Beacons, Location, And Consumer Privacy

We are obsessed with beacons and 'iBeacon' today like we were with mobile apps in 2008. According to a recent Forrester survey of digital executives with responsibility for mobile within their companies, four percent are using beacons already, but an astounding 30 percent plan to use beacons in 2015. Retailers, hotels, banks, hospitals, and your local bagel shop all want to put beacons into their physical locations so that they know who is in their store, airport, branch, clinic or restaurant so they can personalize the experience.

But do consumers want these personalized experiences, particularly as they become increasingly aware of just how often and by whom they are being tracked? We do know that 23 percent of online consumers expect a mobile experience to change based on location, according to Forrester data. Further, consumers expect brands to use context to deliver both relevant and simplified experiences on mobile phones in their mobile moments. Personalized is a subset of relevant, but relevant can be very different ... and less creepy.

The problem is - too many brands want to know who is in the store, but lack a strategy to act on that information. Brands should develop a "local mobile" strategy to change the experience on a mobile device based on location rather than an beacon strategy or any other hardware-focused strategy. Brands should:

  1. Give consumers choice and control over sharing location. Don't overlook the option of consumers checking in or raising their hands virtually by scanning bar codes or engaging with content through NFC. The use of Wi-Fi, cellular networks and beacons to spy could be viewed as invisible and convenient. But that's a risky strategy that depends on third party permission from Apple, Google, or wireless service providers. And, you still need consumers to have WiFi or Bluetooth on, in addition to giving you permission,
  2. Develop a "local mobile" strategy. Your customer's location reveals a lot about her needs or motivations, allowing you to alter the experience depending on those factors. If a consumer is home, she may be planning a shopping trip. If she is in the store, she may need help finding a product or remembering to use a coupon. You can win, serve, and retain customers with even more sophistication if needs are revealed through digital plans (e.g., shopping lists, a flight, or registry look-up).
  3. Convey the value exchange. Tell your customers how you will use their location.
  4. Focus on "what services" you want to offer to customers in store based on observed location - and not personalization. These services don't have to be digital. This is less of an exercise in creepy CRM and more of an exercise in inferring needs or offering services based both the location of a customer and how you have classified them. Is the customer trusted? Is he or she a thief? Does the customer need help because he has been standing in the same spot for five minutes? Example actions might include:
  • Sending a sales person to help a stalled customer
  • Opening a locked case for a trusted, well known customer
  • Alerting security that a known shoplifter is in the store
  • Rearranging the layout of physical locations based on traffic patterns
  • Pushing out relevant content from ratings and reviews to offers
  • Add personalization once you have developed trust with the consumer.
  • Instrument your apps and mobile services with analytics. These are new experiences where best practices are not well documented or understood. You'll have to test and learn what works for your customers.