Mobile Payments Tracker: Beacon 3.0

It was but a short time ago beacons were the next big thing. Unlocking the power of mobile location technology, beacons in their most ecstatic billing were hailed as the future of digital retail and possibly the saving lifeline that was going to keep the foot traffic coming. Consumers could use their phones to check in at their favorite retailers, get special offers and perhaps even pay without ever standing in a line.

That was the early hype anyway, but for all the enthusiasm beacons drummed up, they never quite lived up to that early forecast’s potential. Which, noted Swirl CEO Hilmi Ozguc, really represents more a problem with expectations for beacons rather than a problem with the tech itself.

“This has gone through a typical tech introduction curve with a lot of heightened expectations,” Ozguc said. “And then you start actually using the technology and really figuring things out on the other side, and that is where it gets really interesting.”

Swirl’s line of work is helping retailers leverage beacons (and like location technology) as part of an integrated digital marketing campaign. Integration that Ozguc said is critical because beacons on their own aren’t a solution — they are clever technological means to pinpoint a consumer location that offers an opportunity to leverage that data for more effective relationship.

“It is a fierce fight for retailers to pull the consumer into their store, especially in an environment like a mall,” said Ozguc. “The average mall visit is 45 minutes long and involves three planned store visits, so the time is precious.”

And, he noted, when used correctly, the holiday data shows beacons help retailers make that time count.

How?

The Changing Face Of Beacons

Despite the fact that the hype has died down some, beacons are actually better positioned than ever to be part of the retail landscape, according to Ozguc,- for a very simple reason. They are much easier now for retailers to implement. During the early days, he explained, beacon technology was an expensive add-on that came part in parcel with a complex integration. Now, beacon technology is embedded inside of lights and point-of-sale systems — in other words, a standard add-on in retail systems. That means for retailers to use a beacon is often no more than hitting a switch.

The other big change, he noted, is that there are more many more customers easily accessed via this method.

“Google has gotten into the game and enabled it at the upper level by making it so you don’t need the retailer’s app anymore,” he said. “This means retailers can message people through Android’s nearby notification service. That represents 100 million U.S. consumers, which absolutely amplifies the signal.”

Those two shifts mean it is easier for retailers to both use beacons — and see the point of wanting to. It’s a start, Ozguc noted, but the most important lesson learned in beacons is that simply hitting people with messages isn’t a sufficient mechanism for developing conversions. As it turns out, there is a maximum number of times a retailer can reach out and touch a customer present in store — and that number is pretty low, two to three times maximum. Past that, he noted, it becomes annoying.

With so few up at bat, retailers have to use those messages well, he noted.

Personalization Is Key

Different retailers have different methods for leveraging beacons — and Ozguc noted that Swirl is more interested in providing them with the canvas for their efforts than constructing them.

This means different merchants use their services — and the beacons tech — for different things. Some use it in a loyalty context, as part of their ongoing conversation and communications with their most frequent customers. Others use it as a tool to distribute offers and grab foot traffic that is already present in the mall opportunistically. Some use the service to as a means of upselling — this, Ozguc noted, is particularly prevalent with their drugstore and pharmacy customers, while others use beacons to push recommendations.

The point, he explained, isn’t for customers to find a perfect killer use case for beacons — but instead to use the beacons as a means to an end toward improving their customer relationships.

“Using location technology gives the retailer the ability to see where someone is, how long they’ve been there and even if they have they been there before. If you can do that effectively, then you can put interesting and relevant contextual content in front of them that will compel them to buy something or at least look at something.”

And when used right as part of a robust mobile marketing effort, beacons can drive some real results. Ozguc noted that one of their specialty apparel clients saw basket size increases in the range of 41 percent during the holiday season — just by using beacons to prime the right customer response at the right time.

Zeroing In On The Personal

One of the common mistakes in the early days of marketing through beacons was an overly great fondness for one-size-fits-all offers — the discount for any customer who walked into the store. Great, if one happened to want the offer, but not so great for the customer for whom the offer is totally irrelevant to why they are in the store.

Ozguc noted that with its platform, they can help stores do a lot better — such as push a more generic offer to a new customer while sending a recognized buyer a suggestion or an offer more in line with their tastes.

The key, he noted, is using the beacon technology to show off all the other things the merchant knows — and combining it all into a better retail experience.

“It’s not just about getting them into the store — it is about engaging them when they are there,” Ozguc noted.

And as foot traffic continues to fall and physical retailers continue to see thing margins stretch ever farther, getting that engagement down is getting more important than ever.

Beacons, as it turns out, probably won’t be their life raft. But if properly used, they might just be a very useful oar.