Retail Beacons and mobile app development

A Beacon of Hope for Retail Customer Engagement

by Randall Spence
Retail beacons are bluetooth enabled devices that are able to interact with customers through their smartphones to create a contextually enhanced in-store shopping experience. Top retailers have used beacons for a wide variety of use cases including indoor navigation, proximity payments, pushing proximity based ads, and even gathering analytics about where customers are moving within their brick and mortar locations. Retailers can use Beacon Management platforms such as Cisco to monitor their deployments to ensure accurate customer analytics are being gathered. With proper customer analytics, the CRM process can become even more personalized to cater to individual needs the moment they enter the store. There is a lot of potential for mobile app development for retailers and beacons.

Beacons Improve the Shopping Experience

Beacons are being used to enhance the shopping experience and build customer loyalty. By creating a personalized in-store experience, retail stores can compete with larger chains such as Macy’s and Target that have already adopted beacons into their strategy. Beacons are an affordable option for building customer loyalty, by maximizing the opportunity to engage with them as they browse in and around the store. Mobile couponing app, RetailMeNot, has already influenced billions in sales by pushing offers to consumers at opportune moments. Engaging with customers at the right time and place, can increase brand loyalty and get users of your mobile app excited about each visit to the store.

iBeacon vs. Eddystone

iBeacon

This is the beacon protocol first introduced by Apple at WWDC in 2013. An iBeacon packet is denoted by three identifying values called the UUID, major, and minor. The combination of these three values can be used to identify any specific beacon on the planet. The number of possible UUIDs is 2128, and multiplied by 65,535 possible major values and 65,535 possible minor values means the probability that two beacons have all three matching identifiers is virtually zero. Therefore if an app knows what values to search for, it can be extremely confident that it has found the right beacon when it detects the signal. iBeacon has been the most widely adopted of the protocols, primarily because it is the only packet that can wake an iPhone app from the suspended state, thereby enabling the device to scan the surrounding environment all from inside your pocket. In the past, retailers have used this feature to push offers to customers that enter their brick and mortar locations via Apple’s push notification service. Pros:
  1. Easily interact with iOS applications
  2. Send Push Notifications to users on iOS
  3. Low Power Consumption
Cons:
  1. Privacy concerns
  2. More complicated Android implementation

Eddystone

Google first introduced the Eddystone beacon protocol back in the summer of 2015 as a competitor to iBeacon. This is part of their Physical Web initiative, which allows smartphone users to discover content and points of interest without even using an app. The Eddystone protocol is somewhat limited as it can only broadcast a URL. The other beacon protocols can mimic this behavior by either storing URLs on the cloud, or on the device and displaying the content when the user encounters that beacon. Top beacon manufacturer, Estimote, just released the newest version of their beacon which can advertise both iBeacon and Eddystone simultaneously. The Eddystone protocol has been called the modern version of the previously mentioned QR code. It takes away the pain point of requiring a separate app to see the relevant information, and users can opt in or out of discovering physical web beacons easily to suit their preference. Pros:
  1. Appear in the Google Chrome Physical Web browser
  2. Easily interact with Android Applications
  3. Low power consumption
  4. Interact with existing web infrastructure
Cons:
  1. Not backed by Apple

Beacon Manufacturers

Gimbal

Gimbal, originally a division of the wireless semiconductor company, Qualcomm, officially became its own company in 2014. Since then, they have become one of the leading beacon providers in the world, carving out a strong niche as the most secure beacons on the market.  Some beacon deployments have opted for Gimbal over iBeacon or Eddystone due to the increased layer of security the Gimbal protocol provides. A Gimbal advertising packet is encrypted, and can only be decoded by requesting information from the Gimbal web service. That means that even if your app discovers a Gimbal beacon nearby, without the proper permissions or a sharing key from the beacon owner, it will not be able to precisely identify which beacon it is detecting. Those looking to avoid beacon spoofing would be advised to go with Gimbal for their in-store deployments. An alternative to avoid spoofing is to shuffle your beacon major and minor values ever so often, but this can become tricky if you have more than a few beacons without a robust beacon management platform.

