Digital Transactions Authoritative, insightful and timely information for payments professionals
We haven’t heard a whole lot lately about beacons, those small transmitters merchants were supposed to station in their stores to beam offers out to customers as they were passing by or browsing in the aisles. So we decided to run a story this month on the matter to see what’s up. Quite a bit, it turns out, and you can read all about it in “Why Beacons Beckon.”
Beacon technology combines geolocation—the science of pinpointing where people are, assuming they have a smart phone—with inducements to spend. And since smart phones are involved, anything that indicates retailers are installing beacons and using them to send offers to mobile apps ought to be good news for payments in general and mobile payments in particular.
Imagine the potential for any of the major mobile wallets, all of which are falling a bit short of setting the consumer world on fire, if they could enable users to receive an enticing offer for a product just as they’re nearing the store that has it in stock. Or just as they’re wending their way down the aisle where the merchandise is on display.
Even better are offers tailored by the merchant not only to the customer’s location but also to her interests, as indicated by the merchant’s analysis of the customer’s spending habits in that store or throughout the company’s chain. With third-party wallets like Android Pay, Apple Pay, or Samsung Pay, the potential could be even greater if those companies could aggregate data across their networks of merchants.
Little wonder major retailers like Target, Lord & Taylor, and Walgreens are either rolling out beacons or at least testing them, as our story documents. Macy’s is all in. It has put 4,000 beacons throughout its chain of more than 850 stores. Looking to stem consumer defection from shopping malls, mall operators are also leveraging the technology.
So are mobile-payments companies like LevelUp, and so are terminal makers like VeriFone, which will install beacons in its next generation of terminals so merchants will get them automatically.
Certainly, no single technology can cure all woes. Mobile wallets in particular have challenges that beacons don’t address, such as an acute shortage of locations equipped to run transactions on mobile apps and cashier confusion—still—about what wallets are and how they work. As of early 2016, between 1 million and 1.2 million locations were accepting payments via near-field communication, but probably 400,000 to 600,000 of these places were vending machines, according to researcher Phoenix Marketing International.
With the promise inherent in beacons, we might soon see more merchants beaming offers, and welcoming mobile wallets.
—John Stewart, Editor, john@digitaltransactions.net
