In a world that seems to be increasingly awash with online-only ecommerce, it’s always reassuring when we see traditional retailers utilizing technology to push back.

Beacons perhaps represent the most important of all new mobile technologies that have emerged to help traditional retailers win back sales – and no store is more convinced of their power than US drugstore chain Rite Aid.

In January 2016, Rite Aid rolled out proximity beacons in all of its 4,500 stores across the US in a move lauded as the largest installment to date for beacon technology in a retail setting (a bragging right previously held by Macy’s).

Rite Aid’s beacon program was formed in partnership with mobile shopper marketing firm inMarket, which manufactures its own securitized Bluetooth beacons for iOS and Android. Indeed, much of inMarket’s penetration within the beacon movement has come from partnerships the firm has formed with bricks-and-mortar retailers, which it helps to “beaconize” their existing apps in order that they may communicate with proximity devices.

And this is great news for Rite Aid – as it is for all of inMarket’s partners and clients. inMarket claims to have more than 42 million active monthly users in its beacon program. Rite Aid, by association, gains access to those 42 million users, on top of the users who run its own namesake mobile application.

"Beacons on their own require apps to listen for them – otherwise they don't do anything," inMarket communications director Dave Heinzinger told ZDNet. "Our strategy has been to build out relationships with apps that people already use, rather than try to reinvent the wheel and get people to download something new."

The Beauty Of Beacons

Beacon technology is unique in the fact that it delivers ecommerce-style personalization to in-store customers. Much like a website will optimize itself based on browsing history, beacon-level proximity data gives traditional retailers the targeting and personalization capabilities previously only enjoyed by ecommerce sellers. The beacons themselves are relatively cheap pieces of hardware, which, as such, has seen hundreds of retailers experiment with them in stores over the past couple of years.

But how effective is beacon technology?

Well, “very”, would be the short answer. In 2015 the value of in-store retail sales directly influenced by beacon-triggered messages in the US was $4.1 billion.

Extraordinarily, however, a $40 billion increase is expected in 2016, with research from Statista suggesting that beacon messages in the US will trigger sales worth $44.4 billion before the year is out.

Value of in-store retail sales influenced by beacon-triggered messages in the United States in 2015 and 2016 (in billion U.S. dollars)

Beacons work by communicating with smartphone apps via a Bluetooth signal in-store. In the main, they deliver personalized messages to customers as push notifications when browsing around a store. The messages can include offers, promotions and product information, and the technology is also used to incorporate and activate coupons and loyalty rewards, as well as for customer data collection.

Rite Aid’s Beacon Strategy

What’s interesting about the Rite Aid app roach to beacons is the retailer’s measured focus of creating a balance between simply selling more products and improving the whole in-store shopping experience for Rite Aid’s customers.

This approach is due, in part, to the fact that the majority of Rite Aid’s customer-base falls into age brackets whose years are more advanced than those of Millennials – i.e. the group which tends to be more open to IoT (Internet of Things) technology such as beacons. This means that there is a pressing need for Rite Aid to educate its customers about the benefits not only of beacons, but of downloading and using the Rite Aid app itself in the first place.

“Ultimately, the message we have to give people is that there is a benefit from using the app and receiving beacon-triggered messages; we’re not looking to sell them things,” said Gerard Babitts, the chain’s senior director of digital marketing, during a panel session at Toshiba’s RISE (Retail Innovation & Shopper Expertise) Symposium. “That said, we’re focused on targeted advertising and targeted offers to people as part of our loyalty programs. So our ability to message people as they walk through the store is a real benefit for our shoppers.”

“It’s not necessarily about teaching the consumer what a beacon is or what the technology is,” added Kevin Hunter, president of inMarket, who was also present on the panel. “It’s about the engagement that happens. And that engagement happens through natural interest that’s driven by native content. When it doesn’t have that component, that’s when the engagement fails. The consumer has to welcome the content and messaging that happens to be delivered by the technology.”

Final Word – Winning The App Race

Rite Aid’s absolute roll-out of beacons is all part of its wider campaign to drive downloads and usage of the retailer’s app. As Babbitts sees it, Rite Aid is not just in an app race against rival drugstore chains, but the whole of the app store.

Speaking to GeoMarketing, Babbitts explained what he meant by this:

“My perception is that we only have so much room for apps on our phones. We don’t differentiate between certain apps that offer a poor experience, but try to entice usage with discounts. We look to beautiful experiences, whether it’s Uber or The Weather Channel. You can rattle off your own personal favorites. The point is, that’s what we see ourselves competing against; it’s not just other pharmacy brands or just in the health/wellness category.

“I can be very important to my customer if I offer a great experience,” he added. “If I don’t offer an attractive experience, it doesn’t matter that we’re a great brand in general. That identity has to translate well to the consumer. Our app strategy is based on offering solutions, services, and content based on what kind of customer they are.”

Rather than just being another retailer jumping on the beacon bandwagon, or indeed trying to make the headlines with the “largest roll-out of beacon technology in retailer history”, Babbitts says that Rite Aid’s proximity program is a very considered part of the retailer’s broader efforts to engage with its customers. The last word goes to him:

“We just see a great upside in using beacons to enrich the one-to-one experience with our customers. And if they’re in our stores, our customers don’t browse: they are very purposeful about what they want. The dwell time isn’t that great and it’s not the point. When someone is in our store, we want to make it as great an experience as possible, which means getting them directly what they want as quickly as possible. Beacons can help us do that.”

About John Waldron: John Waldron is a technology and business writer for markITwrite digital content agency, based in Cornwall, UK. He writes regularly across all aspects of marketing and tech, including SEO, social media, FinTech, IoT, apps and software development.