Swirl

Swirl Networks is a Boston based beacon marketing company. They have worked alongside top brands such as Lord & Taylor and Urban Outfitters to deliver customers contextually relevant in-store marketing campaigns. Swirl leverages their own private ad network to push advertisements to consumers with optimal timing before the point of purchase. The company has been backed by high profile investors like Twitter and Softbank Capital, and has most recently raised $18 Million in funding last year.

Estimote

Estimote is a polish beacon manufacturer currently headquartered in New York City. Estimote provides an SDK for interacting with their beacons and has positioned themselves are one of the most developer friendly beacon brands available. They have a companion mobile app for managing beacons, which allows beacon owners to changes a wide variety of settings on their beacons, as well as update the firmware running on the beacon. Estimote has most recently raised $10.7 Million in funding at the beginning of the year following a major partnership with Target, who is implementing a retail beacon strategy into their US locations.

New Opportunities For Mobile App Development

Shopping applications using beacons are a growing segment within the app store. Popular brands such as Macy’s, Target, the MLB, and Starbucks have already began using beacons with their mobile apps. Some common use cases that these apps accomplish are:

Provide Customers with Detailed Product Information

Think of this like QR Code meets the 21st century. QR codes are those little square barcodes that literally nobody used but were everywhere a few years ago, but are seen very rarely in contemporary ad campaigns. The main difficulty with QR codes was that they required users to download an app specifically designed to scan QR codes. The typical reward for scanning a QR code is a link to a promotional page for whatever item the QR code was pasted onto. After one scan, users got the idea, and the idea pretty much fell on its face right then. Beacons enhance this use case because instead of requiring an entirely different app, retailers can display the desired product information directly inside apps that a customer is already using without the need for users to perform a manual scan. This is an effortless, less invasive way of giving your users access to information, discounts, and an extra boost towards buying your product. Proximity ads and push messages, were both some of the first use cases for beacons, but are now slowly being phased out in favor or in-app promotions, which customers are more likely to engage with.

Gather Location Based Analytics

Before iBeacons, the whereabouts of customers outside of the retail setting, was anybodies guess. Now, an app with a large enough beacon network can get a detailed picture of exactly how its users spend their time both inside and outside the store. Even without a large network, strategically placed beacons within a brick and mortar location can provide great insights into how customers navigate your store, and how often they visit. This data can be leveraged to enhance the in-store experience, which can increase both customer retention and sales. Additionally, getting an accurate head count of customers at all hours of the day is much easier with an app handling the counting. This is vastly more accurate than the old school way of reviewing camera footage or, even worse, standing outside the storefront with a clipboard. Knowing the peak visitation hours for your establishment can make staffing decisions much simpler, and can also free up managers to deal with other more pressing issues. Analytics and user tracking has prompted some privacy concerns by users that are now worried their iPhone are monitoring their every move. This is not the case. Not only are all iPhone apps that use any location services (this includes beacons) required to alert the user with a detailed description regarding this usage. User also must opt in to allow location services after reading this message. Depending on how much your app relies on location services, this can seriously hinder your users in-app experience if they disallow this capability. Location services in general have a bad reputation for being battery intensive. The most common reason for users to disable location services in your app is if it’s consistently the reason that their phone battery is low throughout the day. Beacon powered location services are the most battery efficient to date, and have seen a much higher user opt in and retention rate than their other location services counter parts.

Send Customers Promotions & Discounts

Sending users of your app a push notification as they enter your store seems like a great idea. In fact, this was the first way that beacons were used within retail stores, and there is a reason many venues are moving away from this approach. Integrating beacon functionality into an app that already provides users with a great in-app and in-store experience is the way to go. Creating an app simply to push discounts when your user is near your store or a competitors is not. Studies have shown that the average user would delete a retail app after receiving just 2 push messages prompting them to make unwanted purchase. You should look to provide contextually relevant information to your users when they want it, without being too invasive or pushy.

How Ignite Can Help

Ignite Outsourcing is a leading provider of IT Consulting services, including mobile app development on iOS and Android platforms. If you are looking to implement a custom beacon solution for your brick and mortar store, please contact us today and let our highly skilled development team work with you to create the right solution to fit your and your customers needs.