Beaconpalooza: Macy’s to Deploy iBeacons in All 4,000 Stores

Macy's appUsing Shopkick as its vendor Macy’s has decided to roll out iBeacons in all its 4,000 US locations. This follows a limited test of the technology 2013 and marks the largest retail beacon deployment to date.

The news appeared as part of a larger release about various “omnichannel” initiatives at Macy’s.

The beacon rollout cements the status of Bluetooth beacons (and iBeacon in particular) as the leading indoor location technology. Ideally, beacons are combined with other indoor technologies for a more complete solution.

There’s still widespread ignorance and misunderstanding about the limits and capabilities of beacons. I wrote a report about these issues earlier this year while I was at Opus Research.

For example, beacons currently cannot be used to identify precise user location and thus cannot be used for indoor navigation. (This may change in time.) Macy’s had previously worked with Meridian (now part of Aruba) using WiFi to provide that functionality in a couple of stores though its app. It’s not clear whether the Aruba relationship will continue.

While there are some limited indoor analytics that can be obtained from beacons, they’re not very rich or deep. Beacons merely broadcast messages/offers to nearby users who have relevant apps installed. An app is a prerequisite to receiving beacon-based notifications.

Here’s what Macy’s said in its press release about how it will work with Shopkick and iBeacon:

In what will be the largest implementation of iBeacon technology at retail stores to date with more than 4,000 devices, shopBeacons, an enhanced mobile location-based technology built upon Apple’s iBeacon Bluetooth Low Energy (BLE) protocol, will be placed within various departments at Macy’s locations, allowing for users of the shopkick app to get more personalized department-level deals, discounts, recommendations and rewards. Installation of shopBeacons is expected to be complete by early fall 2014, with activation beginning shortly thereafter.

Once live, as shoppers enter any Macy’s nationwide, shopBeacon will remind those shopkick app users who’ve opted in to receive notifications to open their app. During the initial phase of the program, customers will receive the currently available Macy’s promotions, deals or discounts. In early spring 2015, these Macy’s offers can be even more precisely tailored by departments in the store. This enhancement in Macy’s mobile technology arsenal will allow for increased consumer engagement and promotional and marketing relevancy that will benefit customers nationwide.

Macy’s is silent on whether the functionality will be integrated into the Macy’s own app, beyond the Shopkick app. I suspect the answer is yes over time.

One of the major challenges that individual retailers face with indoor location is getting users to download their apps. They haven’t done a good job to date giving users more than just a small-screen e-commerce experience. Thus a majority of smartphone owners currently don’t have retailer apps on their phones — despite the increasing time spent with apps.

Retail aggregators such as Shopkick or Retailmenot may thus turn out to be instrumental in the process of educating consumers about indoor location. Survey data have also shown that despite privacy fears, consumers will share location with marketers in exchange for tangible rewards and benefits (e.g., offers).

The Macy’s rollout is supposed to happen this year in time for holiday 2014. It’s smart for Macy’s to get ahead of the curve and learn how consumers interact with indoor location now for more effective marketing and a better customer experience tomorrow.

Perhaps most importantly, Macy’s move validates indoor location/beacons in a way that no other retail deployment has so far been able to do. Accordingly we should see an acceleration of indoor location adoption at national retailers over the next several quarters as they start to feel some competitive pressure.

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