Despite being billed as the next big thing in retail tech, uptake of beacons across the UK has been pretty slow. Why has this been the case?
Despite being billed as the next big thing in retail tech, uptake of beacons across the UK has been pretty slow. No doubt with Apple’s backing there’s a substantial force behind the technology, but will it be enough to become mainstream in our stores? To date we’ve seen & heard about small trials (for example Odeon, Easyjet and Tesco have undertaken pilots) but few full blown implementations.
If deployed properly, beacons give retailers a great opportunity to learn about their customers whilst they’re in store and it could be an excellent way to understand behaviour, especially when combined with other location based data. Others may consider it as a means to sending promotional offers to consumers. So what’s holding widespread adoption back? Is it the cost of adoption? Possibly, but providers are now introducing new pricing models, with some giving the technology away for free and charging retailers only when a customer engages with a campaign, which may help. However pricing is only one of the entry barriers.
Far more important is whether this disruptive technology is in the interest of shoppers. The focus for the retailers has to be to create a better experience for the shopper first and foremost, the resulting promotions and offers should come a distant second. Of course retailers want to learn more about the shopper journey, but when it comes to push offers, it’s only good if shoppers use it and want it and right now the demand just isn’t there.
We also need to remember that beacons operate over Bluetooth. As we all know battery life is poor, and as we add more and more apps, videos and photos to our smartphones the problem only gets worse - so what do we do? Turn off Bluetooth to save battery - and when we do, the beacon is rendered useless. We also have concerns about security and its potential for data security breaches. If beacons do take off significantly, there’s going to be huge pressure from consumers to improve battery life and protect identities.
Offers to deploy beacons free of charge may be tempting to retailers who are stepping into this area for the first time. The lack of an upfront cost will be appealing, but thought also needs to be given to the longer term picture and business model if this takes off in a big way. For example, do retailers want to be paying per customer interaction - once when they engage with a campaign and again when they make a purchase? I’m not sure they will. Most retailers should want to manage the wealth of data they pull in by themselves. Data is power after all.
It’s great to see innovative tech providers entering this space but retailers will only pay if there is incremental value to them and their customers. Does it help them give the customer a better experience and learn more about their behaviour? Does it help them sell more as a result and reduce other costs? Unfortunately the bigger problem is that most of us wouldn’t know what to do or how to use this technology - and neither do the majority of retailers.
Stephen Millard is chief executive of retail technology accelerator Eccomplished