Bricks and mortar retailers have suffered in recent years as online retailers, freed from the constraints of paying large rents for high-street locations, have squeezed margins and lowered prices. They’re great for customers as they increase buying power but there are many ways in which online retailers can’t compete with traditional retail stores.

Physical stores are much easier to browse. You can take in whole sections of goods within a few seconds and let things catch your eye. They also allow you to buy something and have it instantly, which no amount of ‘expedited delivery’ will ever match.

Just as online retailers are constantly using technology to develop new ways to improve their offering, so physical retailers can do the same.

How does a Bluetooth beacon work? 

At their simplest, Bluetooth beacons are devices that broadcast a unique identifier that can be picked up by a receiver – usually a smartphone – which then performs some pre-defined action. The original beacons, such as the iBeacon from Apple, are one-way communicators and are therefore tied to a specific app. This is quite limiting, though in many applications it is all that is needed.

Newer systems, such as Google’s Eddystone, allow two-way communication, thus much richer applications and interactions. It allows the real world to benefit from some of the advantages of the internet such as access to customers’ previous data.

Bluetooth beacons in retail

Let’s take a walk through a Beacon-equipped shopping mall. You walk through the door and your phone, sensing the entry beacon, knows where you are. It might open a web browser with a map asking if you need help to find a store.

As you walk around, stores can send you offers enticing you in. Knowing that you usually grab a coffee at around midday, each coffee shop might try to entice you in with an offer, for example ‘free refill’ or ‘buy one coffee get a second half price’. Stores you’ve visited before can personalize this by knowing what you’ve ordered before and offer things such as ‘25% off your usual latte’ or ‘half price cake when you order a latte’.

This gives value to the customer by making them feel personally welcome and it also helps retailers upsell by combining offers of ‘things you usually buy’ with ‘things other people often buy’.

When a customer moves on, they become invisible until they return. To plug this gap, proximity solution providers can complete the picture.

Time to get physical

The physical web allows stores to get even smarter. Beacons can also access information about where you’ve been before in both the online and real worlds. In a similar way that you might see Facebook adverts for things you browsed on Amazon but didn’t purchase – so-called ‘retargeted advertising’ – so physical stores can say ‘hey, you looked at printers; we sell printers and right now you can get 10% off’.

If you enter a large grocery store, and you’ve previously input your shopping list, it could draw a personalized map outlining exactly where to go, whether there are any offers on your favorite brands, or which brands are cheapest to buy today.

Finally, you need to quench your thirst after a long day of shopping. You walk up to the machine but realize you don’t have any small change. But thanks to the physical web, the vending machine can still sell to you using a secure payment system via the web browser.

Because the physical web is more of a two-way interaction than standard beacons, it should help the whole beacon ecosystem to grow faster.

Issues to overcome

Privacy concerns, as well as some people just wanting to be left alone, mean that Beacon deployments should only add value to those who want it, not force it on those that don’t. Even for those who do opt-in, avoiding the temptation to present too much information – greetings, coupons, directions – at the customer that they simply turn off their smartphone will be an important hurdle to overcome.

“An incessant buzz rippled across our screens, with the app delivering a host of messages at location-specific intervals as we passed by our preferred shops,” said one reviewer of London’s Regent Street app. “We got an onslaught of messaging from Mango and a range of "sale now on" messages from the rest.”

If physical stores can improve their offering to make themselves smarter and much more appealing to those who prefer online shopping, then they are much more likely to thrive.

You’ve probably noticed offers for products you browsed but didn’t buy. This form of retargeted advertising is especially popular on Facebook right now. With the growing use of beacons, retargeted advertising is about to get physical.