iBeacons and the future of retail shopping: Consumers are ready, but are retailers?

Hilmi Ozguc is the CEO of Swirl.

No matter where or when you visit a store these days, chances are you’ll see someone deeply engaged with their mobile device while they browse a retail display or product assortment. According to research commissioned by Google, 84 percent of smartphone shoppers use their mobile devices to help them shop while in a physical retail store, and almost half of them use mobile for at least 15 minutes per store visit.

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Today, consumers are doing most of the work in seeking out this digital content to supplement their shopping experience, accessing third-party sites and apps in search of advice, product reviews, offers, or price comparisons. But thanks to iBeacon technology, that’s about to change.

With this new capability that allows retailers to understand the precise location of a shopper within a store, they can now provide highly relevant messages, content, and offers to smartphone users at the exact time and place they are most useful.

In order to understand consumer readiness for this new technology, Swirl commissioned independent research firm ResearchNow to study the mobile and shopping preferences of 1,000 smartphone owners.*

The results provide some key insights for retailers looking to capitalize on this opportunity.

For example, the study found that significantly more consumers would like to learn about store products and promotions from their smartphone (65 percent) than from a sales associate (38 percent).

Here are some of the other interesting findings:

1. Consumers are primed for in-store mobile alerts. Sixty-seven percent of consumers reported that they have received shopping-related push notifications on their smartphones in the past six months. Of those, 81 percent said that they read or open these alerts most of the time, and 79 percent have made a purchase as a result. For time or location-sensitive messages, mobile has quickly become an effective communication channel for retailers and consumers.
   
2. BUT, retailers must ensure that mobile content is relevant and valuable. When asked what caused them to ignore mobile push notifications, 41 percent of consumers said they were not relevant to their interests or location, 37 percent stated the alerts did not provide enough value, 16 percent thought they were annoying, and six percent did not opt in to receive them. With its time- and location-awareness capability, iBeacon technology provides retailers with the power to deliver highly relevant digital content and offers that can be used to create truly personalized shopping experiences, which will be essential to winning consumers over.
   
3. Shoppers will share their location with retailers – as long as they get value in return. Privacy remains an ongoing concern for consumers, especially when it comes to disclosing their smartphone’s location. The good news is that 77 percent of consumers said they would be willing to share their location information, as long as they received enough value in return. What’s more, when asked whom they would trust with their smartphone’s location data, 65 percent said their favorite retailer. By comparison, 45 percent would trust a shopping/deals app, 42 percent would trust Google, and 37 percent would trust a social app like Facebook. It’s clear that retailers have earned the trust of shoppers. Maintaining that trust in an iBeacon world will require them to obtain consumer consent for location sharing and clearly demonstrate value from using that information.
   
4. iBeacon technology can turbocharge retailer mobile apps: The good news for retailers looking to increase activation and consumer engagement with their mobile apps is that 80 percent of consumers said they would use retailer apps more often while shopping in a store if those apps delivered sales and promotion alerts. And 62 percent said they would use retailer apps more often in-store if they provided content that was more relevant to their interests and location. With the time and location context that iBeacon technology provides, retailers can transform their mobile apps into indispensable in-store shopping companions that deliver incredibly relevant and timely digital content.

There is no doubt that 2014 will be the year of the beacon in retail. While early pioneers have already emerged, many other retailers are now eagerly experimenting with the technology. This research shows that consumers are ready to interact with retailers through their smartphones. Beacon-triggered in-store mobile marketing offers a tremendous opportunity to enhance the in-store experience, but in order to succeed, retailers will need to create experiences that truly engage and add value for shoppers. The technology is here and consumers are ready, now it’s up to retailers to make it happen.

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*The study was conducted in November 2013 and the margin of error is +/- 3 percent.

Hilmi Ozguc is the CEO of Swirl, an iBeacon marketing platform provider.