Beacon engagement rates on the up.

Nick CockburnManaging Director

In recent months we have seen an increase in clients asking us about Beacon Technology and how they can harness these for brand awareness, loyalty etc.

The Beacon marketplace is expected to increase massively, according to BI Intelligence from $4.1 billion this year to $44.4 billion by 2016.

Retail has led the way with beacon technology to better target consumers. Using small beacon devices, no bigger than your hand, you can send offers straight to a consumer’s smartphone or tablet based on where they are located in the shop.

Beacons use Bluetooth’s low energy signal as it’s more effective than GPS or Wi-Fi for detecting phones indoors, and can also be used outdoors as well.

However this does mean that the consumer needs to have their Bluetooth turned on and in most cases an app is required on the device to serve up deals and messages. Ever noticed how your Bluetooth is switched on after updating the software on your iPad/iPhone? (…just saying!).

Unfortunately Bluetooth and Location Services are still major drainers of device batteries so expect major improvements in this area from device manufacturers very soon to remove this barrier.

In July this year, Google announced an open-source beacon protocol nick-named “Eddystone”, while Apple introduced ” iBeacon” tech just two years ago.

So what are brands doing with Beacons so far?

In the US, Major League Baseball (MLB) were an early adopter. On the opening day of the 2014 season MLB had Beacons in 28 out of 30 stadiums. Fans could connect using the MLB app to get offers and seat upgrades. Walmart partnered with GE to install special light bulbs in their stores containing Beacons. These track the customer as they move around the store and send them targeted discounts whilst they shop.

Early adopter brands have reported 60% engagement rates and 30% purchase rates from Beacons.
Marketers anticipate that using targeted offers from Beacons will reduce the problem of consumers coming into a store to look at a product before going home and buying it cheaper online.

By the end of 2018 there will be over 4.5 million beacons in use throughout the USA according to a BI Intelligence report… 3.5 million of these predicted to be in retail outlets. It’s fair to say that Beacons are definitely here to stay!


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