The Rise of Beacon Technology in Retail

By: Maria Lerario, Marketing Communications Coordinator

With the growth of shopping apps and beacon technology, retail and in-store marketing are becoming more common among retailers with brick-and mortar-locations. Retailers have seen the value of reaching shoppers at key moments when they are in-store making purchase decisions.

Mobile phone usage in stores wasn’t always as necessary as it seems to be today, but now 90% of retail shoppers use their smartphones in stores.

One of the main factors driving in-store marketing is beacon technology, as the Global Beacon Technology Market is estimated to surpass $25 million by 2024. While the increased use of smartphones in stores is a main driver of Beacon Technology, the growth can also be attributed to the development of smart cities since mobile beacon technology offers value in connecting urban infrastructures.

What is Beacon Technology?

Beacons are small, battery-operated wireless devices that transmit Bluetooth signals to nearby smartphones. They are one of the latest innovations in proximity marketing. In retail, beacons can reach customers who have Bluetooth enabled and the right retail apps downloaded onto their phones. The shoppers are then served in-app ads for relevant products, and sometimes coupons or rewards to incentivize them to buy a certain product.

Proximity marketing beacons are even able to get as granular as knowing where in stores shoppers are, so they can be targeted while they are in the same aisle as a certain product, all via the beacon communicating with the customer’s mobile device.

Why Beacon Marketing is Successful with the Rise of Bluetooth Mobile Devices

Beacon technology’s success is due to the increase use of smartphones in stores. According to Deloitte Consulting, digital interactions now influence 56 cents of every dollar spent at brick and mortar stores. Some of the common in-store smartphone activities include looking up product information (58%) and checking or comparing prices (54%).  This is imperative to advertisers because it gives them the opportunity to reach shoppers while they are in the right mindset and considering making a purchase.

The Future of Proximity Beacon Technology

Joyce Reitman, CEO of Motionloft, a sensor company that retailers utilize to increase sales and trigger proximity targeting, projects that, “the future of retail will embrace neural networks and machine learning devices to get more connected. Analysts will use customer footfall traffic and behavior data to create experiential shopping destinations.”

This means that moving forward, advertisers are starting to look at the path customers take through their stores so they can optimize store organization and with that, optimize advertising as shoppers are going through brick-and-mortar locations. They will also start looking at dwell time so they can target shoppers based on where they are in the store and for how long.

As long as consumers are still shopping in-stores, retailers will continue to optimize their advertising to best reach shoppers when they are in the right mindset and most likely to convert.

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