What Happened to Beacons? The State of Proximity Marketing Beacons in Retail and Beyond

Beacons are in their prime as a proximity marketing technology, finding more applications across retail, travel, and real estate. Here’s our guide to its business impact.

Published: July 30, 2019

Updated: May 26, 2022

By Nika Vartanova

What Makes Beacons Popular?

By 2020, the number of beacon deployments is expected to reach 400 million globally (GeoMarketing). These low-cost inconspicuous devices offer a myriad of marketing possibilities to connect with customers on the whole new and deeply personal level across a spectrum of industries. Small and unobtrusive, beacons owe their popularity to the following three critical factors:

Beacon Technology Has Matured

Although six years may not seem like a long time, in modern technology that’s ages. Since its inception, beacon technology has greatly improved. Modern beacons employ Bluetooth 5.0 for faster connectivity and greater range, which can be adjusted from a few inches up to 230 feet (70 meters) with software-programmable TX Power.

Beacons Are Affordable

Another feature of beacons that accounts for their popularity is affordable pricing. A single piece costs $20-25 on average, while the price can go significantly down (by up to 40%) if purchased in bulk. Affordability makes beacons a powerful and widely used medium, especially for small and medium-sized retailers who find similar solutions based, for example, on Wi-Fi connectivity, too costly.

Beacons Are Omnipresent

According to Statista, the beacons technology market is estimated to increase at a CAGR of 59.8% to reach about 56.6 billion U.S. dollars in size in 2026. In 2018 alone, more than 4 billion beacons were produced (Fortune Business Insight’s Annual Report).

The technology makes a sizeable impact, especially in retail, where the global market value of beacon technology is estimated to surpass $2.6 billion in 2026 (Statista), a tenfold increase from $280 million in 2016.

What Are The Benefits of Beacons in Proximity Marketing?

When we think beacons, the immediate association is frictionless shopping. Beacons can be installed anywhere inside a retail store or a shopping center. Employing proximity technology, they transmit Bluetooth signal and establish a one-way connection with mobile devices within their operational range.

Once beacons connect with shoppers' devices (smartphones or wearables), they can awaken mobile apps or even activate digital wall displays to tempt the device owners with information tailored to their interests and preferences—all after welcoming them to an outlet as if they were long-standing customers.

Beacons are so small that they can be placed right amid displayed merchandise. This is important because apart from personalizing the shopping experience, beacons can detect consumers’ locations and direct them to displays which may be of interest.

Personalized Customer Experience and Beyond

The key application for beacons in proximity marketing is delighting users with truly relevant and immediate customer experiences. It’s a critical benefit that these tiny pieces of equipment are delivering to businesses worldwide, as customers today have become much savvier and more demanding. The following statistics from PwC’s The Future of Customer Experience report confirm that:

73% of all consumers point to customer experience as an important factor in their purchasing decisions.
43% of all consumers would pay more for greater convenience.
65% of U.S. customers find a positive experience with a brand to be more influential than great advertising.
63% of U.S. consumers are more open to sharing their data for a product or service they say they truly value.

With those numbers in mind, beacons are one of the most strategic instruments that brick-and-mortar operators may use to push back against online consumerism. This technology provides a huge window of opportunity for retailers to enrich customer experiences and drive bigger sales.

While nurturing customer centricity through personalization is central to beacon-based proximity marketing, retail stores can also benefit from using beacons as utilities, for example, for intelligence gathering and smart business analytics. As hardware and software improve, it will likely become the norm to integrate beacons with retail software such as POS and CRM.

Beacons can trace customers’ pathways through a store and deliver diverse information about the specifics of customers’ buying behavior and shopping preferences. They can provide answers to strategic questions such as

“Which alleys in a supermarket does each customer traverse?”
“Which shelves does a particular person skip?”
“How much attention do they pay to in-store advertisements and promotions?”

By embracing the proximity technology and plugging in tiny beacon transmitters, shops can enhance their loyalty programs. Beacons do away with inconvenient paper coupons and cards that can easily get ripped or lost. Instead, they capture all discounts and loyalty points and send them directly to the customer’s phone after each completed purchase.

With beacons, stores can also push real-time personalized product notifications to customers’ mobile devices. Depending on the granularity of data collected by beacons, customized messages can range from a general “save 20% today on our Friday sales” to a laser-sharp and highly personalized “Mark, only today get 30% off the shirts to your right.” The messaging can be narrowed down to the specific area where a person is standing or widened out to an entire shop or section.

Beacons are also an attractive alternative to traditional payment methods, allowing customers to pay for their shopping quickly and without hassle. With beacon payments, a customer waves their smart device with an enabled shop app in front of a beacon, tap in their PIN on the device, and the payment process is through. That’s how a Danish banking leader, Danske Bank, delivers its proximity payment app, Mobilepay, to clients. Or how Skycash, the largest platform of urban services in Poland, enables public transport ticket payments to commuters in several Polish cities.

If the above payment scenarios bear an uncanny resemblance to NFC payments, that’s because from a customer’s perspective the two payment methods are quite similar. However, the devil is in the costs. NFC involves the installation of expensive contactless hardware pieces, which can be a great barrier for smaller retailers or public institutions. Beacons deliver the same immediacy and ease of service while bringing the costs down significantly for smaller organizations.

