It’s not about beacons. It’s about proximity

The new possibilities that beacons and proximity technology are ushering in are truly limitless. For the first time, businesses and brands can digitally communicate with their users based on their exact proximity to any place, or any object.

April 10, 2015

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First published in PerformanceIN

One must always be diligent in providing services that end users actually find of value. Early findings point to a five times increase in shopper interaction and an increase of in-store app usage of up to 16 times when proximity is used carefully and with tangible end user value, but at the same time we see them react negatively when pinged left and right.

Physical retail is struggling to compete against digital retail. With more stock, lower prices and no queues, more and more people are doing their shopping online. With proximity and beacon technology installed, physical retail can play on its strengths - that the customer can see, feel and try the products - while introducing many of the advantages of online retail. As an example, if a certain product is not in stock or you want another colour or size, a beacon can take you straight to the web shop to purchase it while you are still in-store. And since this customer dialogue is digital while in-store, physical retailers will increasingly have access to customer data similar to that which digital retailers have been utilising for quite some time now.

With the increased demand for proximity and beacon technology from retailers and brands around the world, we see a whole new industry emerging: The Proximity Industry. It is expected that by next year $40 billion in physical sales will be already be attributable to beacons and that by 2019, 60 million beacons will have been deployed, and with that the proximity industry will explode in size. There are about 200 companies offering proximity products globally today, and new ones are entering every week.

Context is king

More and more of online communications are placed on the basis of customer data. This is referred to as programmatic buying, and is a more efficient way to communicate than buying fixed placements in media A or media B. And this is also why TV and Cinema are now starting to experiment with programmatic buying.

One of the bigger limitations of working with targeted or programmatic communication today, most often in the form of ads, has been the disconnect between the physical and digital consumer. This is why marketers globally have labelled making this connection “the holy grail of marketing”. The physical consumer is today seen in-store (only) and greeted with mass communication like posters or

One obvious challenge is that the offline customer and the online customer might very well be the same one, resulting in inefficient spending from the advertiser (which typically is the retailer/brand themselves) and a substantial limitation in campaign possibilities. With proximity and beacon technology installed in more and more physical locations, offline data sets are available for the first time to online media globally.

Facilitating the bridge between offline and online data through proximity technology is of huge value in itself, but to truly fulfil the inherent value of proximity and the proximity industry we need a greater sense of offline profiles than the ones gathered within the silos at specific physical locations. We need to understand the customers’ journey across locations. Importantly, as with all usage of customer data, privacy must be core, and any

The full potential of proximity is not something any one of us can fully grasp yet, it is simply too early, but at Unacast we are certain that the creation of a network will be the catalyst to unleashing this potential. This is why we have teamed up with some of the most prominent PSPs globally and are together expanding the boundaries of proximity.