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How to design a beacon technology solution for retail in 4 steps

Balázs Bakos
July 9, 2018

More and more retailers are using beacons to improve customer engagement and increase sales. Research shows that  75% of the top 20 U.S. retailers have implemented proximity technology. If you’re a retailer, proximity is probably on your innovation roadmap. So how do you move your proximity idea off the roadmap and design a great solution that delivers tangible benefits?

Step 1: Understand the technology

On a basic level, beacons are little devices placed strategically around the store. Like little lighthouses, they emit a signal that nearby devices (mobile phones for example, or receivers placed on ceilings) can detect. They can be attached to a place, like a supermarket aisle, or an object, like an expensive watch or a shopping trolley.

For examples of beacon solutions in use, check out part 1 of this series, '5 ways retailers are using beacons to create innovative customer experiences’.

Step 2: Have clear objectives

What is the business outcome that you’d like to achieve? Increase sales through product promotions? Collect data on customer movements in-store? Improve the placement of high-margin items? Your problem will be specific to your business. Starting out with a genuine need will ensure that your efforts achieve the greatest success.

Understanding your target outcome helps you design a better beacon system to realise it. Even if your objectives are exploratory - you want to use beacons to collect data that can be later analysed for trends - you should identify in advance what these trends might be.

If you’re placing beacons on shopping trolleys to detect customer movements in store, your objectives might be to see which areas of the store are most used, or what routes through the store customers follow. You may want to detect ‘dwell areas’ or ‘dark spots’. Understanding the objectives will help you and your technology partner to work together to set up a system that meets your needs.

Step 3: Research and prototype

Next you’ll need to understand the context for design. Who are the users? If your solution will be used by staff in the stores, interview them to find out what technology they’re using already and how they analyse stock and customer demand. If you’re planning to connect to customers through a store loyalty app, find out how many of them are using the app and have location services enabled.

Visiting stores will be essential to determine technical opportunities and constraints. Beacon receivers need to be placed up high, relatively clear of obstruction. If this set-up is not possible, a work-around will have to be implemented.

Are you planning to place beacons on trolleys to understand customer movements? Observe what happens to trolleys when not in use. Is their location fixed? Making these observations at the start is an effective way of identifying issues that could be costly to navigate after your technology has been built.

The next step is to create a prototype or proof of concept. Place a few beacons in one store to see how it works. Find out what’s not working and fix it before you invest further.

Step 4: Measure, analyse, repeat.

Roll out your solution in stages. Measure how well it’s working and analyse how well it’s meeting the initial objectives that you defined. You’ll probably find something you’ll want to re-design, whether it’s placing the beacons in a different location or capturing a different type of data.

Conduct A/B tests by comparing two different setups to see which one is more successful at achieving your objectives. Measure, analyse and repeat. When you have something that really works, you’re ready to scale out your proximity solution to more stores.

An iterative, user centred design process will produce a successful outcome for your great ideas. If you want to incorporate proximity or beacon technology into your business strategy, we can create and design business applications that will position you as a key player in the retail market.