7 Innovative Ways Retailers Are Using Beacon Technology

Imagine this -- you walk into a store and peruse the shoe display, and suddenly your phone pings. The same red heels you've been eying online are now on sale, 20% off, just for you.

Shortly after, you need help finding the Nike backpack you saw online. Rather than searching throughout the store for a sales clerk, you log into your app and ask the app to send you someone.

None of this is as sci-fi or futuristic as it sounds. In fact, the technology is already here. Macy’s, Urban Outfitters, CVS, Lord & Taylor, Target, Timberland, and many other major retailers already use beacon technology to take their shopping experiences to the next level.

With the help of beacon technology, retailers are better able to meet customer needs and create a more cohesive online-to-in-store experience.

If you doubt beacon technology's power, you shouldn't -- Swirl Networks Inc. found over 70% of shoppers say beacon-triggered content and offers increased their likelihood to purchase in-store.

Here, we're going to explore seven innovative ways retailers are using beacon technology, so you can decide the best strategy for your brand.

What is beacon technology?

Beacon technology, first introduced by Apple in 2013, are small Bluetooth devices that can send alerts to smartphones based on location proximity. The one caveat -- the store's app must be open on a customer's smartphone to receive the store's beacon alerts. Beacon technology can be used to send discounts, promotions, upcoming events, or other reminders to customers when they're in-store.

1. Track customers in-store movement.

Beacon technology is an incredibly effective way to create a cohesive online and in-store experience. By tracking a customer's in-store movement, you're able to deliver targeted information and discounts depending on which products she's perusing. This can lead to higher conversion rates -- for instance, a customer is more likely to use a discount for purses when she's in the bag section than when she's checking out the workout apparel.

Macy's has been using beacons nationwide since 2014. When a customer opens the Macy's app in-store, the app recognizes which area of the store the customer is in. If the customer is in the makeup area, the app will remind the customer of makeup brands she already liked online. This targeted information can help persuade the customer to make a purchase.

2. Help customers find their way around the store.

Oftentimes, large department stores can be overwhelming. After a while of aimless searching, you might hear a customer say, "I can't find what I'm looking for. Forget it, let's just leave." Fortunately, beacon technology can help combat this problem by offering an indoor mapping experience that makes it easier for customers to find items on their shopping list.

For instance, Target uses beacon technology to create a "GPS for your shopping cart". Essentially, in-store customers are able to use Target's app to create shopping lists, and then see where items are located in-store as well as their own proximity to those products. As they move, their location changes in real-time, showing them whether they're getting farther or closer to their desired item.

3. Send sports fans targeted discounts on food and jerseys.

Picture this -- you're sitting in your seat at a baseball game, and a hot dog vendor walks by. As he does, your phone pings and tells you 30% off hot dogs. You're so excited about the deal, you order one.

Later, your phone pings again to tell you the jerseys in the merchandise shop are half-off. You weren't planning on getting one, but 50% off is too good to pass up, so you run to the shop to grab one in your size.

Brick-and-mortar stores aren't the only businesses that can benefit from beacon technology. MLB currently uses beacon technology at various stadiums to alert baseball fans of discounts on stadium food and apparel, and even team information and video highlights. Ultimately, beacon technology is capable of incentivizing customers to make purchases or visit shops they otherwise would've passed by.

4. Alert in-store customers of discounts and coupons.

61% of U.S. shoppers who have never tried in-store tracking before say that receiving discounts and coupons from a retailer would drive them to opt in -- so if you want to implement beacon technology for the first time in your store, you might consider sending discounts and coupons to start.

Walgreens, for instance, sends mobile coupons and promotions at its Duane Reade locations. Additionally, they use beacons to alert passerby's of offers to draw people into their stores.

If you imagine beacon technology as the modern day advertisement, it makes sense to enable your beacon technology to reach people outside of your store, rather than just in-store.

5. Attract customers to in-store events.

During the holiday season, retailers need to work harder than ever to stand out from competitors. Typically, retail locations might plan in-store events like free makeup tutorials, or a free gift-wrapping presentation.

Neiman Marcus is one example of a retailer using beacon technology to alert shoppers of their in-store events. 

Ginger Reeder, VP of Corporate Communications at Neiman Marcus Group, said, "Rather than having to go to your home computer to see what events are happening in-store, this is a way to notify the customer of the event while they are shopping."

Customers are more likely to stop at your store's event if they're already nearby, so consider implementing beacon technology to alert nearby shoppers.

6. Improve in-store conversion rates.

Finnish chain K-supermarket installed beacons across 55 locations to allow shoppers to create digital shopping lists, view recipes, and receive smart advertisements and promotions. K-supermarket found 25% of their shoppers who viewed a targeted message purchased the advertised product.

Sending smart advertisements to customers in-store is an innovative way to improve conversion rates. Plus, the data you can collect using beacon technology is invaluable when targeting your ads. For instance, perhaps your customer puts "cereal" on her digital shopping list. When she's in the aisle, your app might notify her, "Do you also need milk?" This type of targeted messaging is helpful and will likely lead to higher conversion rates than typical in-store ads.

7. Use beacons as a loyalty program.

A survey from Retail Dive found that roughly two-thirds of shoppers under age 35 research products on their smartphones while in a store. If your brand primarily targets a younger demographic, it's a missed opportunity to avoid implementing beacon technology.

Your beacon technology can do more than deliver promotions and discounts. Urban Outfitters, for instance, uses their technology to create a mobile-first loyalty program.

When a shopper enters an Urban Outfitters, they're encouraged to unlock an offer by checking-in on social media. In the dressing rooms, shoppers are shown user-generated content about products. Shoppers are also encouraged to take selfies with a #UOonYou hashtag, with the potential to be featured on Urban's site.

By using beacon technology in combination with social media, Urban is able to engage with customers online, even when they're in-store. Ultimately, their strategy enables Urban to use real customers as authentic brand ambassadors, while making a customer's shopping experience a better one -- a win, win.