Beacons: A secret in building the best retail loyalty app

Read about building the best retail loyalty app with beacon technology

Published on
September 13, 2022


1. What are beacons?

2. Beacons for the in-store

3. So why beacons and not geofences?

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As you can probably guess from the blog title, we’re going to talk about how beacons can help you build the best retail loyalty app. As general as that sounds, we're really going to focus on why you need them for the in-store experience.

So, Beacons. For me, writing about beacons began…well, it began as you might expect. In a hole in the ground, there lived a hobbit- I'm sorry. It’s been difficult to write about beacons without making a reference to Lord of the Rings. It doesn’t help that I started watching the new Amazon Prime show. The show's third episode will have aired by the time this blog gets published and all I can think about is Aragorn bursting through that door at Rohan every time I type or read the word ‘beacon’. I’ve got Tolkein on the brain. That being said, I’ll quell any further Lord of the Rings talk from now on (except for the next little paragraph).

Like in Lord of the Rings, the beacons we’re talking about today also send signals to communicate a message, but are an entirely different technology and for an entirely different reason.

What are beacons?

This is probably a good place to start because when I first heard about beacons I quickly questioned the difference with what they do as opposed to geofences. Well, there is a difference, obviously, and that starts with the technology itself.

Beacons are small bluetooth devices that send repeated wireless signals that smart devices, like your smartphone, receive when in proximity through bluetooth technology. The typical range of a beacon is between 2-5 meters but without physical obstruction a message can be sent out to a device up to 30 meters. Typically in an in-store scenario the 2-5 meter radius is more common, and unlike a geofence, beacons operate in a smaller range and at even greater location accuracy (down to centimeters).

Photo credit: Pinterest

Geofences send messages to devices within a virtual circle or polygon radius. Beacons on the other hand are a physical object (see image) that sends signals once a smart device is in range. So, the core idea stays the same -sending location-specific information- but the approach is very different.

So, how does a beacon send a message? It’s not just about detecting a mobile device because that’s not exactly who the beacon is ‘talking’ to. The beacon is actually communicating with an app, and it's the app who detects the beacon first. Once it does, the app will send location-specific information to the server that the beacon is part of (so in this case the store’s server). The data transferred is specific to the app and to the customer’s profile. The exchange of data determines what information will be sent back to the device. What can be done with that data and what information gets sent back? We’ll get to that now but just before we do I need to make another thing clear.

Beacons for the in-store

For a beacon to work you need these three things:

  1. Location permissions
  2. The app
  3. Bluetooth

Take one of those things out and the beacon will not do its job. It’s therefore important to make sure your users have the app downloaded, understand and accept the location permissions required, and most importantly, have bluetooth enabled. I honestly have no idea why I didn’t swap “location permissions” and “the app” in the list because it now doesn’t match the order I’m describing here. Maybe it should be:

  1. The app
  2. Location permissions
  3. Bluetooth

Final list, in order, I guess. Happy? You’re welcome.

Anyway, the data transferred from the app to the beacon is used to send the user personalized information during their visit to your store. That can be a product promotion or letting them know about a general sale. But it can do a little more than that. The customer has an online profile, with a purchase history and perhaps even a wish-list. Knowing their purchase history you may want to give them recommendations and specific deals they’d appreciate based on what they bought from you. You can also use that information to let them know an item on their wish-list is in stock at the current store they’re at. Moreover, you could give them a personalized deal for that wish-list item should they want to buy it at that moment too. See where I’m going here? It’s targeted location-based marketing/advertising that goes down to the individual level. At this level of depth, a retail store will have an easier time convincing customers that receiving store-specific notifications while they shop is worth it.

So why beacons and not geofences?

It’s not necessarily a "this or that" scenario. In fact, it isn’t at all, they can co-exist. Yes, there are certain advantages to beacon technology. For one, unlike geofences, it doesn’t use GPS so battery drainage is a non-factor. But one works at a far larger scale than the other. Beacons are great (basically ideal) for the in-store experience. They work in those small ranges and have incredible accuracy. Utilizing both geofences and beacons can optimize your brick and mortar’s ability to attract customers and increase loyalty. For your customers, knowing that the app is working to improve and personalize the experience of being in your store gives them a sense of care. A “customer-first” mentality that makes it worthwhile to download and use your app.

Got the gist?

Beacons aren’t a new technology, in fact they’re almost a decade old by now. But they’re underestimated in the world of retail loyalty apps. The attention usually goes to geofences, and that makes sense. However, having both technologies in the arsenal can be hugely beneficial to your customers in-store experience. It’s the reason people download loyalty apps, they want to feel like an individual in a sea of customers, with their own deals and product recommendations. That’s a big part of building brand loyalty, at least I think so.

If you want to know more about how beacons work, feel free to contact us!