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How Malls Are Getting on Board with Beacon Technology

Malls may be in the early stages of implementing the Bluetooth devices, but they're dreaming big.

Ah, the mall: A center of American retail — and, let's face it — social life. It's a hangout when you're a teenager and a one-stop shop when you grow up and have responsibilities other than hanging out with your friends in the food court. It's also a fertile ground for implementing targeted marketing via beacon devices, the Bluetooth-enabled hardware that interacts with a person's smartphone based on his or her location. 

Beacon is all about bridging the gap between online shopping -- and all the information your favorite e-commerce sites have gathered about you over the years -- and the relatively anonymous world of in-store shopping. Devices like Apple's iBeacon and PayPal Beacon operate using Bluetooth Low Energy. Using BLE, they can communicate with phones and other devices using a low level of energy. If a store has iBeacon or PayPal Beacon hardware installed, the store can communicate with your phone, as long as you opt in. With the device integrated with the store's point-of-sale data, you can check into a store and pay from your phone. (You can already do this at an Apple store by checking out with the Apple Store app.)

Beacon is still fairly novel: Fabergé installed beacon devices in 275 designer eggs around New York City this March as part of a digital Easter egg hunt, a clever marketing play.

And now shopping malls want in on the action. Malls operate as larger and more complex beacon ecosystems than do boutiques and individual stores, and many of their technology teams are still working out how best to make use of the devices. For the retailers, marketing pushes can drive sales; customers can receive coupons on-the-go. And beacon provides a new revenue stream for malls in the form of sponsored content. Mall management group Rouse Properties, which is in the first stages of rolling out hardware from the beacon company Sonic Notify to the 34 of the locations it operates, says that the benefits of being beacon-enabled are manifold.

Brian Harper, Rouse's executive vice president of leasing, says the company is looking into selling that digital space to advertisers in different packages. For a few thousand dollars a year, a sponsor would get a certain number of pushes per week.

"I have someone solely dedicated to sponsorship income, and this is one of her huge initiatives in the company," Harper says.

And, of course, selling beacon as one of the shopping center's features might give malls an edge on signing leases with new tenants — at least for early adopters.

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As Chad Rodriguez, head of development and partnerships at Sonic Notify, points out, beacon isn't only about being able to send customers a coupon for Aveeno products when they're in the skincare aisle. There's something to be said for making the mall experience a little more delightful overall.

That might mean enabling shoppers to use their phones to up- and down-vote the songs playing in different areas of the mall, one application that Rouse will be test-driving in the coming months. And those fun use cases might help acclimate shoppers to interacting with the mall on a digital level.

Jill Renslow, vice president of business development and technology at Minnesota's Mall of America, says that her team is currently in the process of figuring out how best to use connectivity and aims to have its beacon system installed by the holidays. Beacon, she says, will be helpful in breaking down large common spaces into discrete areas that can float different messages to visitors depending on where they are. 

This isn't the first time that the Mall of America has looked into Bluetooth connectivity. Renslow says that her team ran tests on it three years ago, but found that the capability and reach of the devices wasn't good enough to justify installing it just yet. 

Surprisingly, the Mall of America doesn't have its own app yet. That's coming along with the roll-out of beacon later this year, and the two will be used in conjunction with one another. By that time the mall will also be fully Wi-Fi-enabled, too.

So next time you're in a mall, take a look to see if it's making use of beacon — and know that it's just in its early days. Harper says his team is looking two to three years out with its plans for beacon.

"This is stage 1," he says of the last few months of roll-out. "This is probably a 10-stage process."