Why Target’s Beacon Strategy Is Doomed
(This post originally appeared on Forbes)
Earlier this month, Target TGT -4.14% announced that it will be testing beacons in 50 of its retail stores, joining other retailers including Macy’s and Lord & Taylor. Beacon technology is hot. The sensors, which mostly use Bluetooth Low Energy (BLE), transmits a low energy communications beam from a source to mobile devices or other receivers that are configured to recognize it. Almost one in five mobile marketers already are using Apple’s iBeacons, with that number projected to double to more than a third next year, based on a recent study. And more than 400 million beacons are expected to be sold by 2020, most of them in the non-retail world. But it’s the retailers, like Target, who are getting the most attention because their use of beacons affects us directly as consumers.
And unfortunately Target’s beacon strategy, like Macy’s and others, is doomed to fail.
Target’s plan is to allow consumers who have opted-in to receive targeted communications delivered directly to their Bluetooth-enabled mobile devices while inside stores with offers of deals and discounts. The information will be delivered through Target’s mobile app, which the user will need to download and sign-up. Macy’s is doing something similar at 4,000 of its stores but instead is partnering with mobile shopping app Shopkick to deliver their deals.
If you’re a small retailer, you’ll be deploying beacon technology sometime in the future too. But when you do, and before you start making the investment, just make sure to avoid the mistakes that Target and others are now making.
For example, don’t assume that your customers have the same agenda as you do. Target plans to deliver what are essentially ads for products directly to its customers’ smartphones. True, they’ll have opted-in for the service (at least just to try it). And maybe the messaging will eventually be smart enough to deliver promotions for items based on a customer’s actual purchasing history. But the typical customer doesn’t want ads. He doesn’t want to be a marketing target. He wants service. He wants information. And he wants to be in control of how he receives that information. For beacon technology to succeed, it should say to the customer: “hey, I’m here if you need me,” not “welcome back…now buy this product.” When integrated with a barcode app a customer should be able to find out more data about the product and the beacon can be relied on to connect the customer to data sources to answer questions and make recommendations and subtle suggestions based on other products currently in stock or where the customer is located.
Secondly, Target is assuming that we are using our smartphones more than we really are. Even though BLE takes little energy, just activating Bluetooth on a phone saps valuable battery life, which is why many of us keep it off until needed. Of course, shoppers are carrying around their smartphones, texting friends and families and checking the Internet. But when in-store they are there to shop, not stare at their smartphone. I’ve watched my wife stow away her phone just so that she can focus on that great pair of shoes or a dress she spotted. Shopping is itself a fun experience using most of our senses, smartphones not included. Zapping out advertisements takes something away from that experience. As mentioned above, a good retail app using beacon technology should be standing by to answer questions and make suggestions once the shopper asks for help, not before.
Finally, there’s are privacy concerns. And these will only grow. Being tracked around a store is, as one report described it “creepy.” 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. 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? Or that tennis racquet which I thought would be the solution to my (lack of) exercise woes that still sits inside my hall closet? Too much info.
Once retailers realize that beacon technology is better positioned as a customer service tool and not an advertising platform, they’ll see much higher acceptance and benefit from the data about their customers’ buying behaviors that they don’t currently have. And customers will enjoy their in-store experience more. Until this realization about beacon technology hits home, Target and other retailers are doomed to fail. And smart business owners should just stand by, watch, and learn from their mistakes.