SXSW highlights retail technology, and its limitations

          Laura Heller

SXSW Interactive wasn't the most glamorous part of Austin's annual two-week long event, but it did highlight some of the most exciting new digital initiatives—many of them being tested and implemented by retailers. SXSW Interactive was a smorgasbord of technology that will allow retailers and brands to better interact with consumers in the very near future.

I say near future because no matter how much attention these technologies get, it's becoming increasingly clear that beacons and other proximity-based technologies are still not quite ready for prime time.

Neiman Marcus has been conducting an oft-discussed test of beacons, but that test has not progressed past the initial three stores. There are similar stories from nearly every national chain. Most are testing, few are rolling out. Furthermore, few have been able to determine what to do with the technology beyond delivering a discount or coupon.

If a coupon is the best thing we can offer, then retailers are in trouble.

The more compelling scenarios created by proximity marketing are best exhibited in the hospitality and quick-serve restaurant industry. Hotel chains are using beacons and other mobile applications to expedite the check-in and payment processes and to even open doors. These companies are creating more value for their customers by solving problems.

Sure, a discount is a compelling incentive to choose one brand over another, but it can't be the only motivation. If the technology isn't solving a problem for the customer or the brand, it will fail.

There are several other promising technologies on the horizon, including digital watermarking and new geo-magnetic technology that has captured merchants' attention.    

There are quite a few things holding back location-based technology, not the least of which is the fact that only 30 percent of U.S. consumers actually keep bluetooth turned on. That's in spite of the fact that every iOS upgrade automatically turns on a user's bluetooth; it's almost immediately turned off again to alleviate users' fear of battery drain.

There is also the data reflecting low app usage to consider. While Walmart and Target have the size, capital and customer base to create and maintain a popular app, most retailers do not and are relying on third-party apps and programs to deliver their message. This is a great solution for most chains, but one that has its own unique set of barriers.

Proximity technology will mature and gain adoption, but in spite of the fervor of the converts, it still appears to be a solution without a compelling case for useage right now. -Laura