Beacons expanding beyond big retailers, restaurants

Mobile phone apps send coupons and info to people in shops, hotels, at conferences, in arenas

By  |  Published: February 2, 2017

Elaine Pofeldt
Personal Finance Writer
"Your Business Credit" columnist, entrepreneurship expert and blogger

 

Beacons expand from big retailers to small businesses

 

Beacons expand from big retailers to small businesses

 

Beacons – those electronic Bluetooth devices that alert you to sales and specials inside chain restaurants and big retailers – are spillling out onto Main Street, and everywhere else that people shop. The technology that induces you to buy more is predicted to skyrocket in use, and is increasingly popping up in small businesses and even beaming coupons to people walking past shops, jumping on a bus or buying a beer at a sports arena.

“Beacons allow businesses to bring location-based content down to the microlevel – to any aisle, lobby or display,” says Megan Martin, account manager at mobile agency Iversoft Solutions. Beacons “ultimately drive more sales.” 

Today, the vast majority of beacons deployed in the U.S. are either in retail stores (which have 57 percent of the devices) or restaurants (another 20 percent), according to an SMB Retail study.

That's changing as the technology, which can send discount deals to shoppers or a welcome greeting to hotel guests, is starting to show up everywhere.

Here are seven places, from malls to hotels to airports to sports arenas, where you may find a beacon, and what it will be used for:

BEACON NUMBERS
 SET TO SURGE

6.9 million: Number of beacons worldwide in the third quarter of 2016, according to Proxbook. Total number of proximity sensors (which includes beacons) is up 42 percent from the previous quarter.

8 million: Number of beacons estimated to be in use at the end of 2016, according to ABI Research.

372 million: Annual shipments of Bluetooth low-energy beacons by 2020, according to ABI Research.

  • Parking: HotSpot, a Canadian company looking to expand to U.S. cities, uses beacons to let customers remotely validate parking or top off meters in four Atlantic Canada cities. It charges a business $7 a month (and $20 for a one-time beacon setup fee), which lets shoppers at HotSpot stores feed the meter from their phones so they won’t get a ticket. Shoppers who aren’t racing from a store to feed a meter may stick around and spend more. “Whenever a customer parks and walks into a business, that’s when we take over,” says HotSpot CEO Phillip Curley.
  • Hotels and conferences: Another increasingly popular use of beacons is to send a message to visitors when the receptionist is not at the front desk. “Meeting organizers and hotels are starting to use it,” says Martin. At the South by Southwest conference in Austin, Texas, beacons alert attendees to nearby sessions they might want to attend. If you are attending an event, a beacon might guide you to your seat. “The app knows what seat you are going to,” says Martin.
  • Airports: At airports, beacons help arriving passengers to find their way to the baggage claim. At San Diego International Airport, an app uses Apple beacons to show wait times for the ticketing lobby, security checkpoints and taxi lines, according to Proxbook’s third-quarter 2016 report. Just over a third of the top 20 U.S. airports are currently using beacons, Proxbook notes. 
  • Sports arenas: At the Cleveland Cavaliers’ arena, 60 beacons enable an app to send fans the night’s lineup, fun facts such as celebrities in attendance and the proximity of Moondog, the team’s mascot, according to Proxbook’s second quarter 2016 report. In Orlando, Florida, beacons let Magic fans know there is no wait time at a concession stand. According to Proxbook, 93 percent of MLB stadiums, 75 percent of NFL stadiums and 53 percent of NBA arenas have installed beacons.
  • In-store customer assistance: “We can have beacons in the fitting room tell us how many Shopkick users are in an apparel store and want to be fitted,” says Bill Demas, CEO of Shopkick. The Shopkick app gives shoppers “kicks,” or rewards points, if they do something the merchant wants them to do, such as entering a fitting room, a step that signals they are more likely to buy.
  • Customer surveys: RaterBee, a New York City startup, plans to use beacons for instant in-store surveys. The aim is to provide real-time feedback on managers and store associates. “The goal is to create a tighter bond between brands and their customers,” says Stuart Silverman, RaterBee CEO. RaterBee testing will start the first full week of February.
  • Increased sales: Target started testing beacons at 50 of its stores in August 2015. With the Target iPhone app, customers opt in to share their location while in the store, so the retailer can send push notifications or Cartwheel mobile coupons to shoppers’ phones. Indianapolis-based Marsh Supermarkets, the first grocery store to scan a barcode for a sale in 1974, has beacons at all of its stores to reach shoppers on their smartphones and Apple watches. In Orlando, that beacon-powered Magic app is credited with a $1 million increase in ticket sales.

Little cost, big potential
Beacons typically cost as little as $25-$30 each, says Chris Stabile, vice president of business development at Digital Social Retail, which created a platform to manage campaigns for Apple’s iBeacon, the best-known beacon. Apple’s iBeacon launched in December 2013. Monthly rates to use the Digital Social Retail platform range from $79-$100, Stabile says. 

Google’s Eddystone beacon platform, which debuted in July 2015, is catching up to Apple’s iBeacon, with more than half of the proximity industry using Eddystone in the third quarter of 2016, according to Proxbook. Eddystone allows for proximity-based messages that aren’t app-based, Silverman says. Smartphone users get an alert on their phone when they are in range of a Bluetooth low energy beacon.

With the Google Eddystone platform, “so much more is possible,” Silverman says. For example, mobile wallets, which are commonly associated with payments, are being used now with beacons to let customers know their order is ready for pickup or to alert shoppers of nearby specials in a store. 

Increased sales ‘showed me the value’
Julie Serritella, who runs a Mad Science learning franchise in Hoboken, New Jersey, is a fan of the Shop and Ride beacon program, which she is trying for free. 

Hoboken partnered with Conduent and AR James, a local transit advertising agency, to bring the Shop and Ride app to the city. With Shop and Ride, people who buy their mass transit tickets on their iPhones opt into a program that uses beacons in bus shelters and stores to send info on deals and coupons along their routes. 

It’s letting people know we’re here. I wound up making a $1,300 sale because of the beacon.

-- Julie Serritella
Who runs a Mad Science learning franchise
in Hoboken, New Jersey

Decked out in her purple Mad Science polo shirt, Serritella displays a beacon she has tucked near the door of her franchise.

“It’s letting people know we’re here,” says Serritella.

Many working parents rely on Mad Science for camps during school break but wait until the last minute to book them, she says. The beacons remind them to register as they step off their trains.

Nothing beats money in the bank account to validate whether a new marketing technology really works.

Recently, a family that relocated from Australia booked camp sessions for two children after getting a beacon notification, she says.

“I wound up making a $1,300 sale because of the beacon,” Serritella says. “Two kids – multiple weeks of camp. That showed me the value.”

See related: Shopping beacons with targeted marketing messages expand, Retailer beacons track your phone as you shop, raising privacy issues


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Updated: 10-22-2017

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