Everything you need to know about connected beacons

10th May 2016

Connected beacons were introduced to the world at the Apple WWDC in 2013 and have since generated massive interest from consumers and businesses alike. Analysis conducted by ABI research suggests that beacons are set for explosive growth in the next few years. They estimate there are currently 1 million beacons throughout the world, with this number set to surpass 400 million between now and 2020. This explosive market growth is largely being driven by increasing demand for hyperlocal marketing services, particularly within the retail sector. Whilst location based marketing has always held great promise for mobile developers, it’s only now that the required infrastructure is starting to properly take shape and marketers are starting to truly understand the potential capabilities of connected beacons.

What is a connected beacon?

A connected beacon is a device that transmits radio signals and small packets of data to mobile devices. Often these beacons are used for retail purposes and are fixed to a physical in-store location. Beacons transmit small data packets to an array of mobile devices such as smartphones, tablets and increasingly wearable devices such as smartwatches. Businesses who adopt beacons can adjust signal strength and the time between each signal depending on the required level of coverage. Mobile apps can be developed in order to ‘tune-in’ to the signals transmitted by each beacon and when they pick up a relevant signal, can trigger a message or action via the user’s mobile device. It’s important to emphasise that beacons cannot read data from mobile devices, they’re only capable of sending data in one direction.

As things stand currently, the majority of beacons transmit hard coded data. This means that the data does not change frequently and tends to be fixed once the beacon is configured. This is where things get interesting as it’s up to mobile app developers to interpret the data that beacons send in an intelligent and meaningful way. This offers enormous potential to mobile app developers and businesses (particularly retailers) to develop intelligent mobile apps that interact with connected beacons in order to provide more value for consumers.

The market opportunity for connected beacons

According to Cisco systems, approximately 52% of mobile advertising expenditure ($10.8 billion) will be associated with location based targeting campaigns by 2017. Whilst connected beacons provide significant opportunities for retailers in particular, they’re also impacting many other vertical industry sectors from concerts and events to hotels and sports stadiums. Whilst there is a huge amount of hype associated with beacons right now, many marketers are still trying to understand how best to leverage their potential.

How do connected beacons work?

Connected beacons operate using BLE (Bluetooth Low Energy) which is a modern version of the traditional Bluetooth protocol. BLE is designed to be more efficient and uses less power in order to transmit more data to each mobile device. Beacons tend to be powered by batteries and require balancing in order to suit each application. Some beacons can be powered by solar or USB/mains power and tend to last longer than batteries. Battery life can vary depending upon a variety of factors between 1 month and 2 to 3 years. Each connected beacon is strategically positioned and are typically attached to walls, ceilings and other objects within proximity of the user’s mobile device. Depending upon the power level of the beacon, mobile devices can receive a signal from up to 70m away.

Why connected beacons matter for your business

We live in a world whereby today’s consumers are constantly connected. In an increasingly connected world, retailers and brands need to adapt in order to provide highly contextual messaging and offers for consumers. Part of this process is understanding who your customers are, the places they visit and things they like to browse and buy. Beacons enable mobile marketers to interact with each consumer in a completely personalised way at the right time and in the right place by sending engaging messages based on location, proximity to each beacon and a variety of other factors. Building such a rich profile visualisation of each consumer through connected beacon marketing presents an enormous opportunity for businesses and brands. It enables brands to deploy highly targeted messages in a timely fashion without being overly intrusive.

Supermarkets offer a great example of how geo-fenced beacon technology can be deployed in a highly effective setting. Supermarkets can leverage the commercial prowess of connected beacons in-store to engage consumers with specific brands. This involves a specific brand deploying a beacon near to their product within the store and sending messages to the consumer’s device when they appear within range. This enables the retailer to push specific brands and helps to boost sales of specific product lines and categories. This assumes that the consumer has already downloaded the branded app, which provides an unobtrusive marketing experience based on historic shopping habits and behaviours. It’s a powerful way for brands to engage existing customers at the point of sale in an unobtrusive manner whilst enabling retailers to sell more products and boost revenues.

Creating your first connected beacon campaign

Beacons are low maintenance, when it comes to cost and upkeep over time (and they don’t require much power), whilst supporting a proximity range of up to 70 meters. If you’re a business or brand thinking of adopting beacons, there are a bunch of things you need to consider. Like any marketing experiment, it’s best to start small with a few targeted campaigns and test results based on user feedback before adopting a full scale roll out. If you want to get something up and running quickly, start with a small test and target a tightly themed audience within a small number of locations. It’s worth selecting more than one location in the first instance to conduct your pilot as the results of your test may suggest that certain locations prove to be more productive than others. You can experiment, analyse the data, adapt and refine your beacon campaign over time. For a project of this scale you might only need to kick off with half a dozen beacons. Beacons tend to cost between £10 and £30 depending upon their battery life and features.

The first thing you need to do is develop a mobile app to support your beacon. If you’re a brand or business with an established customer base and social following, you’re in a great place when it comes to creating your first beacon campaign. There are a bunch of options you can consider when developing your app, very often, working with an established agency who have experience in developing mobile apps and connected beacon campaigns is a great start. Beacons are still a relatively new phenomenon, so it’s important you engage with an agency who understand the complexities associated with the technology. Once you’ve developed your app, you can start thinking about your first foray into beacons.

Deploying a small experiment enables you to understand which parts of the deployment process are easily scalable for future reference and arm you with valuable knowledge on how to scale things up. It also helps you to understand potential pitfalls and mistakes to avoid. In essence, you could kick off with a small campaign that only costs a small amount, say less than £100 to get you started. There are a bunch of tools available to monitor the performance of individual beacons on an ongoing basis, enabling you to measure battery performance and signal strength.

Beacons provide a valuable source of data

Nowadays most businesses understand the importance of analytics and data driven development. The great thing about adopting beacons is that they remove the guesswork when it comes to targeting customers by providing rich analytics and insights that enable you to optimise your campaigns over time. Beacons provide your business with an unparalleled opportunity to tap into an enormous data set that provides insight into how your customers behave and the factors that cause them to interact with your brand and make informed purchase decisions. You can analyse which beacons are most effective in terms of customer ‘hits’ and establish how long they spend within the specified proximity of any particular beacon. You can establish which times of day and contextual settings (particularly within a retail environment) provide the best opportunity for you to increase sales.

In a retail environment this is particularly poignant as you can establish if products are successful based on their own merit, or whether specific in-store locations are liable to cause increased consumer interaction with a particular product. Connected beacons are not just the preserve of enterprise, they’re a serious marketing tool for SME’s too and can be rolled out in a quick and highly cost effective manner.

How to get started with connected beacons

Once you’ve managed to install your first set of beacons, you can start thinking about how to design your push messaging and contextually targeted offerings for customers. These promotional messages can include rich media content such as images and videos that help to support and progress the customer’s purchase decision. Using beacons in a timely manner will help to move your customers through the buying cycle quickly. Rich media can be deployed whenever a potential buyer is in range of your beacon, and follow-up messages can be deployed if they choose to spend more time within the proximity of a specific beacon.

If you want to find out more about connected beacons and how they can impact your business and the costs involved, it’s worth speaking to an experienced app development agency. If you’re interested in learning more about the commercial benefits of connected beacons for your business, check out our Scotmid case study.

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