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PayPal “Beacon” – a new way for merchants to engage customers

paypal-ble.jpgMobile Retail is a hot area now, with merchants and technology providers around the world looking for ways to improve the engagement of customers in retail stores.

PayPal, one of the world’s leading payments companies has recently announced Beacon, a new mobile retail product based on Bluetooth, which could lead to much smoother interaction in store.

PayPal has 132 million existing customers, most of whom have used the payment service primarily to make their purchases over the internet easier and more secure. However, PayPal sees that there could be a huge opportunity if they can find a way to improve the traditional, in-store shopping experience for their large user base.

paypal-beacon.gifBeacon is a small device based on “BLE” (Bluetooth low energy) technology. A merchant simply plugs it into a wall socket or a laptop, and PayPal Beacon sends out a Bluetooth low energy signal to anyone in the store with the PayPal app.

From the customer’s viewpoint, when they enter the shop and their phone has the PayPal app enabled, they will receive an alert – sound or vibration – that their phone is now connected to Beacon. This connection could then be used to enable some interesting scenarios.

The customer experience will of course depend on how the merchant has integrated Beacon into their customer systems, but here are some examples of advanced shopping to consider:

  • As you enter a clothing store, you are recognized by the Beacon system, your personal shopping preferences and history are electronically delivered to a sales staff, and you receive personalized shopping assistance.
  • A merchant is able to automatically send you customized marketing messages (e.g. coupons, product alerts, etc) based on how often you have come to the store, your purchase history, and even where you are in the shop.
  • As you enter a fast food restaurant, the serving staff knows you have arrived so they can give you your pre-ordered meal.
  • After making you selections in a shop, you simply walk to the cashier and tell them you want to pay with PayPal. They verify your identity by seeing your picture on the till, and the payment is made without you doing anything further.

Of course all of these scenarios would require quite a bit of integration into existing retail systems, and probably also custom development. And there will be quite a few questions around customer privacy that will have to be addressed. So it won’t be immediate or easy.

However, looking beyond these issues, it is clear that eventually this sort of new technology really has the potential to revolutionize the shopping experience.
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