Bringing Home the Beacon
'Companies are getting beacons out there as fast as they can,' says president of Location Based Marketing Association. What can we learn from early beacon deployments?
Beacons have been in general use for about two years, with retailers using them in everything from vending machines to mannequins in an attempt to move customers along the sales-to-purchase path. The devices are a critical element of location-based marketing efforts, said Asif R. Khan, president of the Location Based Marketing Association, at the organization's recent annual meeting in Chicago.
"Location is all about the data," he said, using an example of an auto manufacturer being able to link together beacon information from dealerships with customer visits to its Facebook page to develop targeted outreaches to prospective customers who have visited both.
"Companies are getting beacons out there as fast as they can," he said.
But not all beacon deployments are the same, cautioned John Sharry, director of sales, enterprise retail for Swirl, a marketing technology company. Some beacons are older models with very short battery lives. Some retailers have deployed them only to have the batteries fail within a few weeks. Others have found that the beacon models they bought required hands-on updating of outdated software or firmware.
These are among the reasons that scale can become a challenge for beacon deployments, cautioned Khan. However, newer models offer six-year batteries and centralized updating to answer this challenge.
"You need to weigh the cost of the beacons (including maintenance) against the shopper dollars you need to bring in to cover the cost," Sharry said.
He advised using beacons in combination with other location-based information. "Beacons are only one part of the entire location marketing ecosystem. You have to set up partnerships to bring the [beacon-collected] data into the CRM system. You have to track the lift in uplift engagement, conversion rates, basket sizes and other information."
"You need to decide if it will add to the customer experience or produce friction," cautioned Sampo Parkkinen, director of product management ShopperTrak, a retail analytics provider. "If you are thinking about doing something with beacons, think about what you want to achieve -- what are the points where the technology adds to or detracts from the customer experience. Make sure that the customer information is shared with different departments in the company."
Beacon management tools, many of which are difficult to scale, are a barrier to productive use of beacon technology, warned Julia Farina, product marketing manager of Aruba Networks. Another challenge is ensuring that the IT or marketing organization champion the technology, while also freely sharing it with the "other side of the house."
Successful Beacon Deployments
At Aruba Networks, marketing took charge of beacon projects, including a 1,000-unit installation at Levi Stadium in Santa Clara, Calif., home of the NFL's San Francisco 49ers, Farina said. The beacons, combined with the Levi Stadium app, enable patrons to find seats and order concessions, which vendor staff delivers to the seats. In seven months, the app got 183,000 downloads, which led to a 30 percent adoption rate and a $1.25 million increase in concession revenue.
Dick's Sporting Goods saw "tremendous uplift" last spring in a test deployment at some locations in cities representing five of the last eight NHL Stanley Cup playoff teams, said Kevin Hunter, chief operating officer with beacon provider Gimbal. In partnership with the NHL, the beacons pushed different offers to people when they came within 200 feet of each of the retail stores.
Hunter didn't provide specifics as to what "tremendous uplift" meant in terms of sales or profits, but he said the success should trigger more expansive use of beacons. "The NHL had a basic understanding of the potential of the technology, and they drove it with Dick's," he said.
These types of beacon use cases were mentioned by Simon Hathaway, global head of retail experience at Cheil Worldwide, an international marketing company, in an interview with Enterprise Apps Today.
"Generally the best use of beacons is not to overtly communicate with customers, but to enhance their experience," Hathaway said.
Beacons at United Airlines
While much of the discussion of beacons focuses on their use in retail locations -- and understandably so -- other deployments show promise as well. United Airlines recently deployed 100 beacons in a proof-of-concept at Newark Liberty International Airport.
The beacons offer customers an airport map with directional capabilities to help find their gates and other important information. The airline is still building out other capabilities, said Jeff Ulrich, the airline’s senior manager, e-commerce/digital.
"The [ticket] scanners at the airport aren't network, so we might know that someone bought a ticket and checked in, but we don’t know when or if the customer went through security," Ulrich explained. He foresees a time when beacons will help inform gate attendants when customers are rushing between security and the gate so they don’t seal the jetway moments before the last passenger or two arrives.
Right now there are no immediate plans to coordinate the beacon data with marketing for coupons or other promotions, Ulrich said. "We're not looking at this as a single-use feature. We're looking to infuse location into the enterprise; that means different things to different people inside of the enterprise."
Phillip J. Britt's work has appeared on technology, financial services and business websites and publications including BAI, Telephony, Connected Planet, Independent Banker, insideARM.com, Bank Systems & Technology, Mobile Marketing & Technology, Loyalty 360, CRM Magazine, KM World and Information Today.