Facebook's Free Beacons for Retailers: An Approach to Land-Grab

Seven months ago, Facebook introduced Place Tips by which businesses can send contextual marketing messages to people in proximity to the store. The social media giant had been testing the Place Tip feature which uses Facebook beacons. These beacons use Bluetooth technology to send a signal to the Facebook app on a shopper's phone which helps businesses run proximity marketing campaign.

Facebook’s Place Tip feature was initially tested with a small group of businesses in New York City including the Metropolitan Museum of Art, Dominique Ansel Bakery and the Strand Book Store. Last month the company has decided to roll out the Place Tips feature beyond the testing phase. The feature is now available to all businesses in the United States. Interested business owners who want to leverage Facebook’s Bluetooth beacon technology can request for free beacons. Facebook is aiming to make beacons available to thousands of small and medium-sized businesses across the US.

Proximity marketing is gaining steam, but at this point, there is no major leader in the market. There is still a lack of awareness about proximity marketing. Facebook has long been trying to convince advertisers that it can target better than anyone else on the Internet. Adding location-specific ads and push notifications would only reinforce that position.

Beacons which will be given to businesses have been produced by an external manufacturer. Usually, beacons are not expensive, but it’s still noteworthy that Facebook is willing to distribute these beacons for free. But how will Facebook benefit from this? Facebook will be able to access more customer profiles and will also be able to keep a track of what kind of products a user mostly buys. Facebook will be able to share such information with marketers and businesses, which will result in more sales conversion. Studies have shown that contextual proximity marketing campaigns are immensely successful.

The strategy of giving out free beacons to small and mid-size businesses clearly indicates that Facebook is trying to do a land-grab. We have previously discussed that putting few beacons in few stores would lead to nowhere. Land-grab is the best way to succeed in proximity marketing space. In April, Blue Bite, which provides mobile technology for the retail industry, and Freckle IoT have planned to deploy 60,000 beacons across the US. Similarly, Twitter has also shown interest in this space.

In the last few years, beacons have gained attention from marketers and businesses for location-based marketing efforts, but one of the biggest pain points is that shoppers are required to be actively using a business mobile app for successful communication. That is what discriminates Facebook from others. It is more likely that shoppers will have Facebook app installed in their smartphone, rather than having an app for small retailers. Small and mid-size retailers working with Facebook can leverage the advantages of Facebook's ubiquity.