Technology Transformation in Retail – Part IV

For years now, many retail stores have gone through drastic technology transformations aiming to stay on foot. Big brands such as Walmart, Target, Macy’s and Amazon have heavily invested in technology solutions to fulfill the constant needs the modern customer requires.

This is the last of a 4 part series of articles about technology innovation in retail. In this series, we detail new trends and techniques being used by big players in the retail industry. You can check the other articles of this series in the links below:

• Part I: Machine Learning in Retail
• Part II: Face and Object Recognition in Retail
• Part III: Mobile Applications

What is a Beacon?

One technology that has been creating a buzz in the retail industry is the Beacon. Beacons are small battery-powered devices that can send short messages to smartphones, facilitating the advertisement of promotions and products in the store. They introduced a new concept called Proximity Marketing. These devices use the low-energy Bluetooth protocol (BLE) that easily penetrates walls and does not require a complex pairing procedure. Another common application of beacons is to detect the location of close-range devices, since they can be more precise than other methods, such as GPS. Many retail brands use beacons to monitor which areas of the store are the most accessed and for how long customers tend to remain there.

According to an article from 2014, over 70% of shoppers who received beacon-triggered content on their smartphone have increased their likelihood to make a purchase during a store visit. More than 60% of customers affirmed that they would do more holiday shopping at physical stores that could provide instant mobile content and offers while they are on-site. And 61% of people said they would simply visit a store more often if it offered beacon marketing campaigns.

In addition, beacons allow the creation of a monitoring environment; retail stores can acknowledge whenever a certain customer arrives in a store, which stores are the favorites of each customer, which kind of products each customer normally buys, and so on. This information is valuable to be used with machine learning solutions, aiming to predict the preference of each customer, providing suitable promotions, and improving customer experience.

How do Beacons work? Photo: Happiest Minds (2019).

State of the art

Many international retail companies, such as Macy’s, Walmart and Kenneth Cole, use beacons in their physical stores to communicate and track the location of customers inside the store. In Brazil, Magazine Luiza and Via Varejo are examples of companies that also use this technology.

Even though beacons already exist on the market for a while, it is still considered an innovative technology. Big tech companies, such as Google, have been heavily investing in beacon technology, especially with the recently released Eddystone, an open beacon communication format. The main idea from Google is to create smart-cities, where beacons could be interacting and learning from users in art museums, stadiums, bars, and restaurants, focusing on connecting people through communication patterns individually tailored for each one of them. This enormous compilation of data leads to an even greater improvement in retail since each user’s likes and dislikes would be known prior to providing suggestions, advertisements, and discounts.

Conclusion

This was the last part of our Technology Transformation in Retail series. Throughout this dive in the retail industry, we have learned that big companies have been gathering and processing massive amounts of data aiming to establish the most suitable approach to each user. Machine learning techniques have been used to improve recommendation processes, price optimizations, and even analyze the sentiment of a customer during the in-store visit.

Face and object recognition has allowed us to improve in-store security, providing more customizable adds, and increasing our overall in-store experience. Mobile applications have allowed retail companies to easily communicate with customers and provide reliable advertisements. And Beacons, being an accessible and popular technology, have been able to conveniently interact with customers, collecting valuable data for the retailers.

About the author

Marcelo is a Software Engineer at Poatek. He has a Master Degree in Computer Science in the area of Embedded and Digital Systems, focusing on Monitoring and Control of SDRAM Memory Accesses. Despite working mainly in C++ development, Marcelo holds a strong passion for other areas such as Blockchain and IoT.