Personalization is the key to driving loyalty, yet retailers still struggle to make a one-on-one connection with their most valuable store-level shoppers. The addition of beacon technology for retail programs is changing this paradigm by driving a new level of customer engagement through personalization — a move that creates a valuable loyalty proposition in an omnichannel retail model.

In-store personalization has been a longtime goal for retailers industry-wide. While progress has been made, efforts often still miss the mark. According to research from beacon marketing platform provider Swirl Networks presented by FierceRetail, only 25 percent of consumers believe that brick-and-mortar retailers regularly demonstrate an understanding of their individual preferences.

This indicates that while retailers are eager to earn shoppers’ loyalty, the inability to connect with shoppers on an individual level makes it difficult for brands to close the communication gap. It’s exactly this dilemma that makes beacon technology such a powerful option. However, there are a number of steps to take before getting a beacon program underway.

Delving into Data

As consumers’ infatuation with mobile solutions continues to rise, customer engagement — and personalization — is attracting renewed focus. But focusing on devices alone will not be enough to keep brands a step ahead of the competition. The clear winners will be those retailers that can truly understand their customers’ needs, and use these insights (via messages) to drive value throughout their purchase journeys.

As retailers decipher how to connect with shoppers while they’re making purchase decisions, more are eager to harness the power of consumer smartphones. Within five years, 53 percent of retailers plan to begin identifying customers via smartphones when they walk into the store — this is a significant jump from the six percent of companies currently utilizing this technology, as discussed in a session conducted by Boston Retail Partners at Shop.org’s 2015 Digital Summit in Philadelphia.

With a plan in place, retailers must determine how to create more specific, targeted messages that not only increase levels of customer engagement but also deliver a call to action to the shopper. By leveraging collected shopper data, retailers are laying the groundwork for the next stage of personalization. In fact, 22 percent of consumers are happy to share some data in return for a more personalized customer service or product, according to a 2015 report from Deloitte. Once this information is in hand, retailers can jump-start personalization efforts with beacon technology.

Harnessing the Power of Beacons

At the size of a quarter, beacons are low-power, microlocation gadgets that use Bluetooth technology to transmit signals to mobile devices. By combining the technology with smart devices’ integrated geolocation technology, retailers can use beacons to deliver real-time, one-to-one personalized digital service to shoppers as they navigate through store aisles or promotional displays.

Beacons are such a powerful engagement tool that 70 percent of companies plan to add the functionality over the next five years, according to data shared during Boston Retail Partners’ session.

Unwilling to wait, GameStop is already exploring the power of beacons. In September 2014, GameStop added up to 14 beacons at approximately 40 locations across its test markets in Austin and College Station, Texas, according to a company statement. Deployed in dedicated store zones separated by product categories, the beacons require shoppers to move smartphones close to devices installed on store shelving. The technology delivers shoppers real-time, customized offers via the retailer’s app.

“Digitization of the physical retail space has always been a top priority of GTI,” says Charlie Larkin, senior director of technology innovation at GameStop, in the press release. “Learning from our initial deployment of the iBeacon platform, there are numerous ways to leverage the emerging technology to deliver a next-generation shopping experience.”

As customer loyalty becomes increasingly hard to cultivate in an omnichannel world, retailers need to find a new way to connect with shoppers. By using beacon technology for retail to personalize the shopping experience, brick-and-mortar stores are driving customer engagement to turn shoppers into loyal brand advocates.