Beacons are witnessing growing penetration across high volume verticals. At the same time, the markets for both existing and new applications are maturing, leading to larger roll-outs. Growing integration of beacons in cameras, LED lightings, point of sale (POS) devices, digital signage, and vending machines is expected to propel the industry growth over the forecast period. Apart from retail applications, beacons are also projected to become a common commodity in industrial applications.
The relatively lower price point of Bluetooth-based solutions is playing a pivotal role in their large-scale adoption in various domains. This, coupled with the usage of smartphones by virtually one and all has taken marketing communication to the next level.
What exactly is beacon technology?
They are low-powered, low-cost transmitters that can notify nearby mobile devices to perform a particular action when devices cross paths. The adoption of beacons by several businesses currently is primarily for maketing purposes and compliments the business’s promotion and advertising strategies. They can be deployed on retail stores, restaurants, real estate properties, amusement parks, hotels, gymnasiums, car service garages or on any business which has a point-of-sale relevance.
Bluetooth beacon are poised for large-scale adoption throughout the forecast period, with a projected CAGR of 95.3% from 2017 to 2025. Key industry players include Estimote, Inc.; Kontakt.io; Accent Advanced Systems, SLU; Onyx Beacon Ltd.; and Bluvision Inc.
How Does it work : The B2C Phenomena
To understand how beacons work let’s take an example of a Berger Quick Service Restaurant with beacon deployment.
- Let’s assume, beacons are deployed at the entrance of the restaurant
- These beacons transmit signals in its range which vary from 20m to 300m.
- Potential customers’ Smartphones with bluetooth functions and within the range of beacons pick up the signals from the beacons.
- The customer then sends the ID number attached to the signal to the cloud server.
- The server responds with the action linked to the beacon ID. It could be a notification or a marketing message conveying introduction of a new appetizer, it’s special offers, combo deals and up-sells.
- Ideal for communicating with motorists and inform them how near the restaurant is (in metres or Km)..
- These notifications entice customers/motorists to visit the restaurant.
How Is The Beacon Activated
Depending on the kind of beacons you are using, indoor beacons, long range beacons, keychain beacons, pocket beacons and outdoor beacons, the activation process will vary. Some of these requires you to insert batteries whereas some of them have inbuilt batteries. Indoor and Outdoor beacons will need external batteries. Likewise, Indoor beacons and keychain beacons do not need external power button. It is these batteries and power buttons that activate beacons. Once it is activated, it pulls the campaign assigned to it and broadcasts it to smartphones nearby.
The Appeal Of Beacons To Marketers
- Very Cost-Effective Way To Communicate To The Target Audience; Just the need of a battery, or not even that. The cost for running it are negligible compared to the reurns. Retailers reveal at least a 10% increase in profits in the first three months. Restaurants endorse 200%-400% ROI. Only the digital menu board can be as effective.
- Location – Based Personalized Advertisements: Since the beacons send signals to smartphones nearby, they can connect well with potential customers within their vicinity. Assuming the business has demographic and psychographic details of customers, personalized messages and notifications can be sent.
- Bridges The Gap between Offline And Online Marketing: Restaurants, retailers, gymnasiums, car garages, salons and the hospitality sectors can promote their offline business by advertising them online through the beacons.The smartphone user can also download the app of the store enroute to the town and visit the store. And people living within the vicinity get connected on a gular basis and are reminded of the various offers, lucrative deals and a great in-store experience.
- High Click-Through-Rate: The CTR of beacon campaigns are far higher than other communication platforms such as RFID and WiFi, which entail high upfront costs and more. The average CTR of beacon campaigns are 3-4%, as compared to 0.119 in Facebook and 1-5% in Twitter. The CTR in beacons is approximately 80 times the CTR of display ads across all formats. All these facilitate better customer tracking and engagement apart from innovations in deliverables.
- Smart Integration With Facebook And Google Ads: Bluetooth technology enables marketers to keep track of their customers by reiterate communicating even after the customer has left the store. They can convey advertising messages on facebook and google ads and keep the customer engaged with information on new products, services, events, loyalty programs, special offers etc.
- Measures Offline Analytics And Customer Behavior: facilitates best marketing strategies by analysing customer preferences and buying trends/ patterns.
- Number of notifications sent out
- Click-Through-Rate of individual places and campaigns
- Which type of campaigns/ brands are performing well
- Customer details, duration of visit and more
- Opportunity For Small Businesses To Compete With Larger Ones: While it was speculated that larger businesses will adopt beacons, with the encouraging results revealed, more and more smaller businesses are adopting it and getting better results. The benefits enable smaller businesses to design the best mix on their structured offerings with their targetted audiences. This way they build loyal customers and keep competition at bay.
- Order-Ahead Facility and Mobile payments: From the customers’ point of view, beacons offer the next step in convenience. While a motorist is driving he can order-ahead from a restaurant upon receiving a beacon and make payments too. On arriving at the restaurant he can sit down to eat straight-away as his order has already been processed in advance. Same can be applied to car garages, hotels and salons.