What happens when you combine mobile wallets with the emerging hype about beacons? You get a winning combination for retailers that boosts shopper loyalty and in-store spending.

Beacons are hockey-puck- to quarter-sized devices that can inexpensively be placed around a store and transmit a short-range Bluetooth signal to communicate with shoppers’ smartphones. Mobile wallets are digital payment systems in smartphones used to make in-store purchases without using a credit card.

When a shopper enters a store, a beacon near the entrance communicates with a mobile wallet on the shopper’s phone and helps the shopper remember there is a redeemable coupon in his mobile wallet. The shopper might be spurred to make a purchase, rather than just wander the store without buying anything.

Once near a cash register, another beacon makes contact with the shopper’s mobile wallet and alerts the shopper that he has loyalty points that can be used toward his purchase. The shopper might pile more products into his shopping cart, thinking he can afford more goods by using the points he otherwise would have forgotten he even had.

These examples are not some far-off futuristic science fiction.

Beauty giant Sephora, for instance, has been piloting beacons in combination with mobile wallets.

Leveraging their Beauty Insider program–which uses the cleverly edgy notion of urging women to become “addicted to beauty”–in-store beacons alert shoppers about basket products in their mobile wallets. Beacons also alert the shopper to get a mini-makeover near the store’s Beauty Studio and can remind the shopper to use her Beauty Insider card to get points which ultimately increases customer loyalty.

The beacons and mobile wallets combination is a powerful one, but there are some drawbacks and limitations that retailers need to know.

First, beacons normally require shoppers to have Bluetooth turned-on, enable location services on a relevant app, and explicitly opt-in to receiving beacon alerts. The gauntlet of getting shoppers to take all of those steps can be daunting. 

Furthermore, some shoppers are already getting deluged with beacon alerts and nearing a saturation rage of turning off their beacon access. Even Target announced it will limit its alerts to just two per shopper, per store visit.

Lastly, shoppers must have a mobile wallet on their smartphones, and enable them for access to beacons. Given that there are a variety of different beacons, even if the shopper has a mobile wallet, the byzantine industry norms and arrangements today can get in the way of the beacons and particular mobile wallets working well together.

In spite of these drawbacks, the potential pay-off of the beacon and mobile wallet wallop is great enough that retailers should look closely at adopting these technologies. Retailers that don’t prepare for such synergies will find themselves falling behind competitors, and savvy shoppers will go to stores that are the most tech-versed for a modern day shopping experience.

Lance B. Eliot is vice president of information technology for Interactions.