Target is doing beacons, and so is Macys.
In fact, everyone seems to be using beacons to generate targeted offers for consumers (and gather copious amounts of data on them). Or are they? Some data suggests that while beacons have a lot of promise, they may not (yet) be living up to their hype.
Everyone is doing it...
Marketers seem to be jumping on the beacon bandwagon, with 54% reporting near-term plans to deploy them, according to a 2014 Mobile Benchmark Report by Adobe.
Though this sounds promising, a more recent eConsultancy and Adobe survey of over 6,000 enterprise marketers suggests that geo-location, and particularly beacons, are not yet much of a priority... at least, not compared with more basic foundational technologies like analytics, personalization, and messaging:
In fact, general interest in beacons seems to have peaked in late 2014, and they've been on a decline ever since, according to Google search trends.
This is also reflected in consumer awareness. Despite the privacy furor over the past few years, beacons—with their potential to seriously invade consumer privacy—have dwindled in consumer minds.
Hence, in 2014 a Harris poll found that 57% of smartphone owners were aware of in-store beacons, while 20% claimed to have used them.
A more recent First Insights survey, however, uncovered that 70% of consumers couldn't distinguish a beacon from a beaver, and a paltry 3.4% claim to have used one.
Of course, consumers aren't going to be the best judges of beacon adoption, because it's unlikely they'd know whether a beacon was behind that digital discount coupon that just found its way onto their device. The point, rather, is simply that interest in beacons has declined once the initial hoopla died down.
Why are you here?
There are significant problems with beacons. On the enterprise side, despite the hardware being cheap, beacons can become quite expensive in large format stores or offices, as one major US retailer told me.
Plus, this same retailer advised me that the company simply isn't ready to use beacons effectively. It turns out to be extraordinarily difficult to manage offers, in-store directions, and more on an individual store basis, given that inventory is in constant flux, among other things.
On the consumer side, beacons require a user to have a retailer's app or the app of a third-party partner of the retailer. Secondly, they require that users have Bluetooth turned on, something that battery-conscious consumers like me are reluctant to enable.
In other words, they require that users want the enterprise to talk to them, track them, etc.
This raises the obvious question: what's in it for the consumer?
In Target's roll-out of beacons to 50 test sites, the company plans to "send targeted content and offers to a shopper's smartphone based on their specific location and behavior within a store," as ZDNet reports. But for those of us who are still waiting to get even one targeted and useful ad on the web, there's reason to doubt that beacon-powered ads are going to be much better. (That said, some data from Ninth Decimal suggests beacons have had a significant impact on consumer product sales in 2014.)
And then, as Jack Wallen highlights, there's the security problem.
To date, enterprises have primarily thought of what beacons can do for them. To be successful, enterprises need to start developing uses for beacons that deliver significant consumer benefit, enough to overcome the inertia of having to download an app, enable Bluetooth, etc.
Target, for its part, is "developing additional uses for the beacons, including the ability to dynamically re-sort a shopping list as a customer moves through the store, similar to how a maps app re-routes drivers when they change course." This is the sort of thinking that's required.
Because until companies like Target deliver real consumer benefits, they're never going to get the location data they crave on their customers.
- Target launches new beacon program using a system in need of change
- 3 security challenges when deploying mobile apps
- 4 reasons cybersecurity now requires an analytics-driven strategy
- Hacking Team breach leads security researchers to unexpected insights
Matt is currently head of the developer ecosystem at Adobe. The views expressed are his own, not those of his employer.
Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.