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Prior to the advent of proximity beacons using Bluetooth Smart technology, convenience store owners were largely insulated against the disruptive effects of mobile technology.
Other retail categories have suffered dropping stock prices, management teams being culled and store closings because of the increased practice of showrooming: customers who price check with their smartphones and buy merchandise online while standing in a store. Due to the convenience element of the c-store business, smartphones haven’t had the same effect. Although some consumers price-shop for gas on their phones, the response has not required huge technical investments from merchants.
While the smartphone hasn’t disrupted the c-store, however, it is becoming ever-present in it.
So, what is a retail beacon and how is it disruptive? For most, Bluetooth technology is synonymous with getting your headset to talk to your phone. Three years ago, the industry ratified a new standard, Bluetooth 4.0, propelling many startups and some large companies to put Bluetooth to use in a completely different context.
Using Bluetooth technology, proximity beacons allow retailers to understand who is in their store and when they are there. It also provides the ability to engage customers in new and exciting ways, such as enabling mobile payments at the pump, personalizing digital displays, and analyzing and measuring the movements of customers.
Beacons are small, low-cost devices. They can be as tiny as a guitar pick, but are no larger than a couple of decks of cards, with costs as low as $5 to $10 apiece. Often, they are battery powered, allowing versatility of placement inside a gas pump or a beer cave, next to a point-of-sale terminal, a digital display, a category of snacks or an ice cream freezer. They simply alert mobile apps running on a customer’s phone when the phone is close to a beacon.
These apps then infer how close the customer is, based on the strength of the signal. A weak signal means they are probably far away, with the opposite being true as well. The app can choose to do different things based on how strong the Bluetooth signal is. A single beacon can:
- Trigger an app to display a welcome message with the offer of the day or a loyalty points update when it detects a lower-strength signal from a customer arriving on the forecourt;
- Monitor presence in-store as the signal gets stronger when the customer enters the c-store; or
- Determine if the customer stood in line and measure for how long, as indicated by an even stronger signal.
Potentially, many apps can leverage the same beacon, whether it’s the oil company’s app, the c-store company's app, a loyalty wallet that works across different retailers, a social media app that enables check-ins and advertising, or perhaps the game that a passenger is playing in the back seat of the car.
Even though each mobile app is using the same beacon, they can provide a different and unique experience for the consumer.
In an industry where retailers’ marketing dollars are in short supply, apps from consumer packaged goods (CPG) brands for the products sold in the c-store are particularly important. These companies possess marketing dollars, are already investing in mobile apps and have their eyes on the prize of a direct relationship with the consumer. Their apps often come in the form of novelties, games or entertainment offerings. By placing a beacon near the shelf or even building it into a promotional display, the CPG company can achieve a level of targeting and immediacy of message at the point of decision that previously has been hard to achieve.
It’s been exciting to see the response to the beacon phenomenon. In an industry known for slow adoption due to fragmentation and thin margins, we are seeing rapid change and significant impacts on business. Most of the major players have beacons on their radar, and many are working on pilots now.
Who will the winners and losers be? There are ways for all types and sizes of retailers to take advantage of proximity beacons, but mid-sized retail brands have an advantage. They are large enough to spend the time on this opportunity and typically have the ownership and control of their stores needed for execution.
However, smaller jobbers are looking at their partners and suppliers of systems, and are leveraging what they are doing in a more packaged approach. The big players certainly have the volumes to invest more in apps and the systems to integrate payment, loyalty, digital displays and analytics.
Ultimately, the real winner will be the customer, when convenience stores become more convenient.