12 Crucial Questions Answered On Beacons’ Growing Influence On The Retail Industry

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App Development Unplugged - Beacons Growing Influence In the Retail Sector


Its power is such. Its penetration is such.   

Nope. Don’t go by its looks. Good things come in small packages, they say.  

Not surprisingly, retailers are getting drawn to it in colossal numbers.  In fact, according to Business Insider reports, 85% of the top retailers in the U.S. will be owning this revolutionary technology by the end of 2016.  And going by the  geniuses of this technology, I bet, several other businesses are already bracing up for it, in a big, bang way. No, seriously.  (More on this in the next Face2Face series… sit tight until then).

Agreed (how can I not?), businesses in the beginning were pretty cynical about it. But today things  are very different.  Businesses have been banking on this technology like never before, thanks to  its strong suits, which indeed  has earned it the sobriquet of “powerhouse technology of tomorrow.”  Don’t buy it?

But, you will have to believe this: As per the latest BI Intelligence reports, Beacons would be driving $44 billion in retail sales by 2016. An amazing uptick of $4 billion from the current year, even as Apple and IBM joined hands to embed analytics and iBeacons on an array of apps.

So, given that it’s one of the latest technologies that has made the app industry  sit up and notice, here’s OpenXcell’s first app development series between Beacons and the Retail Sector.

How the Retail Industry is leveraging the technology to a greater degree for greater gains.   

#1. First things first: So what are Beacons basically?

Technically speaking, it’s nothing but a small wireless device that’s designed to use Bluetooth Low Energy (it’s a power-friendly version of our good ole Bluetooth wireless technology) to  broadcast signals.


 Beacon Models –  Truly, good things come in small packages

But then, beacons don’t really do anything of their own accord except transmitting signals through unique identifiers such as UUID, major and minor.

The magic really happens when the applications running in your smartphone, tablet or smart pick up these signals and start delivering a contextual experience based on these identifiers.


#2. Is there a difference between Beacons and iBeacons?

Though Beacons and iBeacons are used interchangeably, the fact of the matter is, iBeacons is Apple’s technology standard around which Beacons are build.

 #3.Today Beacons are referred to as the ‘Beacon of Hope’ for the retail industry? Why so?

U.S. Retailers With Beacons

By 2016, 85% of the top 100 U.S. retail locations will have Beacons

Ah!  To very candid, beacon technology is moving out of the beta phase and becoming an integral part of the retail industry. In fact, a good number of retail giants are applying this technology in increasing numbers to engage with their customers through their downloaded apps.

Consider this:

  • Almost half out of the top 100 retailers in the U.S. have tested Beacons this year.
  • By 2016, 85% of the top 100 U.S. retail locations will have Beacons.
  • UK retailer House of Fraser, in fact, has set up Beacon-equipped mannequins. So when a  customer enters the store, the hi-tech mannequins’ become alive, sending signals to the customer with an assortment of information, including clothes and accessories which the receptive mannequin has donned. Not just that, it also give a roundabout view of the other items within the store and more than that links to purchase items directly from the retailer’s website.
  • Simon Property Group has installed a whopping 4,800 beacons across 192 malls and shopping centers nationwide
  • Macy rolled out no fewer than 4000 beacons last September
  • Hudson’s Bay Co. rolled out beacons to 50 Lord & Taylor stores in the United States and 90 Hudson’s Bay locations in Canada last November.
  • Target has decided to test the waters first with a modest 50-store-roll-out. Going forward, the brand might as well expand the technology more broadly.
  • Michael Kors plans to integrate beacons into its flagship London store next year.
  • ICA and Coop – two of the largest supermarket chains in Sweden –have reportedly been exploring beacons in order to make communications in the supermarkets more relevant.

So, as you have seen for yourself  that Beacon Technology is catching fire slowly but, yes, steadily.  And, not just the retail space, the technology is being adapted to other sectors as well, such as Hotels, Football Leagues, Airline industry, B2B arena and more.

#4. How does the Beacon technology work for the retailers?

How the Beacon Technology works in the retail sector

Source: http://www.itsoneiota.com

#5. Why is the Retail Sector so eager to jump onto the Beacon bandwagon?

There are several good reasons why the retail sector is so supercharged about Beacons. Here go a selected few.

Beacon Bandwagon

a]  For in-store communication with loyal customers

Turns out, it makes it easier for loyal customers to access information of the products they are looking for in terms of offers, discounts, etc.


A Beacon Transmitting A Special offer Push Notification To A Smartphone 

Additionally, it would help in speed shopping. Once you enter the store, within seconds, you’ll be sent a map of the store and the order in which you can pick up things, depending on the list you have entered into the mobile app, in the least time possible. It would tell which aisles are queued up and what products are close to selling out.

b] For out-store communication with loyal customers

Beacons help in location-based advertising.

Say, if you are passing by a retail store, whose’s app you have already downloaded, then such and such a retail store would be able to send beacon-powered promotional messages to you, enticing you to enter the store.   The messages would be in the form of push notifications.

