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Beacon technology provides better shopping experience

Beacon technology provides better shopping experience
The use of smartphones and tablets has made the combination of online and offline shopping a normal experience for many. Shoppers begin their purchasing journey with online research researching and comparing products. When in-store, patrons might use their phones to look for additional information or price comparison. According to Google, 85 percent of online shoppers start a purchase on one device and finish on another.

To gain an understanding of the customer’s purchasing journey in the offline store, retailers turn to installing beacons to track and understand customers’ buying patterns. Beacon technology allows for advanced personalization of the shopping experience, combining the online and offline worlds. This is an additional source of competitive advantage for retailers. Beacons are Bluetooth-enabled devices that serve as proximity sensors that communicate with the shopper’s phone. The technology was introduced in 2013, and although still in its infancy, it is exponentially growing. Retailers will invest US$2.5 billion in the IoT (Internet of Things) within five years — mostly in beacons and RFID tags. By the end of 2018 it is predicted that retailers will have 3.5 billion active beacons installed and it is estimated that beacons will drive $44 billion in retail sales by 2016, up from $4 billion in 2015.

Sid Mookerji, Global CEO at Software Paradigms International (SPI) pointed that it is not only retailers pushing for the installation of solutions that combine the online and offline. According to him, this move is also driven by the customers themselves:

“Millennials have lived in a connected world their entire lives and expect an omni-channel cross-platform seamless experience. Retailers need to break down the silos of separate platforms, competing departments and think about integrating their platforms to serve and attract their customers.”

The IoT is becoming fundamental to delivering an enhanced consumer experience and driving operational efficiency. “Retailers will increasingly deploy IoT sensors and devices in their stores to capture new levels of data and drive better insight. These could be video, RFID, Wi-Fi, Bluetooth beacons, temperature or motion sensors,” said Alison Wiltshire, Global Practice Lead, Retail and Consumer Goods in BT. “Linking the data stream from these IoT sensors with other data will drive both real-time insights (for customer experience) and trend analytics (for planning purposes). For instance, connected merchandise (‘things’) using RFID tags not only allow optimization of inventory and replenishment, but also allows the product to have a ‘voice’ and inform a content management system what linked content should be displayed on adjacent screens or devices. These could be used to inform the consumer and help them make a better decision. The challenge for retailers is how to deploy the breadth of IoT technologies without creating new silos of disconnected data and applications.”

How to use the data
In today’s retail landscape, collecting information is less of a problem, putting it to good use is the major challenge. However, companies understand the importance of data analytics and offer it in one way or another. “We all know that retailers collect a lot of data that includes: online store data, mobile and apps data, and in-store data. Add to that, enterprise integrations for loyalty, CRM, and ERP. Ideally such a huge repository of data should enable retailers to enhance customer experiences in a big way. But, that’s not the case. The problem here is that all these pieces of data are in different silos and not easy to tie together,” said Sharat Potharaju, CEO and Co-Founder of MobStac, a company offering a marketing and analytics software platform utilizing beacon technology.

Conventionally, in-store behavior is difficult and expensive to capture — it requires people to monitor the store and write down shoppers’ behavior. Conversely, online behavior is easy to capture but difficult to interpret. Mobile behavior is tricky to capture, and normally difficult to interpret. “Beacons make all the pieces fit together,” explained Potharaju. “The challenge lies in combining all these bits of data together and put it to use in order to make improvements to store layouts, products, and services in-store. Our solution comes with an analytics dashboard that is available via APIs that provide retailers the flexibility to integrate beacon analytics into the retailer’s enterprise platform.”

The availability of data from the sales floor, whether through RFID tags or beacons also allows retailers to import techniques from one domain to the other.

“Our solution connects the online with the offline world using remarketing and retargeting techniques,” said Harry Horn, Global Marketing VP at Scala. “These are common in the online domain, when a shopper looks for a certain product online, advertisers can use cookies technology to keep promoting the product in other websites. In the offline context, we use beacon technology that connects to the app of a certain retailer. We can detect when the person walks in the store and then trigger the appropriate data on various devices (cell phone, associate tablet, digital screen). This new information is based on previous customer data such as preferences, sales activity, style (e.g., do they prefer suits or casual wear), online search history, and other data points.”


Product Adopted:
Retail


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