Introduction to Proximity Marketing: What is Proximity Marketing? What is a Beacon?

In e-commerce, detailed information about the customers’ behavior is known. For example, in an e-commerce store, a lot of information, such as how many times a product is viewed, which product groups a person is most interested in, or which products she bought in the previous shopping can be accessed. With the development of technology, our need to learn more in physical fields, as online, begins to be met. For example, with proximity marketing, we can now know more about the behavior of customers who come to the physical store.

A cloth store picture form the entrance.

What is proximity marketing?

Proximity marketing is a marketing strategy that is also known as hyper-local marketing. When thinking of the targeting group in proximity marketing, the name of hyper-local marketing becomes logical, because you target people that are in the specific place in the time interval you want. With proximity marketing, the desire to collect data, examine and use this data in physical locations, as in digital, is met. In this way, companies have the opportunity to target the customer at the right time with the product or service they are interested in, in physical stores. They send highly relevant personalized notifications.Therefore, the company’s budget is used effectively without any waste, the communication is made to just the target groups, and the marketing message is not transmitted more than necessary. It can be used by retail stores, museums, and all other indoor venues where there is a desire to reach the right people at the right time.

A woman who looks at her phone to read PoiLabs' proximity marketing push notification for a retail store.

What are the most popular Proximity Marketing technologies?

Although Bluetooth is the most used technology in proximity marketing, other technologies such as Wifi, NFC (Near Field Communication) and GSM are also used. Every technology has its pros and cons. For example, in Wifi-based technologies, it is a negative aspect that customers have to connect to the local wifi network in order to benefit from proximity marketing, while the widespread availability of local Wifi networks is a plus. Even if not everyone has a smartphone, they have a SIM card, and in GSM-based technologies, proximity marketing is done through the tower where you have a cellular connection. While this is a plus for GSM-based technologies, targeting people in a large area is a minus.

Being able to transfer a small amount of data and requiring communication devices to be at a maximum distance of 10 cm from each other is a disadvantage in NFC-based technologies, which makes it a secure payment method to pay with NFC. While the need to install hardware in beacons can be considered a negative aspect, they are in a much superior position compared to other technologies in terms of distance in the range and terms of the presence of Bluetooth technology in almost every smartphone today.

What is beacon?

Beacons are Bluetooth Low Energy (BLE) based wireless equipment with small power consumption. They have high location accuracy, and no additional device is needed for proximity marketing as almost every smartphone has Bluetooth technology.

Beacons attracted the attention of many people and started to be used since Bluetooth beacons first launched in 2013. One of the biggest problems faced at the time was that Bluetooth was not battery-friendly. However, with Bluetooth 4.0, this problem has disappeared with Bluetooth Low Energy (BLE). Another problem was that the use of Bluetooth was not that common. Almost all smartphones in use today have Bluetooth. In addition, we use our phone’s Bluetooth a lot, together with wearable technology products and IoT devices that we use almost everywhere in our daily life.

A person who looks at her smart watch and smart phone via bluetooth.

How do beacons work?

Beacons are small devices placed at specific points in physical spaces. These devices transmit signals from where they are located. Bluetooth-enabled smart devices that enter the area where they transmit signals detect this signal. Then the device identifies the Beacon with its ID number. Then smart device sends this ID number to the server. After all these stages, it is now ready to communicate with customers.

How does proximity marketing help you, why do you really need it, and what are the use cases? If you wonder about all of these, the answers will be in the PoiLabs blog in the coming weeks. Before that, you can read the Hopi case.

Introduction to Proximity Marketing: What is Proximity Marketing? What is a Beacon?
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