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Hot Marketing Gadget: Does Your Business Need a Beacon?

By Adrienne Burke | Small Business

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When the team at BeaconStream offered to “answer Yahoo Small Business readers’ most commonly asked questions about beacon implementation,” I had just one: “What’s a beacon?”

BeaconStream CEO Venkat Nallapati spent an hour on the phone enlightening me about how retailers large and small around the world are beginning to use this not-so-new technology to increase customer traffic. The use of beacons is also on the rise in retail, travel, museums, airports, and real estate. Maybe I’m the last to know. But if beacons are news to you too, here’s how Nallapati explains it.

“Beacons aren’t new. They have been working for years, used mainly in black boxes such as in big aircrafts. The beacon has a strong frequency and transmits small packets of signals called pings. Today, as small devices can sense bluetooth signals, smartphones have become cheap and handy transmitters and beacons have come into commercial use.” 

Nallapati says, “A beacon is really just a small Bluetooth transmitter that works in the store environment; they cost about $25 a piece.” And, he says, the technology opens the door for any small business to operate as if it has an in-store network for a nominal investment. “The moment the customer who has the smartphone app walks through the door, the signal is received and sent to the cloud to pull content. The customer gets notified and receives content from the store,” he says.

For instance, “If you walk into a Macy’s store that has a Bluetooth device at the door with your phone’s Bluetooth turned on and Macy’s app installed, you will get content from the store,” he says.

What kind of content? Perhaps a notification that Prada handbags are marked down 10 percent, or that there is a sample giveaway at the Chanel counter. “The store can place beacons strategically,” Nallapati says. “If you’re shopping in handbags it can pull you into the makeup section.”

Macy’s, of course, has the in-house IT capacity to manage its own beacon notifications via the cloud. But for small retailers without the resources of a giant department store, Nallapati says his company offers something unique: an ecosystem that lets small businesses leverage beacons to deliver content to customers.

“It’s our own hardware and a cloud platform where small businesses can subscribe and upload the content—like using Youtube to play your own video,” he says. “It’s easy to implement, and lets a small business play the same game Macy’s does.”

And while it can be hard for a small retailer to persuade customers to install its unique app, using the BeaconStream ecosystem eliminates that issue by offering a single app that serves all stores in its network. If someone is walking within 10-50 feet from a store in the BeaconStream network, it can send a notification to say ‘we have nice deal going on.’ “Once they’re in your store, you can engage them in anything,” Nallapati says.

He says a few rechargeable beacons is all a small store will need along with a monthly subscription to the BeaconStream cloud system. $50 will get you 1,000 beacon notifications during the month.

Nallapati launched BeaconStream 18 months ago, and says in the U.S. market he’s not far enough along yet to “highlight the numbers.” But a global shopping mall management company is proving the concept at the Chennai City Center Mall in India, where a marquis advises shoppers to install the BeaconStream app in order to get notifications about deals at any of the mall’s stores.

In a country where homes are more likely to have several mobile phones than a single landline, Nallapati expects the technology to catch on quickly. “Southeast Asia is going to boom for us,” he says. And the U.S. will come around eventually too, he predicts.

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