A Yankee Group executive speaking during a Mobile Commerce Daily webinar yesterday said that 90 percent of all commerce occurs in-store, signifying that businesses should be responsive in prioritizing mobile to deliver optimized mobile experiences using technologies such as beacons.

During the “How Beacons Tie in with a Retailer’s Larger Location Marketing Strategy” webinar, panelists from several different companies discussed the challenges and opportunities presented by beacon technology in relation to consumer acceptance.

“There are already over 195 million smartphones in use in the U.S., and that number is expected to grow to 250 million by 2017 with the exponential adoption of mobile devices,” said Sheryl Kingstone, research director for mobile leadership strategies at Yankee Group, Boston.

“Beacons answer many mobile user insight questions through data such as ‘What is the right time of day to engage?’ ‘Does location impact conversion?’ ‘Who are my customers?’”

“Beacons bring in a location-based marketing approach where there wasn’t before and build upon a consumer profile to make it easier to communicate and ensure interaction doesn’t intrude with user experience, creating personalized product information and location on a consumer’s journey,” she said.

Driving contextual engagement
Retailers are increasingly turning to beacon technology to bridge physical and digital experiences through shopping.

Currently, marketers are relying on GPS, cellular and WiFi connections to locate target demographics and their devices in order to push out relevant information.

However, marketers who are interested in specific niche areas such as an aisle in a grocery store or an end-cap display in a retail store are implementing beacons and Bluetooth Low Energy (BLE) due to the longevity of their battery life and their proven accuracy.

Kingstone also touched upon how instant information related to products and promotions delivered to mobile customers via beacons in-store enriches the consumer experience, and also gives retailers and brands a 360-degree view of their target audience.

Moreover, this aggregated learning requires no physical activation or app downloading from customers, who can uninhibitedly become open to more seamless discovery and engagement in-store.

Marketers can also improve their success rate through mobile loyalty programs driven via location-based initiatives.

Yankee Group observed that 66 percent of shoppers use mobile apps for shopping, receiving coupons and checking reviews; 55 percent of those responded to daily deals, text offers, and rewards programs, with 44 percent admitting they would recommend a company to their family and friends if it had a mobile loyalty program with personalized rewards.

Kingstone suggested using mobile as the glue to bind payments with loyalty to create a consumer use case that can drive consumer adoption.

Contextual awareness
Because brick-and-mortar stores remain accountable for the majority of sales, beacons present one of the most promising solutions to optimizing in-store experience.

David Gagne, vice president for wireless and services at Motorola Solutions, spoke on the future of beacon capabilities in relation to greetings, offers and coupons, and assistance and navigation pertaining to shopping lists.

He provided an example of the push or pull interface beacons foster in a mock shopping situation in which a consumer enters a grocery store and is is given the opportunity to place a deli order via mobile. Remote ordering systems would save time, provoke engagement, shrink lines and increase revenue, upsell efforts and basket size, all while decreasing labor for a franchisee.

The biggest challenge, he cited, is getting the proper opt-in information such as a cell phone number, email address or loyalty rewards number.

Agency perspective
In the past, content was context.

Brett Leary, vice president and group director of mobile at Digitas LBi, spoke on how location helps marketers gain a better understanding of people when the context is right.

He used an example of an ad geared towards 24 year-old males and positioned on ESPN about the new Ford F250. Without location as part of the marketing strategy, brands may not realize that someone converse of their target, such as a stay-at-home mom was interested and served the advertisement.

Mobile makes life targetable and enables marketers to attain relevancy and impact operations because it touches on so many different facets.

In-store, beacons enables better accuracy on foot traffic patterns and dwell time in-isle.

“What’s exciting from a retail perspective is companies, especially grocery stores, have a digital inventory they use to figure out how to monetize and piggyback off of in-store Bluetooth LTE efforts and data,” Mr. Leary said.

“Beacon providers are finding ways to see how we interact with the offer and connect the dots from an attribution perspective and ‘moment of truth’ to get smarter about their marketing mix,” he said.

Mr. Leary also highlighted Taco Bell’s use of location in its media strategy, in which it implemented a media test last  year geared towards fans traveling to college football games. When the car came to a stop (because speed could be engaged) Taco Bell sent push offers to remind passengers to stop at a Taco Bell location to purchase a case of tacos.

Personalization is key and beacons allow retailers to tap into their CRM efforts and add utility to shopping environments in a way never observed before.

“This technology is quite fickle, and from what we can tell, there is still a lot of education that’s needed,” Mr. Leary said.

“The most important thing is the consumers’ acceptance – How are we going to control when we communicate with these customers? Our main fear is users deleting the app due to marketing abuse, so we need a messaging strategy.”

Influencing purchase behavior through location-based and personalized efforts is being realized through beacons.

“Beacons allow the marketer to have a very rich view of the funnel and how it drives the purchase journey online to offline,” said Eric Newman, vice president of product marketing at sponsor Digby by Phunware.

Final Take:
Michelle is editorial assistant on Mobile Commerce Daily, New York