Beacon Technology Drives Micro-location Mobile Marketing

September 12, 2016


One of the most popular trends in 2016 marketing is the use of micro-location mobile advertising, more commonly known as beacon technology. Most consumers know of this as specialty advertisements, which will pop on their mobile devices while in a retail location, such as a shopping mall or outlet center. Beacons are low-energy devices that are mounted within a store.

When a customer is within Bluetooth, WiFi, or GPS range, the beacon sends a piece of marketing to their phone or tablet. These have been especially valuable during holiday shopping when customer attention is its most valuable. For example, let's say you're walking through a mall, shopping for shoes as a gift. There are at least 20 stores competing for your shoe business, yet those with beacons can target you directly, offering a coupon or special promotion, hoping you select them over the competition.

However, direct response marketing isn't the only way micro-location mobile marketing is making a big impact in the retail world. Williamsburg, Brooklyn, is the home of retail giant Urban Outfitters' concept store Space Ninety, a place where new trends are tested before being launched nationwide. As customers walk through Space Ninety, beacons mounted throughout the store push guidance notifications out which help customers explore the latest and greatest items. The range of these devices can even be specified to specific areas, like the men's section or the fitting rooms. Social media applications are even inserted into the application, which allows customers to share photos of their new wardrobe online, giving instant word-of-mouth marketing of the latest trends. Since launching beacons in Space Ninety, the hash tag #UOonYou has been used over 55,000 times, helping Urban Outfitters expand their brand recognition with their target market.

Not since the arrival of credit card readers has in-store technology caught on this fast. The number of beacons installed in U.S. stores is set to reach 3.5 million by the end of the year (up from only 30,000 in 2014). Big name chains, such as Kenneth Cole, Macy's, Timberland, and Lord & Taylor are among the latest companies testing beacon technology. It's predicted that 85% of the top 100 retailers will be using micro-location mobile marketing by the end of the year. Part of the push for adoption is a staggering 60% to 70% aggregate engagement rate, well above the common 10% to 12% seen in other forms of mobile advertising. This engagement translates to a 30% to 35% conversion rate into a physical sale.

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