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Retail Beacons for the Holidays | WMI

18 Nov 2014 Kim Haley

in Digital

in-store beacons

As an update to our previous holiday shopping trends blog post, we are diving deeper into the digital phenomenon. E-commerce will play an especially prominent role in marketing: an estimated 8.4% of U.S. retail sales will be digital during this holiday season compared with 6.5% when looking at 2014 in its entirety. That growing percentage of digital sales has made a number of technological advances possible, including one hot topic this season: retail beacons. In-store beacons have so far created a lot of buzz in retail, but most tests have been small-scale. This season’s holiday shopping trends could change that. Advertisers are testing out retail beacons; more than half of the top 100 retailers are actively working with in-store beacons, and while many are in different stages, they are all evaluating and piloting this tactic’s effectiveness on consumers - we’re following closely to see how retail beacon technology may help brands stand out at point of sale.

What are in-store beacons?

In-store beacons are devices that communicate with a shopper’s smartphone in the hopes of improving the in-store shopping experience. Retail beacons use Bluetooth technology to detect nearby smartphones and send them media such as ads, coupons or supplementary product information. They can also be used as point-of-sale systems and to collect information on those consumers — particularly how consumers maneuver through stores. In-store beacons allow for mobile content delivery on a precise scale, and consumers are open to these mobile ads so long as they are relevant to time, place and activity.

Interested in driving retail sales?

Retail beacons are a fairly new method of using geo-targeting to reach consumers; read more about how your brand can put geo-targeting into place effectively right now.

What’s the catch to this holiday shopping trend?

In addition to the overhead costs of installing and maintaining in-store beacons, one of the major hindrances so far has been the limited audience penetration of branded retailer apps. Retail beacons only work through apps or Apple’s Passbook, so if only a portion of a retailer’s customers have downloaded its branded app, the beacon experience will have a very limited effect. In order to resolve this dilemma, retailers and beacon vendors have started to partner with sites that have a broader slice of their customer base.

What’s in it for the retailers and advertisers?

Retail beacons allow retailers the ability to message consumers while they’re in-store, and maybe even more importantly, collect consumer data, which can help them better segment their audiences and advertise accordingly. Holiday shopping trends show that pushing ads and coupons to consumers while they’re shopping may sway them to purchase or even visit a showroom, and develop an affinity for researching products in-store. A bonus? Retail beacons allow advertisers to feature products that they don’t have physical shelving room for, increasing what can be sold in the standard planogram of any given retail store.

Lord & Taylor announced its plan to install beacons in all its U.S. and Canadian stores by December 1st. Other early adopting retailers include Apple, Hudson’s Bay, Macy’s, Hillshire, Marriott, Regent Street, Alex and Ani, House of Fraser and Hawes & Curtis.

Sources: eMarketer, DigiDay