Target is Targeting Mobile Shoppers with Beacons

From TechCrunch this morning:

Target, the second largest general merchandise retailer in the U.S., announced this morning that it will start testing beacon technology in 50 of its stores nationwide. With beacon technology, the company says it will be able to send information about deals as well as recommendations directly to consumers’ smartphones, provided they opt in to receive these alerts.

It will be very interesting to see how this pans out.

On the one hand, retailers have to do something to engage their consumers on mobile in-store. Consumers can easily use mobile phones to compare prices from thousands of merchants on virtually any item in the retail space. Left to their own devices, consumers will likely do just that, so Target’s experiment is a logical reaction: give the consumer something else to engage with in-store besides price comparison apps or 3rd party review sites.

On the other hand, it still remains to be proven whether beacon technology is going to be the silver bullet retailers are hoping for. From what I understand, users have to a) download the Target app, b) opt-in to receive alerts, c) enable the app to run in the background in order to d) receive in-store alerts. There is value to the shopper, but the question is whether that perceived value outweighs the friction inherent to the overall process. One has to wonder if ultimately these efforts will ever reach a meaningful share of Target’s in-store audience. Maybe this will pan out because the users likely to engage with this technology will be the “whales” (eg the 5% of shoppers that drive 20% of the sales).

At the end of the day, it’s great to see Target experiment with these technologies. Properly blended into the overall consumer journey with solid digital strategies to engage new and existing consumers outside of the store, beacons could be an important piece of the puzzle for retailers.