Beacons’ Killer App

August began with a big bet on beacons by Target, just one of many retailers that have made similar bets in the last 24 months. Macy’s, Lord & Taylor, Major League Baseball, Apple Store, SXSW — and that’s just a very short list of some well-known names that have incorporated the low-cost, low-energy Bluetooth or wireless-based tech that makes any smartphone holder in a small radius a mere ping away.

So, while there is no shortage of the “undeniably bright future of beacons” Kool-Aid available for the drinking, beacons have been getting something of a bum rap lately.

Forbes contributor Gene Marks, for example, thinks retail beacons at Target (and Macy’s and Lord & Taylor) are doomed to utter failure in the way they are currently conceived.

“We grudgingly give up our private information to make payments easier, and we’ll let a satellite orbiting somewhere overhead know where we are if it can help give us directions to get out of a traffic jam. But being tracked around the inside of a store like we’re mice in some kind of a neuropsychological testing maze is a little much,” Marks noted, before further complaining that a more personalized experience actually makes the problem worse.

“And even being served up suggestions based on our prior buying activity will be off-putting and invasive to many. Do I need to be reminded of that bag of chocolate I bought at Target last month in a state of hunger and depression?”

Maybe Marks was having a bad day, but Brandy Betz at The Motley Fool asked recently if beacons were ultimately “cool or creepy?” Money's Brad Tuttle answered Betz’s question with the headline to his piece on beacons with a resounding “creepy.”

PYMNTS comes neither to praise nor bury beacons. The ultimate decision on whether the tech will revolutionize the commerce landscape will be made by consumers who are on the receiving end of an experience that is awesome or awful, not commentators. Still, given the sudden and emerging consensus that beacons may just be too creepy for prime time (or retail reinvention), we thought we might take a quick look at where beacons are already working and adding to the bottom line.

Taking Off In Airports

Currently, only about 9 percent of airlines are using beacon tech in any way, according to SITA. But that number is set to increase fairly rapidly over the next three years.

“With beacons, airlines can easily provide passengers with indoor directions, walk times to gates, lounge access and alerts about boarding,” SITA noted. “Knowing where a passenger is before sending information enables more effective communication.”

Which is probably why 44 percent of airlines plan to make beacon upgrades by 2018, according to the aviation technology firm’s survey data.

And as the number of users is expanding so are the types of uses, with airlines being able to expand their beacon offerings to guide passengers to lounges, baggage collection or duty-free shopping, as appropriate.

Airlines are not the only interested party using beacons to positive effect. Airports themselves are getting increasingly integrated with beacons — particularly large internationals. In the last year and a half, beacon upgrades have cropped up at major airports around the world — mostly in ways designed to take away the pain points that everyone, everywhere hates about air travel.

For example, New York's JFK Airport is using beacon technology to display accurate wait times at security lines by tracking the movement of passengers' phones.

The BlipTrack system is enabled by wireless beacons located in the airport that monitor passengers' phones anonymously. When the devices go through lines, the beacon records, encrypts and timestamps the phone’s location. The system uses that data to calculate wait times from different positions in the line, which are then displayed on screens for waiting passengers. Airports in Toronto, Dublin, Amsterdam, Barcelona, Dubai and Kentucky, among others, are already using this system.

In Hong Kong the beacon system can beam directions, walk times to gates, lounge access and alerts about boarding all to a traveler's phone. The airport is also currently testing interactive maps to guide passengers along typical pathways within the structure.

Airports are almost by definition unfamiliar environments for most of the people inside them — which means, in an air travel hub, well-deployed beacons fulfill an almost universal need by making an unfamiliar place instantly navigable.

And with the push to duty-free shopping, as more airlines become meccas for physical retail sold at full price, beacons might add more direction to the bottom line of both retailers and airports.

Helping Hospitality Be More Welcoming

Making the unfamiliar instantly familiar is also a common theme at hotels. Big names — such as The James Hotels, Marriott, Starwood and, most recently, Hilton — have all started enhancing their customer service using beacons.

“People have been calling it a ‘concierge on their phone,’ and I think that’s how we’re starting to think about this and what the possibilities really are for this program,” said Sarah Bradley, director of Marriott Rewards digital strategy, about Marriott’s beacon-based LocalPerks program.

“Going forward, we’ll layer in all types of personalization. We can push you an offer, say, because you’re an Elite Marriott Rewards member, and we know you really love this one restaurant, and you’re near that restaurant, so we can send you a very targeted offer. That’s the journey going forward. That’s where we’d like to get to.”

Starwood’s program, on the other hand, is aimed at making it more convenient for consumers to access amenities like their room, without having to keep track of a hotel key. Initially developed for iPhone users, the hotel’s system uses Bluetooth proximity keys to open hotel door locks. The program later grew to include Android phone users as well.

"We believe this will become the new standard for how people will want to enter a hotel. It may be a novelty at first, but we think it will become table stakes for managing a hotel." Starwood CEO Frits van Paasschen told The Wall Street Journal.

There are challenges. Most of the hospitality firms interviewed are testing beacon tech out in limited waves and usually for the same reason — there remains some uncertainty about how to physically use the technology.

“From a pure implementation point of view, we are still learning how not to place them too close to each other so they don't start cancelling each other out,” noted Bradley.

However, the reports have been mostly positive on the consumer end — hence most brands plan to roll on with their deployment.

Consumers don’t like applications that are creepy, but as the travel industry indicates, consumers don’t necessarily find the idea they are being tracked necessarily creepy. When it serves a clear aim like getting them to their gate or unlocking their hotel room, they even seem to rather like it.

The message for retailers probably shouldn’t be to fear beacons but instead to find a way to use them that solves an actual consumer problem. Consumers don’t mind being watched; they just like knowing there is a payoff for them in the end.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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