An introduction to Beacons
One of the most talked-about mobile trends for 2014 is beacons that can be used by retailers and brands to locate, track, communicate with and engage customers directly in store. Beacons have been used for years in mobile marketing but it wasn’t until Apple announced iBeacons that it became a hype for tech companies.
What are Beacons?
A beacon is a transmitter at a known location, which transmits a continuous or periodic radio signal with limited information content (for example its identification or location), on a specified radio frequency (source: Wikipedia). Any radio technology can be used to identify location but the most relevant technologies from a mobile beacon perspective are Wifi, Bluetooth and RFID.
Beacons are used for
- Indoor positioning
- Providing product information
- Identifying customers in a location to enable further engagement
What is iBeacon?
iBeacon is an indoor positioning system that Apple Inc. calls “a new class of low-powered, low-cost transmitters that can notify nearby devices of their presence.” The technology enables an iOS device or other hardware to send push notifications to iOS devices in close proximity.
Technically iBeacon is based on Bluetooth Low Energy (BLE), also known as Bluetooth 4.0 or Bluetooth Smart. The beacons come in different formats, including small coin cell powered devices, USB sticks and software versions. Many newer smartphones support iBeacons including iPhone 4S and later, iPad 3, mini and later (Apple products require iOS7) as well as Android devices with Bluetooth 4.0 and Android 4.3 and later (e.g. Samsung Galaxy S3/S4/S4 Mini, Samsung Galaxy Note II/III, HTC One, Nexus 7 2013 edition, Nexus 4+).
iBeacons can send you notifications of discounted items around you or alert you to items you may be looking for. It could also enable payments at the point of sale (POS) allowing you to make a payment without having to take out your wallet or card. At the end of 2013, Apple activated iBeacons across its 254 US retail stores as a demonstration.
So what do we think about iBeacons?
It’s still very early days with limited trials carried out by Apple, Safeway and a large number of other retailers. iBeacons require apps developed by the brand to be installed and running by the customer. Once the app is installed, it listens to messages from the Beacons. A message can be a welcome message, information about a product, a discount/offer or any other relevant communication. To increase effectiveness, the messages should be as personalised as possible. However, the risk is clear. Customers don’t want to be spammed by messages while walking around a store so the balance between useful information and spam will be delicate. Retailers are more excited about the technology than customers are.
How does iBeacon stack up versus other technologies?
We’ve been comparing technologies for some time now and although we believe iBeacons has the potential to be great, we don’t think there is a clear winner yet.
What do we recommend to clients?
All 3 technologies are cheap and easy to pilot so try them out in one location and see what you think, how customers respond, what the perceived value add is and how the business case stacks up. After Apple choose BLE as standard rather than NFC/RFID, we believe that the two winning technologies in North America will be Wifi and BLE whereas NFC still has a good chance in the rest of the world. Our preference for indoor positioning and customer engagement is still various solutions using Wifi.