beacon technology in-store. Here are a few:
1. Empower sales associates
Retailers can incorporate device-to-device Bluetooth low-energy services, to allow their customers to reach out to sales associates for assistance from within an app. Smart stores could then use the customer’s location information to dispatch sales associates to the right department, based on the associate’s expertise. Further, you could also install beacons in-store to read loyalty card and relay information to associates on the floor.
These beacons could also be set up to read other customer information, such as the items in wishlist, preferences based on Pinterest pins, whether she usually buys items on sale, etc. Relaying such important information about your customer to the sales associates will help them get a better idea on how they should approach the customer. For example, if the customer is someone who usually tends to beeline to the sales rack, the sales associate could inform her of items that recently went on sale .
2. Automate dressing rooms
Forrester analyst, Sucharita Mulpuru recently said that stores of the future will be more about services and, to get it right, retailers need to create unique experiences that consumers can emotionally connect to. For example, retailers can employ beacon-integrated technology similar to the one at Hointer, a U.S retail store, to allow customers to walk up to an item displayed in the store and scan its QR code using their smartphones to add that item to their virtual shopping cart. They can then select a color and size right from the app, rather than rummaging through the rack hunting for their size.
Once they have made their choices, they will be directed to one of store’s spacious private stalls by just clicking on the button called ‘Dressing Room’ in the app. By then the robotics at the store will have the selected delivered to the dressing room via an automated chute system. Once inside the room, the shopper can use the app to select other sizes that will automatically pop out from the chute for her to try on. If she does not like an item, she can toss it down another chute, automatically removing the item from the her online shopping cart. She can then complete the transaction on the tablet without having to wait in a checkout line.
3. Optimize merchandise
Beacons provide retailers with endless opportunities to collect massive amounts of untapped data such as the number of beacon hits and customer dwell time at beacons within a specified time and date range, busiest hours throughout the day or week, number of people who walk by a location each day, etc., and accordingly make improvements to products and services. A retailer could also determine traffic patterns in a store using highly specific location information.
Further it also helps retailers to choose locations and optimize store layouts and product placement based on navigational patterns. A merchant could also collect information on the number of visits made by a customer before they make an in-store purchase, how often they use apps while in-store and track other behaviors, and use these data to come up with new store layouts and sales strategies.
Alex and Ani, a jewelry brand, recently deployed beacon technology in an effort to retain customers and subtly encourage them to make more purchases. It also helps them compare various product offerings by testing out different placements of items around the store. For example, if they notice that their customer base has shifted to mostly men ahead of Valentine’s Day, then realigning products in the store to conform to how men shop could result in better sales.
Retailers can tie back this data into their e-commerce system, to optimize their home page merchandising zones on desktop and mobile such that it matches the customer behavior from city to city.
4. Contextual relevancy
While the opportunities offered by beacons for engagement are limitless, it is crucial that retailers understand each step in the customer journey and provide contextually relevant functionality specific to that location. For example, Epicurious, Condé Nast's 19-year-old recipe warehouse, recently leveraged beacons in-store to push notifications on recipe suggestions to shoppers’ apps. When a consumer taps on the notification, she can view the recipe and add the ingredients to her shopping list, with the ingredients organized by grocery aisle.
A brand that partners with Epicurious can drive sales by serving an interstitial ad, such as a coupon for an ingredient connected to the recipe, before the consumer receives the recipe after having tapped on the notification. Epicurious is pushing its efforts towards a more personalized experience by serving recipe suggestions based on the types of recipes a user reviews most frequently.
5. Contactless payments
According to a recent “Consulting Digital Shopping Behavior” survey conducted by Cisco, 73% of shoppers said that long checkout lines are one of their biggest complaints about in-store shopping. Aiming to eliminate such long waiting lines, PayPal recently unveiled a Bluetooth Low Energy USB module, PayPal Beacon. It allows customers to purchase a product in-store using a mobile device, rather than going to a checkout counter and paying with cash or a credit card.
Lyst, an online fashion marketplace, recently entered into a partnership with PayPal to circumvent the traditional point-of-sale process as it expands its product line into brick-and-mortar stores. Once a user installs the PayPal app on his mobile device and sets up preferences for automatic check-out, he will receive a message notifying him that he has been ‘checked in’ as soon as he enters a preferred business.