For instance, House of Fraser’s not only helps customers who made it inside the shop with personalized messages, speedy checkout and all. The Fashion House is also good in attracting the  outside customers  to enter their brick-and-mortar shop through the use of this technology. For this, the retail giant has got a beacon positioned in a window display that keeps beaming promotional info to people as they pass by.

Long story short: Beacons help track potential customers beyond your store.

The technology could also be placed in street ads, bus stops, and many more places to direct customers towards a specific shop.

 c] For customer re-engagement and retention activities

Yes, you can bet on this technology to keep a record of all customer visits to the shop. But, that’s just one thing.  It also keeps a record of all the departments a customer might as well have visited while shopping, in addition, to the number of promotions/vouchers redeemed. This helps determine the conversion rate.

So the technology is pretty instrumental in helping the staff members recognize the most profitable customers, which in turn, could help the retailers devise ways and means to treat/tackle the high-end clientele.

What Consumers Demand From BeaconsSource: http://www.itsoneiota.com

d]  For ensuring staff efficiency

Yes, you’ve heard that right. Beacons  ensure staff efficiency as well.  For instance, it monitors how long and how often the staff members engage with the customers. The data gathered helps them set new standards with regard to customer service and even sales conversion takes.

Not just this, it also sends alerts to the staff for task checking.  Let’s say, if a department is heavily-trafficked and needs re-stocking,  the staff members are altered to chip in accordingly with re-stocking measures and more. Plus, they could be milked to determine the possible timings a staff should spend between the stock room and the shop floor.

 e] For obtaining data on full days and lean days

Such kind of data, for what’s worth, helps retailers manage their budget and staff more efficiently. By narrowing down the slow days in stores, retailers could rotate their staff and accordingly minimize their staff requirements during such days. And, vice-versa during full days.

#6. What is the main barrier to successful implementation of Beacon technology?

Impressing the customers to download the app. Yes, that’s the biggest bottleneck to get the customers download the retailers’ app or a third party app like Facebook app on their own.

Of course, there are beacon apps that might as well cover the entire street/mall, but some retailers have unique apps that might not in sync with the other high street apps.

So the point is, customers might download a selective few retailers’ apps but not your app.

 #7. How to overcome this barrier?

One way out is to educate customers about the immense benefits the technology offers and then even demonstrate it to them. Yes, the retailers have to take it upon themselves if they are are really beacon fans.

Another way out is to integrate beacon technology with popular third-party shopping apps such as PayPal or PriceChecker.  This would ensure that messages have been sent across to customers without having them download the app.  But then, this won’t help you build personalized relationships with your customers.

#8. Besides Apple, which other companies are into Beacon development?

Today, aside from Apple, there are several other companies that are Beacon manufacturers. And, for your information, Apple hasn’t actually built Beacons. It has just developed an iBeacon Standard around which Beacons can be build. Even Google has a Beacon standard called Eddystone.

Today, the beacon manufacturers’ list includes Kontakt, BlueSense, Gelo, Estimote, Roximity, Bleu Station, Sonic Notify, Radius Networks  and many more.

 #9. The Beacons sizes are shrinking these days. Why so?

Agreed, not long ago Beacons were in the shape of apples. Today, they are available in the form of stickers that could be easily stuck on walls and objects.  So, in a way, their shrunken sizes has only made their use easier.

 #10. How Bluetooth Low Energy (BLE) works in Beacon and how is different from RFID?

Talking about Bluetooth Low Energy….Beacons employs BLE wireless technology to track down customers in the stores and other places, which then helps deliver messages to their mobile devices. For this, a Beacon sends out a BLE signal that a third party or a retailer app picks up if it falls within the range.

Talking about how different is it from RFID technology? Beacons are pretty private considering that the user controls  the app that is connected to the Beacon.  Simply put: beacons have user permission, which could result in better user engagement and retention.

 #11. How is Bluetooth Low Energy different from a regular bluetooth?

There are three differentiating factors in between BLE and Regular Bluetooth.

First is Power Consumption: BLE operates on low energy and can work for 3 years straight on a single coin cell battery.  But then beware, battery life varies depending on the manufacturer.

Second is Lower Cost: BLE is nearly 80% cheaper than the conventional Bluetooth.

Third is Application: BLE  is perfect for simple applications given that small amount of data transferring is required.

On the other hand, Classic Bluetooth  is harnessed for complex applications wherein loads of  consistent communication goes needing more data throughput.

#12. Finally about the economics part… Are they cheap?

Yes, of course, beacons are cost-effective pieces of hardware – one of the chief reasons for its growing popularity. They cost anywhere from $10-30.

Over To You Now

Yes. Beacons don’t cost much.  And, more importantly, retail businesses are betting big on them.

So what’s stopping you from taking the leap?

Talk to OpenXcell’s app development experts for more info. We have a team of veteran app developers who’d love to pitch in for all your  app development needs that are pretty much beacon-friendly.

So ready. Go ahead and put in a word here and we will get back to you in no time.


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Jini Maxin


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