Retailers Hear the Call of Beacons

By Lance Eliot

Retailers are continually faced with finding new ways to lure shoppers and keep them coming back to their stores. Beacons are emerging as a means to get that shopper loyalty and keep it.

About the size of a hockey puck or smaller, beacons are devices that are placed throughout a retail store and used to communicate with shoppers’ smartphones. This is accomplished via Bluetooth, a popular means of electronic communication.

If placed correctly in a store, beacons can detect a shopper when he/she enters the store, and is able to follow their path as they shop. Alerts or messages can be sent to the shopper when they're in a particular aisle and location of the store. The retailer will usually want to message the shopper when they first enter the store, then maybe again to communicate with them in a particular aisle, and possibly message them as they exit the store.

One question that some retailers have is whether they should invest in beacons or developing a mobile app. The best answer is that retailers would be wise to invest in both. Doing so provides a combination punch that helps each to be best deployed and ultimately pay off.

According to a national poll conducted by Interactions, approximately one in three shoppers have already signed up for their favorite retailer apps. Furthermore, and most importantly for beacons, over a third of all consumers surveyed (44 percent of men and 39 percent of women) feel that receiving mobile alerts from the store they're shopping in would improve their experience. Therefore, you can see why beacons and mobile apps are a powerful combination.

Let’s take a look at Target. It announced that it's moving forward on an extended pilot of beacons, which also works in combination with the retailer's already popular mobile app.

One clever aspect is that while the shopper walks randomly around a Target store, the retailer's mobile app is figuring out where they are. The app dynamically restructures the consumer's shopping list based on their location within the store, and can map and re-map the shopper to where they need to go to complete their shopping journey.

A potential downfall of beacons is that if they're used excessively by a store, shoppers might become annoyed and shut their smartphones off from receiving the messages. Knowing this possible outcome, Target has indicated that it will purposely limit its use of beacons to two alerts or messages per shopper, per store visit.

Retailers should be closely reviewing where they stand on the topic of beacons, and pushing forward toward adopting them. This must be done thoughtfully, since just wantonly scattering beacons around a store is wasteful, and using beacons without a sound strategy is counterproductive.

Lance Eliot is vice president of information technology at Interactions, a provider of innovative retail services and experiential marketing for retailers and brands.

1 Comment

View Comments

Lance Eliot Author's page

Dr. Lance B. Eliot, MBA, serves as Vice President of Information Technology at Interactions, a global leader in retail solutions and experiential marketing. Dr. Eliot has over 20 years of industry experience, especially in the retail and CPG marketplace, and has served as a Chief Information Officer (CIO), along with having founded, ran, and sold several high-tech related businesses.

Acknowledged as an outstanding innovator in the retail/CPG realm, Dr. Eliot was instrumental in Twentieth Century Fox Consumer Products receiving the prestigious Innovation in Information Technology award from UCLA for the proprietary state-of-the-art merchandising system that he designed and fielded with Fox, and that also earned Fox a vaunted Wal-Mart Supplier-of-the-Year award. These systems ultimately enabled Fox to boost merchandising revenues by 100 percent in only two years. He was also crucial in the design of the Taco Bell self-serve kiosks, one of the first to provide such a capability for fast-food stores and which led to technological breakthroughs that other kiosk systems subsequently now rely upon.

Known for his thought leadership in many leading areas of business technology, including mobile technology and also Business Intelligence (BI), he previously hosted the popular radio show Technotrends that was also available on American Airlines flights via their in-flight audio program.

Author of three books and over 200 articles, he has made appearances on CNN, and has been a frequent speaker at industry conferences. A former professor at the University of Southern California (USC) and the University of California Los Angeles (UCLA), he founded and led an innovative research lab on Artificial Intelligence in Business. He was elected to the Board of the Southern California of the Academy of the Sciences (SCAS), and has served on the International Board of the Society for Information Management (SIM), a prestigious association of over 3,000 CIO’s/CTO’s worldwide.

He has performed extensive community service, including serving as Senior Science Adviser to the Vice Chair of the Congressional Committee on Science and Technology. He has served on the Board of the Orange County Science and Engineering Fair (OCSEF), where he is also has been a Grand Sweepstakes judge, and likewise served as a judge for the Intel International SEF. He served as the Vice Chair of the Association for Computing Machinery (ACM) Orange County Chapter, a prestigious association of computer scientists. And, he has been an advisor to start-ups via the USC Stevens Center for Innovation and also the LaunchPad incubator and accelerator.

Dr. Eliot holds a PhD from USC, MBA, and Bachelor's in Computer Science, and earned the CDP, CCP, CSP, CDE, and CISA certifications. Born and raised in Southern California, and having traveled and lived internationally, he enjoys scuba diving, surfing, and sailing.