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How Beacons Make Retail Smarter

For the past several years now, retail has been seeking to compete with online shopping by way of an expanding embrace of smart technologies. With online stores offering consumers greater convenience and more options, the retail stores of yesteryear quickly became somewhat outdated by comparison. By focusing more on technology however, in-person stores have been able to transform themselves with regard to both internal processes and customer experience.

As was explored in some detail in a past look at AI in retail, many of these store transformations have revolved around “intelligent” technology. AI can help stores to better understand and cater to customers, manage inventory to keep supply optimal, compliment customer service, and even help determine proper pricing. Some of these benefits actually cross over between the in-person and online spaces, but applied to brick-and-mortar stores they can bring some of the convenience of internet-based shopping into the real world.

Stores can bring about these benefits in a number of different ways. But some of the most helpful and subtly intelligent tools are beacons, which we’ll discuss in more detail below.

What is a beacon?

The best definition of beacons may well be that they are devices that facilitate “location-based mobile customer communication.” To elaborate on that basic definition though, we’ll add that a beacon is a small, Bluetooth-enabled tech tool that can be placed anywhere in a store, and which can then connect with visiting customers’ personal devices. Through that simple design and functionality, a beacon can lend a store a certain kind of interactive intelligence — allowing for the store itself to communicate with the people who choose to visit it (or possibly even with the people who are simply in the vicinity).

How do beacons work?

In a word, as mentioned, Bluetooth is what makes beacons work. However it’s worth noting that these are very small devices, meant to inconspicuous. They are not communications stations within stores, but rather unseen tools that do provide a sense of general intelligence. And devices this small are able to do what they do primarily thanks to accelerating performance in printed circuit boards. For those who may not be entirely clear on what a PCB is, it is the tiny board within any electronic device that transmits signals and turns them into functions. PCBs have been around for a long time, but steady improvement in recent years has enabled engineers to pack better performance — including fast and reliable wireless connectivity — into smaller boards. These advancements are enabling the creation of a lot of small and powerful electronics today, with Bluetooth beacons among them.

What do beacons do?

Beyond the simple ability to reach out to customers and connect with their devices, beacons can offer a number of different functions. As you might expect, they’re not uniform across different stores. But a Bluetooth beacon can access a customer’s purchase history, assist a customer with locating an item, convey a recommendation based on preferences, or even alert passersby to a special discount deal, or an opportunity to sign up for store alerts. As we alluded to above, these functions help stores to imitate some of what consumers like about online shopping, providing a more efficient and personalized experience.

What impact do beacons have?

The functional impact is that beacons can indeed make stores smarter. By way of the various types of performance just outlined, beacons turn stores into interactive and responsive entities, in a sense, that can actively improve the customer experience — and by extension drive conversions. In a broader sense though, these functions produce two key benefits for stores. One is sales. A few years ago, a write-up on the impact of beacon technology estimated $4.1 billion in additional sales in the U.S. alone over the course of 2015, specifically as a result of beacon use. That number has almost certainly gone up since then, as more stores have begun to make use of these devices. The second benefit, meanwhile, is research. In the course of their interactions with customers, beacons can gather valuable insights that stores can use in anything from marketing, to direct consumer outreach, to product development.

With all of this considered, it’s fair to say that beacons are among the most effective and important AI tools that in-person retail can implement today. We’d bet that many more stores will be using them in the coming years.

About the author

Sue Jory is a freelance business writer who has made it her mission to follow the latest trends.

She hopes her articles will provide her readers with a detail outlook of how the business world is rapidly changing and what to look for. In her free time she plays chess.

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