A Primer on Beacons and How Dealers Can Benefit From Them

By David Metter

As we head into 2016, one of the most exciting new technologies that some dealers are experimenting with are beacons. Beacons are small, inexpensive hardware devices that can be attached to a wall in the showroom or placed around a dealership's lot. Using Bluetooth technology, the beacon detects nearby smartphone devices and can send customers push notifications with a welcome message, mobile coupons, or promotional information. 

Beacons are already in use at several large retailers, such as Target, Macy's and Simon Mall Properties. Currently, beacons can only communicate with customers' smartphones via an app. For smaller retailers including auto dealers, this has presented a barrier to adoption because most stores don't have their own branded apps. However, the ability to tie beacon technology to Apple Wallet and Google Wallet changes this dynamic. If a consumer saves a dealership's event, loyalty card, or offer to their Wallet app, the dealership can use beacons to activate the app and send updated and relevant offers.

It's important to understand the difference between beacon marketing and location-based mobile marketing. Location-based marketing allows dealers to set up a "geofence" or perimeter size of their choice around their dealership. When smartphones with location services enabled cross the perimeter boundary, ads are displayed and messages can be sent to that consumer. Beacons are only used to target in-store customers.

One type of beacon technology is Visual Light Communications (VLC), a system that turns LED lights into beacons that can pinpoint consumer location with extreme accuracy. Any dealership that has indoor and outdoor LED lighting can implement VLC.

ByteLight is one brand of VLC that uses existing lighting infrastructure and Bluetooth Low Energy (BLE) to communicate with smartphones. As a customer moves through the showroom or across a lot, LEDs emit flickering light patterns undetectable to the human eye but visible to the customers' smartphone cameras or BLE sensors.

While a beacon device can tell you the area or aisle a customer is located, VLC is so exact it can tell you the exact product or vehicle the customer is standing next to. This allows you to send hyper-targeted messaging to every customer.

Another advantage of VLC technology compared to other types of beacons is that they draw their power from the lighting grid so they don't need batteries, which standalone beacon hardware devices require.

In retail automotive, a few early adopters are already experimenting with beacons on their lots. Although some retailers are a little apprehensive about the perception that the technology may be intrusive, it won't be long before this type of targeted messaging becomes the "new normal" for mobile users.

For auto dealers, there are three primary applications for beacon technology:

1) Improve Customer Service: Beacons can detect when a new customer arrives at the dealership, even if they don't come directly into the showroom. If a customer is walking around the lot, the beacon alerts the sales team inside the dealership and displays the customer's location. A salesperson can then be dispatched to that location to help the customer.

2) Track Customers: Beacons can aid in the gathering of big data that will help dealers better understand consumer behavior. When customers arrive on your lot, where do they go first? How do they move around the showroom or lot? Is there a difference between the movements of customers who purchase a car and those who leave without purchasing? In the latter case, if a customer's behavior pattern indicates they're getting ready to leave without purchasing, the dealership could send a sales manager or a push notification with an attractive incentive to stay.

3) Hyper-Targeted Messaging: Imagine a customer who is walking through the lot, then stops to look at a particular vehicle. Suddenly the pricing and monthly payment information for that exact vehicle pops up on their phone. Or, a special interest rate or cash-back offer that is available for that model and that customer based on their credit score and other factors is displayed. The ability to do this already exists. For auto dealers, it's just a matter of time before the mobile customer expects this type of personalized promotion, at which time adoption will become mainstream.

Beacon technology has the potential to completely transform the auto purchasing process. But before running out to implement it, consider where you are in your entire mobile marketing strategy. It's a good idea to master the basics before trying out the latest and greatest technology.

Mobile basics to be mastered first include: What is the user experience for your mobile website and mobile landing pages? Have you created successful mobile ad and texting campaigns? Do you have a good understanding of mobile metrics? Once you get the basics down, then it makes sense to start experimenting with beacons to see how they can improve your customers’ experience.