As buzz about beacons continues, small, local businesses are banding together and experimenting with the technology to leverage their collective power to provide greater value and reach.

Experts believe that smaller retailers can benefit more from joining extending beacon networks rather than jumpstarting their own. Since consumers are pressured with a crowded mobile application space, they are more likely going to participate in retail beacon experiences with an app they are already familiar with.

“For smaller retailers, I think that creating or joining a cooperative network has some really interesting opportunities,” said Jeff Anulewicz, executive director of strategy at Meredith Xcelerated Marketing, Detroit. “Any time you are able to pull together a coalition of brands you gain efficiencies, whether it’s efficiency of the pooled marketing budgets, promotions, both direct and cross, offers or campaigns, you’ve effectively increased your reach and the potential for word of mouth, and with these efficiencies you theoretically get scale.

“Retailers that want to jump onto the beacon bandwagon really only have two options to do so,” he said. “On one hand, they can make the investment in the purchase and deployment of the beacons along with the mobile app required to enable the experience, or open the experience to existing apps that users already have on their device that leverage a beacon network.”

Recent occurrences
Usually smaller companies are hampered by budget issues, which prevent them the opportunity to test certain mobile capabilities. However, beacons are an affordable option that require more work on the backend in addition to specific software capabilities for them to be installed.

If these smaller retailers do not have the necessary resources, they cannot take advantage of beacons.

“Beacons have the potential to be a valuable data tool for smaller retailers, giving them information about their customers and their shopping habits so they can more efficiently serve them,” said Esha Shah, manager of mobile strategy at Fetch, San Francisco. “Despite its potential, however, smaller retailers have been slower than the larger retailers to adopt.

“Although beacons are incredibly affordable, there is technical work required to set up a messaging system through which the beacon can send notifications to customers, and if a smaller retailer doesn’t have the resources for this it may dissuade them from setting one up in their store,” she said.

In bigger cities such as New York and with the use of larger, franchise companies, beacons are within reach.

For example, in August, more than 40 local merchants near the popular Union Square area in New York, including TGI Fridays and Brother Jimmy’s, began participating in a coalition that is leveraging the power of mobile technology to increase traffic, sales and loyalty.

The Union Square Loyalty Coalition, which is being spearheaded by mobile loyalty platform LoyalBlocks, is focused on helping local businesses interact with one another while enhancing customer engagements. The program enables shoppers to receive personalized deals on their smartphones using beacon technology and build their status as they frequent locations in order to achieve better rewards (see story).

The coalition focuses on building partnerships between participating merchants and facilitating communications with local customers.

Customers who have downloaded the LoyalBlocks app are greeted with a push notification when they enter a participating location that will include a personalized deal. From there, customers build status at each location they frequent, and enjoy better rewards as their status increases.

These efforts help to create happier customers and increased loyalty to these merchants.

“To me, the question for these retailers around adoption – should they or shouldn’t they – has less to do with supporting their neighbors than demonstrating value to their potential customers,” Mr. Anulewicz said. “In the end, the greatest barrier for success in getting shoppers to engage in a beacon experience is getting them to download the app in the first place.

“As with anything in today’s retailer/consumer relationship, it comes back to the value exchange,” he said.

Holiday-focused
Similarly, the city of Alpharetta, an Atlanta suburb, is leveraging mobile application Rately in its execution of beacon technology in numerous local retailers to promote and reward holiday shoppers.

So far, 80 percent of retailers located in downtown Alpharetta have joined the program, amounting to more than 30 participants. In an effort to modernize its community, one of the downtown businesses approached its local government with an introduction to beacons, which prompted the launch of the program (see story).

Once the Rately app has been downloaded, users can actively start shopping in the Alpharetta area, and the app will credit users for each visit they make to participating stores.

Rewards offered range from a free cup of coffee from coffee shop Mugs on Milton or a chance to win a Yeti cooler from sporting goods retailer Alpharetta Outfitters.

On Rately.com/Alpharetta or the Rately app, users can view all participating merchants and the rewards offered through the program. There is a range of restaurants, bakeries, delis, nail salons and boutiques participating.

The key to success in Alpharetta’s beacon deployment will likely be the Rately app. Smartphone users are much more likely to download and use Rately rather than a stand-alone app created for this initiative alone.

Apps such as Rately have more users and acquire much more attention than localized apps. Leveraging those large databases leads local merchants to success.

“Some existing beacon networks like InMarket tout 30-plus million monthly users through apps already installed on devices and used daily,” Mr. Anulewicz said. “For a small retailer with an equally small marketing budget, access to an audience of that size, even if only a small percentage of that audience shows interest or purchases, is extremely enticing.”

Final Take
Caitlyn Bohannon is an editorial assistant on Mobile Commerce Daily, New York