Opinion

Are beacons yesterday's retail technology?

"To beacon or not to beacon?" is a question on the lips of many retailers and brand owners, says Simon Hathaway, president and global head of retail experience at Cheil, but other technology may prevail.

How does beacon technology measure up to alternatives?
How does beacon technology measure up to alternatives?
It seemed we were on the cusp of something big, unless, as was the case with QR and Foursquare, technology superseded instore beacons before they hit critical mass.

Talk of how beacons, small Bluetooth-enabled transmitters in stores, will revolutionise proximity-based targeting of promotions has been in the air for at least two years now.

We’ve even seen some action. Tesco began a beacon trial in April 2014 at its Chelmsford store, integrating the trial with its MyStore app. A month later, Waitrose started a similar test at its concept store in Swindon. When Asda and John Lewis launched tentative trials towards the end of 2014, it seemed we were on the cusp of something big. Unless, of course, as was the case with QR and Foursquare, technology superseded instore beacons before they hit critical mass.

Bluetooth LE and LED Lighting

Now that just might be happening. In France, supermarket giant Carrefour has invested in an alternative approach. While beacons use Bluetooth LE (low energy) to determine the distance of a shopper (but not their precise location), Philips has developed an LED lighting system that transmits promotional codes to smartphones via light waves.

The Carrefour trial in a Lille store uses this Philips system and functions in a similar way to GPS-based maps. Each LED transmits a distinct location code, which can be picked up by a shopper with a compatible app using their smartphone camera. From this, special offers and location data are sent to the shopper, enabling them to search and locate their preferred promotions or discover promotions and products around them.

Beacons are relatively low cost and, therefore, could provide a good option for trial for smaller stores or those just testing the water

Precision delivery of promise

It’s a technology that Cheil Worldwide has experience of using, building a similar LED system to support emart’s Sales Navigation work in Korea. The goal was to provide promotions and product location detail direct to smart phones and the technology enabled precision delivery of this promise.

The advantages, however, are offset by the relative high cost of the LED approach. The Carrefour/Philips approach involves replacing a store’s entire lighting system with the LED alternative. Beacons are relatively low cost and, therefore, could provide a good option for trial for smaller stores or those just testing the water.

Nonetheless, the LED systems offer a viable alternative because they provide a one-off, long-term solution. Even should the current iteration of proximity-based targeting fail to take-off, at least stores that have fitted the LEDs will be left with an entirely serviceable lighting system rather than a bunch of obsolete beacons attached to shelving.

Technology for the sake of technology

However, don’t get blinded by the sake of technology for technology’s sake. The big questions brands should be asking don’t revolve around whether "to beacon or not to beacon". Or even "to beacon or to LED". What’s essential is to consider what you are doing with new technologies to solve customer problems and to enrich their overall experience.

It’s important for retailers and brands to ask whether this activity will enrich the shopper experience, deliver convenience and value

When deciding on whether to invest in new ways of delivering in-store promotions, I’ve learnt that it’s important for retailers and brands to ask whether this activity will enrich the shopper experience, deliver convenience and value.

Don’t forget that people are on a mission when they shop. The best marketers understand that mindset, alongside the retail context, and so remove barriers to purchase. Most retail environments are already jam-packed with price messaging, discounts, and promotion. The last thing that shoppers want is more clutter, they demand clarity and simplicity.

Contextually integrated

This technology has the ability to deliver all of that and more.  The opportunity to deliver personalized experience and dynamic value is there and with that shoppers will adopt this new technology because it will be contextually integrated into their buying habits enriching their retail experience, delivering convenience and value.

To make that happen I find myself asking  a new question… how many retailers does it take to change a light bulb?