While much of the buzz about beacons has been around pushing offers to shoppers, a new pilot program at Tesco gives marketers a better understanding of the full scope of the location-based technology’s capabilities.

The British retailer is piloting iBeacon in its Chelmsford location with a stand-alone iPhone application specific to the store’s location. Tesco’s pilot indicates that retailers solely focusing on beacon-triggered sales are missing out on a bigger opportunity with in-store customer service.

“Tesco’s strategy is unique as they are hyper-aware of not alienating their consumer base and wrapping the trial around a specific utility for consumers, such as notifying them when they arrive that pre-ordered goods are available for pick-up,” said Tom Edwards, senior vice president of digital strategy at The Marketing Arm, Dallas.

“A majority of the discussion has been around leveraging beacons as an extension of pushing messaging to consumers,” he said. “The reality is, the ideal experience needs to provide relevant value to the consumer versus simply pushing messaging.”

Mr. Edwards is not affiliated with Tesco. He commented based on his expertise on the subject.

Tesco confirmed to Mobile Commerce Daily that it was testing iBeacon, but declined to comment on the record about its initiatives.

Big-box beacons
Eventually, Tesco plans to roll out beacons throughout the store, but the test is initially only being used to trigger messages to consumers who are picking up an item in-store.

The idea is that if iBeacons are turned on within aisles and around merchandise initially, consumers may feel overwhelmed about the technology and immediately be turned off by it.

Instead, Tesco is using iBeacon to trigger a message to a consumer that is in-store to pick up an online or mobile order, which could prove to be effective way for the retailer to better sync up employees and shoppers.

“I like the Tesco application because it begins to think about the customers and employees to enable a more personalized and efficient shopping experience,” said Bret Cunningham, president of BestFit Mobile, Austin.

According to a report from Marketing, Tesco plans to build on its mobile initiatives in the next year with a vouchering effort.

The iBeacon technology is part of a bigger mobile push for Tesco to create a personalized shopping app that uses location to pinpoint the exact location of items in stores for consumers.

“Many retailers are focused on using beacons to deliver offers to consumers,” said Robbie Allan, vice president of marketing and sales at Carnival Mobile, New York. “Tesco is innovative in their use of beacons to smooth the check-out process.”

Tesco’s iPhone app

Different approaches?
Beacons have undoubtedly made a big splash for retailers with the introduction of Apple’s iBeacon technology last year, but it has yet to be seen how consumers will respond to interacting with beacons at a large scale.

A few big brands including Macy’s, Frank and Oak and American Eagle Outfitters have tested iBeacon, but the technology is likely too new to get an accurate understanding of how receptive consumers are to these location-based offers.

Apple is also testing the technology within its retail stores, but initial tests with iBeacon lacked some of the promised contextual messaging (see story).

What is interesting about Tesco’s iBeacon approach is that the focus is less on pushing offers and more on assisting consumers who have already made a purchase.

By slowly wading into location-based technology, Joseph Drambarean, director of mobile strategy at Punchkick Interactive, Chicago, believes that data will be key in how Tesco eventually rolls out iBeacon more broadly.

“By understanding consumer behavior, Tesco can see where customers are moving and where to trigger specific events,” he said. “For customer service, iBeacon will help with retention — it’s a passive indicator and allows more for more touch points to deliver relevant and personalized interaction when possible.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York