What is beacon marketing? How does it work?

Picture this, you’re walking in your favorite department store looking for that great deal. As you work your way to speak to one of the sales associates, your cellphone vibrates and a distinguishable ring sounds off.

You immediately unlock your phone to see that you’ve received a notification from the brand you were looking for offering you a 20% discount on your next purchase. Your face lights up with excitement with that little voice in your heading saying, “how did they know I wanted that?”

Has this ever happened to you before?

With more and more users shifting their searches to mobile devices, retailers and marketers need to recognize the importance and growth of mobile technology. In addition to apps and emails, the modern consumer is well aware of all the ways they can score deals, buy products or more importantly, learn about the product.

So how can brands not only reach and retain customers but provide excitement as well?

What is beacon marketing?

Well for starters, a small, battery powered beacon is installed throughout a location that emits a Bluetooth signal known as BLE. Once the beacons are set-up, mobile devices will pick up the BLE signal when in proximity to them and a push notification will be sent directly to the device with a distinct message.

The design is simple yet effective.

Beacon Marketing offers companies unique and interesting ways to engage with customers. It’s interesting to note that beacon technology can offer unique and interesting ways to engage with customers. In a short time span:

• 50% of the top 100 brands already use beacons in their stores
• It’s been predicted that that number will increase to 60 million physical beacons by 2019.

Consumers then receive a customized user experience including discounts, suggestions, and more. In order to excite and attract customers, brands are willing to try new marketing techniques.

The interactivity between retailers and consumers offered by beacons came at the perfect time. Statistics show that consumers are more than willing to use mobile devices as a means to integrate their shopping experiences. Either by sharing their experiences or getting perks, consumers want to use their mobile devices at the store.

Retailers should understand that the success of beacon marketing depends on the additional value offered to consumers.

For instance, recent predictions for technology trends have stated that bigger companies want to engage with customers more often by abandoning old formulas of selling products one time and shifting their efforts to create a more cyclical, recurring purchase. Beacon marketing promotes interaction and engagement with consumers, especially when the beacons provide valuable information such as coupons or perks.

The more a brand interacts with consumers, the higher the chance for consumer engagement as long as it can provide value to them. So when you relate it to beacon marketing, that engagement from a brand not only multiples, it can offer a whole new experience to the consumer and add another channel to interact with.

Brands can offer deals, tailor their suggestions and offer incentives to purchase merchandise for in-store consumers thus making the shopping experience interactive.

What are the disadvantages of Beacon Marketing?

Beacon marketing communicates through the BLE signal. Meaning consumers must have enabled their Bluetooth. Some numbers suggest more than 33% of mobile device users have Bluetooth enabled, but when you consider what demographic has it enabled and why it’s being used, it can cause a hurdle to reach a specific target audience.

Beacons also rely on apps installed in devices. For most retailers and brands, people are required to download their app in order for the beacon signal to communicate with a device.

However, some companies are already trying to work around these hurdles by using strategic partnerships and investments. For example, Twitter recently invested a cool $18 million into the beacon marketing start-up, Swirl. So how exactly does Swirl benefit from the social media app? The answer is simple; it’s about user friendliness.

Twitter is a popular app that nearly everyone has on their phone or tablet. With over 250 million active users each month, it’s an engagement gold mine for brands and marketers. Not to mention, Twitter operates with or without a WiFi signal.

While the details haven’t been finalized yet, Swirl and Twitter could be a match made in heaven. Brands and stores can rely on Twitter and its huge user base to provide beacons to them.

Image this scenario. You’re at your favorite shop, ready to buy something nice for yourself. You don’t have Bluetooth turned on because you’re saving your battery and you much rather download all the Candy Crush sagas as opposed to your favorite store’s app, which turns out is about 30 MB on your phone. Ouch, that’s a lot!

You see the item you want to buy only to find out it’s out of your price range. A bit disappointed you put it back and continue your shopping until you hit a beacon hotspot that automatically sends you a tweet from a brand you follow. You read the tweet and feel special! It reads “All items are now 20% when you shop at your local department store”. A big smile and a warm feeling rush through you and you happily walk back to your dream purchase and buy it, feeling great you’ve saved money and knowing that your favorite brand takes the time to notify you about deals and has your back.

The merge with Twitter can provide an excellent source for beacon marketing because it’s so simple to use. You create an account and follow your brand. That’s it. No extra downloading or sign ups. It effectively puts beacon marketing’s weaknesses away at no expense to the user.

Of course, beacon marketing is still in its early stages and there is a lot of room to develop. But learning about the consumer and how mobile technology is advancing could offer key insights in the evolution of beacon marketing as a new, interactive channel to engage with.

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