Are Beacons a Mobile Marketing Trend or a Dying Retail Technology?

December 19, 2016 Krystal Overmyer

Beacons: Mobile Marketing Trend or a Dying Retail Technology?

Marketers may have jumped the gun on beacons’ mobile marketing potential.

According to Walker Sands’ Future of Retail Report, only 6 percent of consumers have used a retail beacon this year. That’s despite investment from some heavy retail hitters, including Macy’s, Target, and Lord & Taylor.

Beacons were once heralded as a marketing game changer. The idea behind them is pretty nifty: Go into a store and linger at a specific geographic point—let’s say, the shoe section of a department store—and through Bluetooth technology, a beacon placed there could beam you a coupon or other information about the product.

The problem is that most people apparently have never interacted with a beacon—myself included. If beacons are out there at stadiums, department stores or airports, I haven’t been aware of them. According to research, I’m not the only one missing the beacon impact. Even as smartphone usage climbs upward, beacons are staying under the radar.

As we look ahead to 2017, it’s time to rethink beacons.

Are Beacons a Mobile Marketing Trend or a Dying Retail Technology?

The Beacon Premise

Mobile marketers are already using location-based targeting, so what makes beacon marketing technology different?

Beacons, along with the broader category of “proximity sensors,” are unique because they can communicate with users in a very specific geographic area. If you want to target users within a very specific area—such as a few meters around the endcap of an store aisle—a beacon can accomplish that.

Retail is an obvious place for beacons to thrive, but it’s not the only application. Sports stadiums, concert venues, and airports can use beacons to personalize the user experience. Large conferences can use beacons to engage with attendees. Public transit systems can theoretically use beacons to offer loyalty programs or better analyze commuter traffic patterns.

Despite the potential, beacons have their drawbacks. For one, they must be installed and maintained, which can be tricky if the “fleet” of beacons is significant. More critically, beacons only work when the user has a supported app installed on their mobile device. Google’s Eddystone beacons can deliver notification via Chrome, but the user still must have Chrome installed for it to work.

Essentially, a download is almost always involved before a user can engage with a beacon. That can be a tall ask, given that users are showing signs of app fatigue and downloading fewer new apps.

Theoretical vs. Actual Use

Even if users have the right app installed and nearby beacons are working perfectly, the users still have to need or want whatever content the beacons can deliver.

In the retail setting, this might be trickier than you’d think. People often use their smartphones while shopping. That said, are shoppers going to check their smartphones at each new point in a store to see if any new beacon notifications have cropped up?

Probably not, Euclid Analytic’s CEO Brent Franson argues. “The use case is far too advanced for consumers right now,” hetold MarTech Today

In other words, beacons provide a high-tech solution to a problem that shoppers don’t currently have.

Still, users are open to the idea of beacons. The Walker Sands’ report found that 70 percent of consumers say they’re open to the idea of beacons if retailers could offer the right mix of content, like discounts, loyalty rewards or quicker checkouts.

Interest in beacons mobile marketing technology

On the other hand, concerns about privacy, message overload, and security may be hampering beacon adoption. Almost half of respondents find the idea of beacons “creepy.”

Success Stories

Outside the retail sector, beacons seem to faring better.

In the Netherlands, public transit operator Syntus used beacons to offer local discounts and points to travelers during off-peak times, reducing congestion and pressure. Other use cases could include real-time travel updates or contextual advertising, Marketing Land reported.

Stadiums are another example where beacon marketing technology could shine. Unacast’s Proxbook Report says that 93 percent of Major League Baseball stadiums use them currently, as noted in Marketing Land. Users with the app can opt in to be tracked by beacons at ballparks. When fans pass a beacon, they can receive coupons, team info or video highlights, the American Marketing Association reports.

Beacons are also proving their value at events and conferences. SXSW 2015 deployed over 1,000 beacons in and around hundreds of venues to help attendees stay connected and offer event info, Skift reports. The system worked because attendees would have downloaded the SXSW official app—making it seamless for them to receive the beacon notifications.

In 2016, SXSW improved its app and beacon functionality by offering users personalized content and recommendations. As users moved around the city, beacons sent push notifications about events the app determined might be interesting to the attendee. Recommendations were based on user-supplied profile data. The beacons helped attendees cull down the most relevant sessions from over a thousand options.

Looking Ahead

Beacons aren’t dead yet, despite some claims to the contrary. However, obstacles to their usage suggest that adoption will be slow. Like QR codes, beacons require downloading an app before they can work—and QR codes aren’t exactly hot mobile marketing property anymore. Still, in certain scenarios, beacon marketing technology can be useful for both users and brands. Unfortunately, the application may never be widespread.

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