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Ever wondered what it be would like that you are walking past one of your favourite bookstores (with no intention of dropping by) and suddenly you get a notification on your smartphone about the arrival of the new novel (in that bookstore) that you’ve been waiting for weeks. And there’s more. You happily walk into the bookstore, pick the book and just walk out of there without even using cash or cards for payment. Welcome to the world of retail beacon technology.

Beacons in Retail

Traditionally, beacons were used to signal the presence or arrival of something. In retail beacon technology, they are used to signal the presence or arrival of potential customers in close vicinity. Once the retailer has this information, he/she can use it to communicate with the prospective customers (who are within the range of the beacon) via other communication mediums like text messages or notifications.

Science behind beacon technology

Beacons are economical and energy efficient transmitters. The maximum range of standard retail beacons are approximately 70 metres. Beacon technology runs on the low power consuming Bluetooth Light Energy (BLE) and the smartphone has to be Bluetooth enabled. The beacon seamlessly relays signals which are picked up by the supported phones in the range of the beacon. After receiving the signal, the phone retrieves the identity of the beacon broadcaster and activates the concerned app (retailer’s app here). The retailer’s app must be installed in the customer’s smartphone. The app requires access to user location and also Bluetooth connectivity needs to be turned on.

The beacon edge

– Increased footfalls and cross selling Retailer’s beacons and notifications will remind customers that they are in a close proximity of the store and such reminders have higher chances of being converted into a footfall than no reminders at all. Customers inside the store could also be apprised of other complementary products which could be of interest to them.

– Go cashless and cardless too One of the most important advantages of using beacon technology in retail is hassle free payment processing for both the customers and the retailers. This has been made possible with beacon enabled proximity payment solutions. After completing the purchase scanning at the checkout counter, the customer has to wave his smartphone over the retailer’s payment device. The bill is generated and displayed on customer’s smartphone. Then the customer has to authorise payment for the purchase bill via his payment app. This payment processing system may vary from retailer to retailer.

– Customer Engagement and Personalisation Use of beacons in retail management has enhanced the scope of customer engagement. Retailers using retail beacon technology can communicate with their potential buyers (who are within the range of the beacon) about personalised promotional offers, discounts, sale, new stock arrivals, memberships etc. This helps a brand strengthen the bonding with its customers and develop brand loyality. The use of retail beacon technology in competitive localities could provide a strategic edge to the retailers.

– Retail analytics The data collected by the retail beacons could provide valuable inputs for Retail Analytics. Such data can further be refined using various Retail Analytics tools to provide meaningful insights on consumer behaviour.

Users of beacon technology

The potential benefits of retail beacon technology are not restricted to any particular industry or geography. The performance of the beacons are not affected by any time or place factor. The beacons will work with as much efficacy at 7 P.M as at 11 A.M or with as much accuracy in the US as in India. Some of the users of retail beacon technology are departmental stores, shopping malls, travel and tourism agencies, restaurants, bookstores, airports etc.

Issues to address

But just like at the advent of any other technological revolution, retail beacon technology too has been criticised on privacy concerns and security of prevailing online payment mechanisms. Customers may not prefer to be tracked every time they step out of their homes or are in the vicinity of the market area or inside the store. Keeping the location services and bluetooth connectivity turned on all the time also drains away the battery of a smartphone. While the world is turning towards digital payment systems, online security threats like hacking and DDOS attacks continue to obstruct the perception of customers who are otherwise willing to shift from cash based purchasing to digital shopping at the retail level.

Retail beacon technology could be the next big revolution in the world of retail marketing because of its cutting edge technology paired with its energy efficient and low cost hardware requirements. The retail giants realise that there’s a huge potential market segment of the millennials who are highly tech savvy and energy conscious and will willing embrace retail beacon technology to make their lives simpler.


To know more about “How Retail Analytics can help you know your customers better?” get in touch with YRC Business Experts on [email protected]

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Author Bio

Rupal Agarwal

Chief Strategy Officer

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