Beacons in retail:
top use cases, benefits, and limitations

Beacons in retail: top use cases, benefits, and limitations

May 4, 2023

How Bluetooth beacons work in retail stores

Beacons send Bluetooth low energy (BLE) signals to nearby smartphones. The customer needs to pre-install a store’s mobile app to pick up the signals and send location-specific information to the store’s server, such as products or the department the customer has just passed by. Pairing the information about the customer’s current location with the customer profile data, the app triggers specific actions, for example, sending highly personalized promotions, encouraging visitors to make a purchase.

Image title: How beacon technology works
Data source: — Beacons in Retail: How To Attract More Shoppers With Proximity Marketing, 2023

Retailers install beacons in strategic places
around their stores in a specific way for
them to function correctly and allow
location determination

Nearby mobile devices detect the nearest
beacon’s Bluetooth signal

The signal tells the device to open the
store app

The app shows alerts assigned to that

7 use cases of beacons in retail

Beacons provide businesses with unique ways to learn more about their customers and engage with them on different levels.

Customer data granularity

Beacons can gather data about store areas with the most and least foot traffic, levels of shopper engagement with various categories or products, and details about first-time and repeat customers. Processing this data with retail business intelligence, retailers can improve stall and merchandising layouts, decrease wait times at checkouts and other customer touchpoints, and enrich shopper profiles for better customer segmentation and retargeting campaigns.

Real-life examples of beacons in retail

Here’s how prominent retailers collaborated with software development companies to build beacon-powered solutions.

Amazon Go

    When Amazon decided to go offline, they opened cashier-less stores to abolish the concept of queues. In such stores, customers can take what they want and then just walk out of the store with their Amazon account billed after they leave. Among many other proximity technologies, in-store beacons are an essential component in the Amazon Go infrastructure.

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    8 benefits of beacons in retail

    Retail IoT solutions like beacons enhance in-store shopping experiences and allow retailers to establish a deeper connection with the customers, thus bringing multiple benefits.

    Accurate location data

    While cell towers, Wi-Fi, and GPS can accurately position devices up to 5 meters, beacons can detect users’ locations precisely, down to centimeters, thus increasing the relevance of your messages.

    Valuable customer insights

    Data collected from beacons helps improve product listings and in-store layouts, prevent queues, increase coupon usage, enhance customer care, and make the shopping trip convenient for customers.

    Greater personalization

    Smart beacons help brick-and-mortar retailers achieve personalization levels comparable with those in ecommerce. Retailers can send out timely offers, discounts, and shopping recommendations, tailored to customers’ demographics and shopping habits.

    Effective advertising tool

    Retailers can send ads based on the customer’s proximity to the store, reaching out at the right time and place. They can also use beacons for retargeting and offer products previously viewed by the shoppers.

    Increased use of mobile apps

    Beacons help turn a store’s mobile app into a valuable and engaging tool for shoppers, increasing app retention and customer engagement.

    Improved staff efficiency

    With the knowledge about the staff’s activities, store owners can optimize each employee’s workload in real-time, establish more customer-oriented service processes, and improve training, increasing overall staff productivity and customer satisfaction.

    Improved in-store navigation

    Sending navigation prompts or triggering the opening of an interactive map, beacons can steer users across aisles to products on their electronic shopping list or offer a personalized route based on their previous purchase history.

    Unified online and offline sales channels

    Beacons enable personalized experiences online through personalized notifications and loyalty benefits and offline through in-store promotions. At the same time, beacons provide insights into the correlation between advertising efforts and offline conversions.

    Limitations of beacon technology

    Beacons are simple devices, but there are still some challenges with this technology that companies should consider before incorporating it into their proximity marketing strategy.

    Signal absorption

    Depending on the proximity of other beacons or the nature of surrounding materials, beacon signals can be easily reflected or absorbed. As a result, some parts of your store can become blind spots, resulting in beacons pushing irrelevant notifications to users.

    Notification timing

    Due to fluctuations in Bluetooth signal strength as well as intermittent coverage of cell phone antennas and beacon signals, some notifications can come with a delay, which undermines their relevance and the overall concept of real-time experience.

    Moral considerations

    Popular apps like weather or news can contain beacon-tracking codes that retailers can use to track a wider audience than their store app users. In defense, companies say users can always opt out of location services. However, it’s not rare for companies to give customers incomplete and misleading explanations when asking for their informed consent.

    Customer opt-ins

    For beacon marketing to be effective, several conditions should be met. Consumers should download and install the store’s mobile app, have their smartphone with Bluetooth on when visiting the store, and agree to receive push notifications. Even if these conditions are met, users can still mute notifications or opt out of them anytime.

    Customer behavior

    When shopping, most customers don’t check their phones every minute, carrying them in their pockets or purses instead. So it can be difficult to engage passers-by with beacon-triggered alerts. In addition, shoppers can pass by a store or department too quickly for a notification to work in time.

    Data sharing concerns

    Users can start having concerns about their data security. Most people don’t mind exchanging their data for highly personal experience. However, in some cases, they can try to shield against constant tracking and protect their data.

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    Provide a better shopping experience with beacons

    With today's world shifting to mobile-first, beacons play a significant role as a customer experience technology for brick-and-mortar businesses. While people heavily rely on notifications from their devices, retailers can use beacons as a bridge between the offline and online realms.

    At Itransition, we help retailers set up beacon-powered proximity campaigns to achieve their specific marketing goals and smoothly adapt to the offline-to-online transition.