This June, the headlines exploded with story after story about Facebook offering free beacons to retailers. Finally, the potential to bring e-commerce-level shopper engagement to brick-and-mortar stores through beacons became more plausible. Since Facebook has a massive, always-on user base, this opens doors for widespread beacon use, overcoming the major hurdle of beacons relying on rarely downloaded retailer apps.
Beacons are devices that send out Bluetooth low energy (BLE) broadcast messages that can be placed around a store or venue to mark a location. An application installed on a smartphone can pick up these digital markers. Often paired with a back-end server, it can convert the digits to something meaningful like a coupon. With help from beacons, a mobile app (such as Facebook’s, the social networking giant hopes) can engage the end user to bridge the digital and physical buying process.
Although beacon technology is inexpensive and widely available today, hardware-related limitations, message frequency and a lack of tangible results pose other challenges for retailers looking to beacons for proximity marketing.
First, consumers must download the relevant retailer, brand or team app so that beacons can communicate with the device. This also means the retailer needs to develop the mobile app. Gartner Analyst Mike McGuire describes his own (lack of a) beacon experience at Apple and Macy’s stores in a recent blog post: “It was my bad. I needed to get a separate third-party app, shopkick, to actually use the beacons. Macy’s own iOS app doesn’t recognize beacons. Or if it does, they’ve managed to keep that hidden.”
Determining the right frequency and content for messages is also a tap dance. Beacon platform InMarket found that one in-store, beacon-triggered message resulted in a 45 percent interaction rate, but if a shopper was sent an additional message (total of two messages) via beacon, it resulted in a 313 percent drop in app usage, showing a large percentage actually deleted the app.
Thankfully, beacons aren't the only way to learn about and engage shoppers while they're in-store. Booming mobile device use has also opened doors for unprecedented consumer and marketing benefits to be derived from Wi-Fi. There are two main consumer use cases for Wi-Fi-based location analytics:
- location analytics, which use advanced data mining configured for a specific business, estimates the number of shoppers, how much time they spend in a location, and the frequency of their visits; and
- advanced analytics, which provide knowledge of a shopper's movement patterns while they're in-store to understand the preferred and more appealing locations.
Getting Engaged! 5 Reasons to Marry Beacons With Wi-Fi
Beacons and Wi-Fi are complementary in delivering value for operations, marketing and sales. When combining beacons and Wi-Fi technology — then adding location analytics — a retailer can use a single infrastructure to enable both analytics and relevant personalized messages. For this reason, major access point manufacturers are teaming with location analytics companies to offer hybrid Wi-Fi/BLE solutions that address beacon shortcomings and boost conversion.
There are five reasons this hybrid model will be a key trend in 2016 and beyond:
1. Agnostic to devices: Without an open standard, there's potential for a land grab where beacons work only with certain operating systems, such as Apple or Android. Wi-Fi technology is readily available in most parts of the world and can already be used with most Wi-Fi hardware to detect all Wi-Fi-enabled devices, including smartphones, tablets and wearables.
2. Battery battles: Beacons are simple devices with a short battery life needing replacement at some point each year. Finding where beacons are installed and changing potentially 1,000-plus batteries is an overwhelming exercise. There are no batteries with Wi-Fi.
3. App and internet reliance: Unless consumers have downloaded an app and allowed notifications, marketers using beacons face headaches in running effective location-based campaigns. While Wi-Fi doesn’t require visitors to open an app or have Bluetooth running, it does require an internet connection to transfer data. And to message someone, the consumer needs to have logged onto the guest Wi-Fi or given permission in another way.
4. Troubleshooting and security: Much like finding the pesky dead bulb lost in a string of holiday lights, what happens when one among hundreds of beacons dies, falls off a wall (like at the Brooklyn Museum), or gets moved or stolen, compromising the engagement experience? In addition, beacons still need Wi-Fi or LTE in place in order to connect to the “mothership.”
5. Sporadic signals: Picking up a signal from a beacon can be unreliable; walls, doors and other physical objects will shorten signal range. Apple suggests the signals are also affected by water, which means the human body itself could affect signals.The vast majority of consumers leave their device Wi-Fi turned on, making connectivity more consistent.
If a retailer simply wants to offer employee connectivity or guest connectivity, Wi-Fi is sufficient. If it wants to benefit from location analytics, it makes sense to explore Wi-Fi-based location analytics. And if looking to engage visitors based on where they are in-store or to provide an indoor navigation experience, retailers might want to look into marrying beacon and Wi-Fi technology (along with apps) to enable two-way communication.
Nader Fathi is the CEO of Kiana Analytics, a location-based marketing company that provides presence analytics and influence analysis for retailers.
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