Why retailers need not fear Amazon’s Fire Phone

After years of rumors and speculation, Amazon’s first smartphone, Fire, has arrived. While the device drew kudos for its 3D-like display and a bit of sticker shock for its $649 price tag, the killer feature by far is Firefly. Firefly lets the phone physically recognize more than 100 million products, allowing consumers to quickly identify and purchase everything from in-store products to digital music, TV shows and books, “on the fly.”

Articles and blogs have called Fire everything from a “showrooming nightmare” to “showrooming on steroids” and a “threat to retailers.” According to many, Firefly’s ability to connect the physical world to Amazon’s powerful e-commerce capabilities may spell disaster for brick-and-mortar retailers. But is all this doom and gloom really warranted?

[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":1506187,"post_type":"guest","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"big-data,business,enterprise,mobile,","session":"C"}']

Since the advent of the smartphone, retailers have been battling the specter of “showrooming.” And yet, despite worries that in-store shopping might never survive the onslaught of digital and mobile commerce, the reality is that more than 90 percent of all purchases still take place in traditional brick-and-mortar retail stores. Rather than fearing mobile, retailers are now embracing it as a tool to engage in-store shoppers and enhance the physical shopping experience.

The key driver behind the in-store mobile movement has been the introduction of Bluetooth® Smart and iBeacon technology. With this technology, and the marketing platforms that have been developed to take advantage of it, retailers have a powerful new way to deliver highly relevant content and offers to in-store shoppers at the “moment of truth,” when a consumer is making a specific purchase decision. Low cost beacons placed in key merchandising areas throughout a store can trigger the automatic delivery of branded content and personalized offers to shopper smartphones. Beacon proximity marketing is poised to have a much greater impact on retail businesses than the Amazon Fire phone. Here’s why:

1. Today, beacons and beacon marketing software technology work with hundreds of millions of iOS and Android devices already in the hands of shoppers. It will likely take many years for the Fire phone to build a user base of any significant size. Considering that iOS and Android devices dominate the U.S. smartphone industry with a market share of over 90 percent, there will be many more beacon-enabled phones than Amazon Fire phones in use for a long time to come.
2. The majority of national retailers are experimenting with beacons, and several pioneering retail brands like Alex and Ani, Timberland, and Kenneth Cole have already rolled them out in stores nationwide. It won’t be long before many other national retailers add in-store mobile features and services (triggered by beacons) that are available exclusively to iOS and Android device users. As more and more retailers outfit their stores with beacons (projected to reach 30 thousand locations by the end of the year according to ABI Research), and more consumers are able to access these services with retailer branded and third party mobile apps, the relative value of the Firefly feature becomes weaker.
3. The real power of beacons lies in their ability to help retailers enhance and personalize the in-store shopping experience. Beacons can be used to trigger the delivery of exclusive offers, reward program benefits, buying guides, and relevant in-store services, by simply walking into a store or a particular department. With beacon technology, shoppers (or sales associates) can instantly access saved shopping lists, store maps, purchase history, product reviews, inventory levels, and much more. These enhanced in-store experiences will have a powerful impact on shopper behavior, by shifting purchase decisions far beyond purely price-driven transactions.
4. One of the most valuable and unique features of iBeacon technology is its passive nature. Because mobile apps can monitor for Bluetooth signals in the background, shoppers don’t need to take any action (beyond an initial opt-in) in order to access beacon-triggered offers and features. By simply walking into (or dwelling in) a beacon broadcast area, shoppers can be automatically alerted to available content with a push notification. When used judiciously by retailers, this key feature will drive high rates of consumer awareness and engagement. In fact, some retailers have reported open rates as high as 75 percent for these in-store push notifications!

The introduction of Amazon’s Firefly feature is far from a death knell for brick and mortar retailers. It should, however, serve as a reminder and a call to arms for retailers to seriously evaluate how they are capitalizing on mobile technology to engage with in-store shoppers. Beacon proximity marketing provides an unprecedented opportunity for retailers to connect with consumers by allowing them to deliver incredibly relevant content and services at just the right time and place. With beacons, retailers have the ability to fight Fire with fire.

Hilmi Ozguc is founder and chief executive of Swirl, the leading enterprise-class iBeacon marketing platform provider.