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The issues preventing widespread beacon deployment

Retail Customer Experience

Aug. 25, 2015 | by Will Hernandez

Amit Bhardwaj (far left), the senior director of customer loyalty for Marsh Supermarkets, discusses his company’s beacon deployment.

Beacon technology was back in the news earlier this month when Target announced a pilot in 50 stores across the U.S. that is intended to enhance the in-store experience and provide customers with deals and recommendations through its mobile app.

Target joins other large brands such as Macy’s and McDonald’s in deploying beacon technology. But in the two years since Apple first announced the capability in the iPhone, retailers are still figuring out how best to use it.

A panel last week at Networld Media Group’s CONNECT Mobile Innovation Summit in Chicago discussed beacon technology’s role with retailers today. It’s a complicated issue, to say the least.

The panelists pointed to several reasons why retailers have yet to embrace beacons, ranging from consumers’ hesitation to be pinged while shopping to organizations lacking the necessary personnel or foresight to implement and manage a successful program.

But first, a brief refresher on how beacons work. They are battery-powered devices that use Bluetooth low energy signals to connect with other devices.

When a Bluetooth-enabled device such as a smartphone comes within 100–130 feet of a beacon, the two devices can communicate.

Customers must have downloaded an app that is capable of communicating with beacon signals, and they must enable Bluetooth, location services and push notifications on their devices for data to transmit.

Once in proximity to a beacon that it is programmed to recognize, the app can trigger messages customized to the user’s attributes to delivery highly relevant one-on-one communication.

Some of the panelists believe that how organizations set standards and best practices to use beacon technology to communicate with customers is at the heart of the issue of retailer deployment.

“There are issues of deployment and management [for retailers],” David Van Epps, global chief product officer and executive vice president for local sale at Mood Media, told attendees. “I think those are two concepts people don’t fully embrace when they’re evaluating something like this. That’s a barrier to why some of these things haven’t panned out.”

Darrell Jursa, senior vice president and partner for integration at Omnicom Media Group, helps retailers deploy technologies such as beacons and advised audience members how they should approach such an endeavor.

“There are a lot of clients that we’re testing things with, but there are three buckets that we usually use whenever we’re talking about something like this: the people; the process; and the technology,” he said. “We find that it’s a little easier to take care of the people and the process first. We’re here talking about tech, and we’re talking about beacons.

“But that education process — the idea is to work with vendor partners and companies that know more than we do about some of this tech, so to get the people and process buckets situated before you go anywhere near the technology is sometimes very interesting because smaller business might not even know what they’re doing with areas like [localized] search or social media.”

Amit Bhardwaj, the senior director of customer loyalty for Marsh Supermarkets, told audience members his company didn’t think about beacons until they were trying to solve a loyalty problem.

“Once you understand the primary piece of how to connect, you start to understand how there are other things you can do with it,” Bhardwaj said. “It’s about helping customers enhance the shopping experience, helping them remember things they might have forgotten [on their shopping list].

While Marsh’s use of beacons is one that routinely comes to mind when discussing the technology, there are other uses for it.

AC Entertainment, which produces the Bonnaroo Music and Arts Festival in Knoxville, Tennessee, uses beacons as a wayfinding tool to enhance the concert experience.

“As people are coming from the airport, or coming down the highway, we’re able to send messages [intended] to help them stay informed,” Jeff Cuellar, vice president of strategic partnerships for AC Entertainment, told attendees. “For us, beacons are a way to share information and better enhance the experiences that are happening on our properties.”

Of course, consumers need to be open to such messaging and they’re the wild card when it comes to beacon deployment.

“Why would the consumer want to do this?,” Cuellar asked. “With the number of messages we’re already being bombarded with, how is this going to help me?”

Indeed, Cuellar spelled out some of the issues preventing consumers from opening themselves up to be pinged with coupons and notifications upon entering a storefront.

Consumers need to have the right smartphone, need to have the Bluetooth feature turned on, need to have the retailer’s app downloaded on their phone, and need to opt in to be notified.

Retailers need to make it worthwhile to consumers to do all these things.

“I think consumers are afraid of Big Brother right now,” Cuellar said. “They know a lot of their data is being collected. What’s this giving back to them? I think you need to understand that you’re not going to get 100 percent adoption.”

Cuellar told audience members how AC Entertainment had to cut back on the number of messages it sent during a festival because it detracted from the overall experience.

“We thought we were helping people,” he said.

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