Most smartphone users are familiar with location-based services and applications that can be used for turn-by-turn navigation, checking-in to venues and searching for points of interest nearby. These apps rely on GPS technologies to determine the user’s location anywhere on Earth, and works great outdoors and over large geographic areas.
GPS doesn’t work well indoors and cannot really be used for indoor navigation and related services. However, a similar technology that works indoors has the potential to transform how enterprises, retailers, transit systems engage with their employees, customers and passengers. A solution that holds the promise of delivering on this vision is Bluetooth Smart beacons.
To clarify some of the terminology, “Bluetooth Smart” is a brand name that is used to refer to a class of low energy devices that use the latest Bluetooth specification (version 4.x) for transmitting data wirelessly. A golf-ball sized Bluetooth Smart beacon with a coin-cell battery can operate for several years due to its highly optimized power consumption. The beacon transmits a unique ID that encodes location information. Mobile apps can pick up these signals from up to 50 meters and use it to determine the users location and create virtual fences that users can walk in and out of.
Retailers, enterprises, museums and sports venues can scatter these low-cost beacons across their premises and when users wander into regions demarcated by these “micro-fences”, it can be used to engage the user in a unique way based on the location and the context.
The transformation of the retail experience is part of the first wave of micro-fencing applications. With stiff competition from online stores and competitors, retailers have the challenge of engaging their customers to keep them coming back to the physical stores, instead of turning to online competitors. Increasingly, retailers are looking at micro-fencing for providing new perspectives to the traditional brick-and-mortar shopping experience to lure in millennial customers who are otherwise more comfortable shopping online.
Here are five ways that micro-fencing can be used for transforming the retail experience of these shoppers:
- Welcome customers as they walk into the store. As users enter the store, they can opt-in to automatically check-in to the store through their branded app, which can be tied to retail loyalty programs. The store will gain visibility into customer demographics that can be used for promotions and campaigns taking place at the store, targeting and connecting better with the millennial shoppers.
- Push relevant content to the customer where it matters. Coupons and offers can be pushed directly to the users and further tied to personalization and recommendation engines that deliver highly relevant content that increase the likelihood of a sale. This would also allow the store to conduct flash sales to manage inventory and marketing campaigns. Entering the micro-fences indicate the customer’s proximity to the product being offered, which increases the chance of a successful sale.
- Wallet-less mobile payments. Micro-fencing can be further used to drive a wallet-less mobile payment experience that doesn’t require the customer to pull out his/her wallet or the mobile phone. To illustrate this with a scenario, users with the store’s branded app are automatically checked in to the store when they enter. Checked-in users are listed in the store point-of-sale and during check-out, payment can be performed through photo verification with the customer photo on record and verbal authorization of the payment. Such a seamless experience has the potential to dramatically improve the payment experience, thereby driving the loyalty of millennial shoppers.
- Product location and in-store routing. Users can maintain shopping lists in the store-branded app and suggestions on the optimal route through a large retail store can be mapped out to users. The store can glean insights from traffic patterns of customers to optimize product placement. This will provide millennial shoppers the ease of locating their desired products, reducing decision making time and leaving more time for shopping.
- Customer insights and analytics. The information captured during this shopping experience can provide insights into the customer’s profile and assist in providing additional services that help improve the shopping experience in a very targeted manner. Furthermore, it will help the store in optimizing operations and inventory that will have a direct impact on the bottom line of the business as well as on the overall shopping experience of a millennial customer.
It’s exciting times for retail as micro-fencing opens up opportunities to offer whole new shopping experiences for the millennial shopper and is poised to redefine the traditional shopping experience.
The article was originally published on Retail Minded on June 26, 2014 and is re-posted here by permission.