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. Initially, the beacon technology will work with those users who have the latest version of the Target iPhone app installed on their phone and have Bluetooth turned on.
The app will then prompt customers to “opt in” to share their location with the retailer while in the store, and allow it to send push notifications to their phone. The company says that it will limit these notifications, so as not to overwhelm customers with alerts. There will only be two push notifications sent out per shopping trip.
The recommendations, meanwhile, may appear both as push alerts as well as in-app updates on the Target app’s “Target Run” page, which is designed like a social media news feed offering deals, product picks, top-pinned items from Pinterest, and more.
Target is initially testing the technology in 50 stores, in Chicago, Denver, Minneapolis, New York City, Pittsburgh, Portland, San Francisco and Seattle. The stores were chosen because they represented a good cross-section of stores in various markets, Target tells us. It will then continue to adapt and enhance the service based on consumer feedback and other data, and roll it out “broadly” to other stores later in the year, we’re told. (Android support is also in the works.)
A number of businesses in the retail industry have already begun to test beacon technology, which uses Bluetooth to connect with shoppers’ phones in close proximity, in their locations. For example, real estate developer Simon said last fall it would outfit nearly 240 malls and shopping centers with beacons, Macy’s in September also rolled out a sizable beacon installation involving 4,000 devices, GameStop said it would pilot both geo-fencing and beacons in 36 stores in Q2, and Lord & Taylor stores rolled out beacons last year, just to name a few.
For retailers, beacons allow retailers the opportunity for targeted marketing, waking up the apps installed on consumers’ phones in order to send them personalized messages. Consumers, so far, have been somewhat accepting of the technology, likely because they’re in better control of it – they can choose whether to opt in, or can simply switch off their Bluetooth to disable the alerts. According to a November 2014 study by marketing platform provider Swirl, 73 percent of consumers even indicated that beacon campaigns increased the likelihood of purchase during their visit.
In Target’s case, the company says that the technology will be used not only to trigger deal alerts like new offers from Cartwheel (its mobile couponing service), but also provide information and recommendations to shoppers, like an alert about what nearby apparel items are trending on Pinterest, for instance.
In a future release, Target will introduce other beacon-powered features, like the ability to re-sort your shopping list as you move through the store – similar to how mapping applications re-route you when you take a different direction. Another upcoming feature will allow shoppers to request help from Target staff right from their phone.
Target says that it does collect data from the mobile app to understand shopping trends and preferences, but the beacon data is specific to in-store location and will be used to enhance the shopping experience.
While there are several beacon hardware providers on the market today, including Estimote, BlueCats, Bluesense, Gimbal by Qualcomm, Gelo, and others, TechCrunch understands that Target is working with Estimote for its installations. Target wouldn’t confirm this, but says it’s working with a “handful” of vendors.