Let’s summarize some of the most notable beacon applications in the retail market:

Beacons are perhaps the most strategic instruments that brick-and-mortar operators may use to push back against online consumerism.

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Beacons Serving Travel and Hospitality

While the hospitality industry makes relatively little use of proximity marketing as compared to retail, beaconing opens up some great new avenues for hotels, restaurants, and other tourism-related venues.

Tourist-Friendly Cities Leverage Proximity Solutions

Given the contextual capabilities of smart beacons, cities can use them to become more attractive tourist destinations. In smart cities such as Singapore, Paris, or Seoul, tourists roam freely, exploring important sights and monuments with offline apps, get restaurant and shopping recommendations, check schedules and itineraries, and receive transportation updates straight to their phones.

Their city experience becomes laidback and easy; they need little preparation or research to hit the town, as all information they require becomes instantly available with a single swipe. Beacons allow them to experience cities on a whole different level, easily find their way around, and save money with coupons and discounts. As they approach various points of interest, they can read or listen to information about the landmark, exactly as they would do in a museum.

Bringing Museums to Life With Beacons

Speaking of which, museums are becoming one of the main beneficiaries of beacons and proximity marketing in tourism, leveraging these devices to deliver personalized tours based on visitor preferences. Paired with Bluetooth-enabled portable guides, they recognize the visitor’s position and trigger audio commentaries, display additional information about the observed artwork, and bring expositions to life with interactive content, rich media, and quizzes. NYC Brooklyn Museum, Kew Gardens in London, or The Museum of the Second World War in Gdansk—they all take advantage of location-based interactivity to engage visitors and make their stay worthwhile.

Airport Beacons Make Travelers’ Life Easier

Other common use cases for beacons in travel and hospitality are airports, which leverage the technology to ensure a smooth experience for passengers from the moment they enter the building through check-in to departure.

Considering the increasing airport congestion, managers are in a tight spot, struggling to maintain a consistent level of passenger safety and convenience. As passenger numbers continue to rise, streamlining the travel experience for air travelers is becoming a great challenge for airport executives.

Airports can tackle these challenges with the help of beacon technology. The real-time and historical passenger data collected through beacons allow airports to manage wait times better and keep passengers’ informed.

Miami International Airport is the pioneer of beacon-based airport services in the U.S. The airport was one of the first to install a few hundred devices in different locations, and launch a mobile app that updates travelers about flight schedules, directions, and places of interest, also offering commercial services such as retail discounts or parking bookings.

Singapore Changi Airport, one of the world’s most advanced airports, is another prominent example of a forward-looking facility leveraging beacons. Similarly to Miami, it uses beacons to interact with visitors, facilitate navigation and wayfinding, streamline baggage collection, and push notifications about the distance to gates, wait times, and other important metrics.

Proximity Marketing Beacons for Real Estate

An interesting example of an industry that is making strides in the adoption of beacon-based proximity marketing is real estate. Even though conventional advertising methods like billboards, trade shows, or flyers are still holding strong in this business, the industry leaders are looking for new ways of getting more eyeballs on their offers.

In the setting where customers demonstrate a strong preference for rich interactive content and visualization, beacons are poised to make a significant contribution. Real estate professionals use them to drive greater customer engagement with rich media campaigns and location-based offerings, and employ various retargeting tactics to sway hesitant buyers.

Imagine you’re a realtor rushing to close the next sale. To book more visits and arouse greater interest in your property, you may position a few beacons inside and push notifications to passers-by within a distance of a few hundred feet from the house. That’s what a Dutch real estate agency, Makelaardij Hoekstra, does to outpace its competitors and get first to the clients with the relevant, on-time offering. A French real estate service A Vendre, A Louer similarly uses beacons to tap on all users near the property who recently have been searching for properties to rent or sell.

Beacons can also be leveraged to get maximum footfall for open houses. Just install a couple of these a few weeks before the event, and start sending out notifications to people in the neighborhood. By doing so, you are likely to attract more viewers to see the house, thus increasing the likelihood of a profitable sale.

Push alerts exploiting beacon technology are also a great tool to give potential homebuyers a little nudge when they’re hesitating over a purchase. As they are touring the property, send them notifications about nearby schools, shops, parks, and other facilities that may provide an incentive for them to seal the deal.

Truly, the number of ways real estate software connected with beacons can be used by real estate agents and companies to create appeal is unlimited. It’s only up to realtors’ imagination how they are going to leverage the technology to buttress sales.

Conventional advertising like billboards, trade shows or flyers are still holding strong in real estate, but the industry leaders are looking at beacons to get more eyeballs on their offers.

How to Start With Beacons?

Beacon proximity marketing has already energized brick-and-mortar stores and shopping malls, and now it’s picking up the pace in other industries.

While most advanced beacons come with an integrated online platform for management, configuration, and maintenance, they still require some development work. If you’d like to step up your game and reach customers in a personalized and exciting way, get in touch with our team.