Now-desolate, once-bustling shopping malls now feel like the norm. But the age of the sprawling shopping mall may soon get a new lease of life, thanks to beacons.
Beacon technology, which is used by retailers to ping promotional messages to customers’ smartphones, is being incorporated into shopping malls. The beacons are used to ping shoppers with promotions and discounts and help retailers get a grasp on who’s shopping and how often, and improve customer experience. And as the technology gains traction, more features could be on their way to digitizing the in-mall landscape.
Last August, Mobiquity Networks, a mall-based beacon network, partnered with Simon Malls to bring beacons into the common areas of shopping centers. There are currently 240 malls with beacons, meaning promotions, notifications and consumer data is being transmitted to and from retailers and Bluetooth. (Learn more about how in-store beacons work here.)
Beacons saw a steady climb in 2014. Beacon platform Shopkick announced in October that their beacon technology helped raise $1 billion in revenue for their retail partners, which include Macy’s, Best Buy, Target and Old Navy, and the beacon industry expects 2015 to be an even bigger year.
As Mobiquity and Simon work to roll out beacon networks in more shopping malls, and individual retailers join beacon platforms, customers can expect in-store shopping to change with the tides.
Here are three expectations we have for the beacon-powered future of shopping malls.
A major benefit of in-store beacons is the ability to push out promotions and discounts via mobile when customers are most likely to use them.
According to Rebecca Schuette, director of communications at beacon platform Swirl, the promotions must be relevant and useful – not spammy – in order to register with the customer. “Shoppers are open to working this way if the messages are smart and valuable to their overall store experience,” she said.
While this strategy helps drive the in-store customer to the cash register, shopping center beacon networks, like Mobiquity, are figuring out how to drive the wandering customer into a certain store. According to Jim Meckley, Mobiquity’s CMO, that could soon mean beacon pop-ups in malls that will only unveil a pending offer if a customer visits a certain store. Once the customer enters that store, the promotion will appear.
“Our goal is to capture that common area shopper. People who visit the mall today tend to be much more targeted shoppers, as the number of stores they visit has decreased,” said Meckley. “We want to tap the customer on the shoulder and influence them while they’re near a store, but not necessarily inside.”
But brand loyalty is a big contributing factor to beacons’ success, and as Jonathan Greene, vp and managing director at R/GA, points out, there’s no mall equivalent of that loyalty.
“The main challenge is going to be getting a consumer to have an interest with the mall, versus the store that they care about,” said Greene. “If your phone buzzes in a corridor in a less-than-helpful way, that will get annoying and old pretty quickly.”
Optimized customer service
But beacons don’t just shoot out discounts. The data they gather from consumer tendencies helps retailers figure out where their customers are spending the most time, how they’re navigating store layouts, and how frequently they’re visiting. This information can let a retailer better staff the store across departments, and make displays more engaging.
“Retailers can engage customers, and make the experience better in-store,” said Chetan Ghai, chief product officer at ShopperTrak, a retail solution that tracks consumer habits and frequency. This week, ShopperTrak announced a partnership with Shopkick, connecting their retail clients to their customers with shopBeacon, Shopkick’s beacon network.
According to Margot Langsdorf, vp of client services at Shopkick, the partnership will help scale shopBeacon in stores. “The entire mall community can be lit up,” she said, leading to smarter customer service habits across the board.
Beacons can also help retailers identify their high-value shoppers and first time visitors, insight that Greene said is useful for brands.
“They might recognize me for who I am, which is a big challenge for retail,” said Greene. “At the shopping mall level, it’s also a way to help me discover a new brand.”
As beacon networks move into shopping malls, more aspects of the experience are set to go digital. Thanks to your smartphone, for instance, you could become a walking hotspot for advertisements: Meckley foresees personalized digital ad screens coming to shopping malls.
Similar to personalized ads on Facebook, digital ad screens will be able to pick up your shopping habits from your smartphone and switch gears to something more likely to pique your interest. Spend a lot of time at H&M? The retailer’s promo screen could pop up as you get closer, then flip to something promoting the Apple store as a more tech-minded shopper approaches.
“That’s where the industry is aspiring to go,” said Meckley. “It’s not all there yet. People are experimenting, and that’s what it’s going to take for retail to really utilize the technology on a big scale and achieve the results.”
Greene said that the technology exists, but for shopping malls to become beacon networks, they have to figure out how to unite into one overall brand.
“It all comes down to execution: how overt intentions are and how clear the use of data is. That’s critical,” said Greene. “It takes a lot of effort to execute. The first time you get an irrelevant message, you’re likely to opt out.”
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