retail beacons for marketing

Beacons Fail to Light Up Retail Marketing

See how beacon marketing programs have fared in the world of retail in 2016 and why widespread consumer adoption of beacon apps has yet to materialize.

A year ago, experts could not help but gush about the seemingly endless possibilities that retail beacon devices presented. Yet, for many reasons, that huge paradigm shift never happened. While nearly five million beacons are deployed globally, there is no widespread use or adoption of them. Some stores even scaled back their beacon deployments after testing them in pilot programs, finding a lukewarm reception among customers.

So what happened? Part of the problem is that consumer adoption can be an inherently slow process, but there are two main obstacles that stand in the way of high opt-in:

Customers See No Value

To retailers and marketers, beacons present many cutting-edge capabilities that can drill down consumer analytics data into highly specific categories. Rather than analyzing sales and basket sizes within a retail location as a whole, beacons can tell you even more specific information down to the aisle-and-rack level of specificity. For instance, a retailer could learn how many people walk past an aisle display compared to being drawn in by it.

In order to access these benefits, retailers need consumers to use specialized apps that recognize beacon signals. Unfortunately, consumers’ incentives for using these apps are far less compelling than the benefits retailers gain. Whereas a chain could learn store foot traffic patterns, customers could merely receive personalized coupons based on their buying history or proximity to certain items.

While 67% of consumers once claimed that they would be receptive to receiving such coupons through beacons, they already have many alternative sources that don’t require them to monitor their cell phones for push notifications. Personalized ecommerce home pages, email offers and in-store promotional displays can capture their attention more readily without interrupting the natural flow of discovery-based shopping.

Therefore, the incentive for consumers to trade off their personal data and allow in-store tracking must be bigger than the types of personalized offers they already receive.

Beacon Marketing Apps Are Outdated

Beyond the lack of interest in beacon-pushed coupons, consumers who actually want to interact with beacons face a problem of disconnection. In order to receive beacon messages, they must download an app designed to recognize the small code packets that in-store beacons broadcast. Therefore, if they travel to five different stores, they may have to open five different apps. This scenario seems unlikely considering the decline in new app usage overall. Yet, having many beacon networks connected to the same app can produce more enthusiastic opt-in.

Popular retailers feel this effect when using beacons at their locations along London’s posh Regent Street because a single app connects all of these shopping experiences.

Therefore, retailers may benefit more from working with a networked third-party technology vendor than trying to establish in-house beacon programs case by case. This vendor could provide services and also sell anonymized data based on overall findings. Beacons are also becoming embedded in other tech devices such as Wi-Fi routers and even lighting displays, furthering the reach of such networks.

Only time will tell if beacons are here to stay, but despite hiccups in consumer adoption, the real potential of proximity marketing means that beacon providers may have to change their approach before consumers feel compelled to opt in.

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