Beacons: What they'll do for retail

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Making stores smart. [MUSIC] Bluetooth beacon technology has been getting a lot of buzz lately. But the area that is at the center of the heat map is their usage in retail stores. The idea is fairly simple. A small device that runs on batteries would be installed on a wall, a counter top or a ceiling of a retail store, and it could be many of them installed. They would in turn send out very short data strings to all the blue tooth receivers around them, typically your smart phone. And all of this happens on a new technology called Bluetooth Low Energy or Bluetooth Smart. It's different than the Bluetooth you use right now, primarily because it uses very little energy and it doesn't require all that tedious pairing and connection. Now the short, little messages that the Bluetooth Beacon sends out, that your phone picks up, instruct your phone to go to the web and pull down content that's related to where you are or what you're doing. It can be very focused on the immediate area where you're standing, or it could be widened out to relate to the entire store. There's store proximity. Beacons could reach out to your phone on the sidewalk, let's say, to urge you to come into a store based on its products, special offers, or your past patronage. Then there's the check in stage. A beacon just inside the door can trigger a reward for you coming into the store, tailored based on your customer history. And it could also tee up a preapproved digital payment method for whatever you may buy. Then there's product information. As you stroll the store, the products in it would describe themselves on your phone screen simply by you approaching them. That information can be powerfully personalized because remember, the contents being served up by robust, existing web servers not that limited little beacon. And finally check out. no more having to look for a cashier or even an employee with a phone or tablet to check you out. You just leave the building. Remember, you already set up your payment back on beacon's stage number two. So you're already approved. Nielsen research suggests the smartphone has set the table for the beacon. 70% of smartphone shoppers use a store locator. 63% use their phone to check prices and product data in the store. 37% keep their shopping list on their smartphone. 34% pull up mobile coupons at checkout. And 23% have used mobile payment on their phone in some form or another. Now, of course, before this gets any real traction we've gotta get through a few hurdles. Apps. What app do you need installed for the Beacon to work on your phone? Worse case would be an app for every store. Better case would be for every chain of store. Ideal would be that the technology is built into the operating system level and you need not install anything, but we're not there yet. Handsets. Your phone needs to have bluetooth low energy hardware built in. Now iPhones have had it for awhile with iOS seven and future iOS eight support. Android, Windows Phone and Blackberry have been supporting it at the operating system for awhile, but it's gonna be awhile before its ubiquitous on Android handsets. Not until 2018 will we get to maybe 90%. And finally there's trust. There's a lot going on here that might spook consumers. This idea of automatically being logged in when you enter a store, having your personal preferences linked to your visitor. Automatic payment already being authorized. That could spook as many consumers as it delights if it's not handled well. This is a good place for merchants to be just as sensitive and respectful as they are innovative. But I know this, every shopper I've encountered would have a much better time in the store if they could identify what they want, find it within the store's geography, and pay and get out of there without any delay or friction. So beacons have a definite possibility for next big things to add. [MUSIC]

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