Beacons Will Help Retail Chains Combat The E-Commerce Threat

BII cross channel retail

Even though physical store locations still account for most retail sales in the U.S., the online channel is driving the majority of growth, and influencing sales across channels.

E-commerce retailers have some major — and well-documented — advantages over their competitors: low overhead, vast inventory, and tech savvy. But BI Intelligence, Business Insider’s tech research service, believes a new technology offers bricks-and-mortar stores an opportunity to fight back.

Beacons are a small, low-cost hardware installed in stores that can be used to bring the analytics and targeting capabilities of the online experience to physical stores. We believe beacons will be a critical technology that physical retailers will begin adopting aggressively in the near future.

Why beacons?

Beacons emit a low energy Bluetooth signal that can be targeted directly to phones. Retailers have struggled to reach consumers when they’re in-stores, often because of poor cell signals. Beacons can overcome that difficulty. And a huge number of smartphones are now equipped to receive beacon signals via Bluetooth low energy (BLE).

Bii smartphone ble beacons

Retailers who install beacons have an opportunity to identify consumers when they come in the store and target them with promotions via mobile apps.

They can also begin to track how consumers shop in stores, and who their true “cross-channel” shopper really is. This is particularly useful to omnichannel retailers — retailers that have a presence in physical locations, as well as online and on mobile. In a sense, beacons can offer these retailers the sought-after bridge between channels.

Bii retail store initiatives

Beacons are the technology that seems most likely to allow retailers to achieve this objective, especially because it’s low cost and doesn’t require a huge money investment.

Ibeaconinstoretracking 2

But there are still some barriers that could impede just how significant beacons become for retailers. In particular, consumer reluctance.

Customers are generally open to in-store tracking but only if they opt in for it.

This will put the onus on retailers to develop apps consumers want, and provide offers, incentives, and content that will get them to want to turn location services on and opt-in to tracking.

This analysis is a distillation of research and charts from BI Intelligence, a subscription research service that closely tracks the e-commerce and retail industry. To gain full access to our ongoing coverage of the technologies disrupting the retail space, sign up and receive all our reports, daily briefs, and downloadable charts.